OUTER HOUSE, COURT OF SESSION [2008] CSOH |
|
|
OPINION OF MORAG WISE, Q.C. (Sitting as a Temporary Judge) in the cause (FIRST) HUGH CAMERON AND (SECOND) ALICE MARY STEUART CAMERON Pursuers; against HUGHES DOWDALL Defenders: ________________ |
Pursuers: Ellis, Q.C.;
Simpson &
Marwick
Defenders: Motion, Solicitor Advocate; bto
[2] The
contract giving rise to the claim was concluded on
[3] The
case called before me on
Submissions for Defenders
[4] Mr Motion, solicitor
advocate for the defenders, based his argument largely on a detailed chronology
that had been prepared by the pursuers' advisors for the purpose of the hearing
(No. 35/1-4). A claim had been
intimated on behalf of the pursuers on
[5] By
August 1997, the pursuers' current solicitor, Mr Kemp, formerly of
Burnside Kemp Fraser and now of Messrs Simpson & Marwick, was acting for
them. In August 1997, that
solicitor intimated to the defenders' agents that they were waiting for an
expert opinion in relation to the merits of the action. The last correspondence received by the
defenders from the pursuers' agents was on
[6] Mr Hughes,
the solicitor who had acted in the transaction giving rise to the claim, died
on
[7] Mr Motion
conceded, quite properly in my view, that despite the terms of paragraph 17 of
his minute, he could not suggest that the court should take into consideration
the pursuers' prospects of success in deciding whether to dismiss the action
for want of prosecution. He argued,
however, that I should take into account the fact that the case will not, if
allowed to proceed, go straight to proof, as the pursuers will require to amend
their pleadings and there is likely to be a Procedure Roll discussion. Hence on any view, there will be further
delay if the case is allowed to proceed.
[8] Under
reference to the decision in Tonner v
Reiach and Hall 2008 S.C. 1, Mr Motion
accepted that in order to succeed in his minute, he required to show (i) that
there had been both inordinate and inexcusable delay and (ii) that there was an
"added element of unfairness ... specific to the particular factual context"[Tonner,
at paras133 - 137]
[9] The
submission in support of dismissal was developed by highlighting various
passages in the detailed chronology. In
essence, Mr Motion was critical of Mr Cameron's responses to advice
that expert opinion would be required.
Further, while on
[10] On
[11] It was not until September 2004 that a note from senior
counsel was obtained in relation to sanction for the instruction of KPMG
accountants, who were ultimately identified as suitable experts on
quantum. The accountants were instructed
in January 2005 but it is clear from the chronology that there were a
number of difficulties and delays involved in the execution of that
instruction. Ultimately, the report from
KPMG was received by the pursuers' agents in February 2007. A consultation with senior counsel was
arranged and that took place in May 2007.
Senior counsel advised the pursuers that there would be a requirement to
amend the pleadings following the views now obtained on the merits and on
quantum. There is mention in the
chronology in relation to
[12] Mr Motion referred to affidavits that had been lodged on behalf
of the pursuers. I was urged not to give
much weight to Mr Cameron's affidavit.
It was argued that a gloss had been put on the history of the case by
Mr Cameron as there was a tension between his affidavit and some of the
chronology produced on behalf of the pursuers.
In any event, it was argued that Mr Cameron's position from
[13] In summary, on the argument that there had been inordinate and
inexcusable delay, Mr Motion concluded by indicating that the factors on which
I should place the most reliance were the pursuers having had four sets of
solicitors, the first pursuer's refusal to accept that the case was not "open
and shut", and the instruction of experts on a piecemeal basis. He argued that the activity that must take
place to excuse any delay has to be meaningful activity. In this case he stressed that, albeit the
chronology indicated that there had been activity, it was not meaningful
activity because the issues in the case had not been properly focused by any of
the agents representing the pursuers. He
suggested that there was no real explanation for the various legal aid
applications and that even if the delay was excusable until May 2007, it
was inexcusable thereafter and in the context of the whole period, I should
conclude that there had been inordinate and inexcusable delay.
[14] If I was satisfied in relation to inordinate and inexcusable
delay, Mr Motion argued, there was in this case an added element of unfairness
particular to the factual context because of the death of Mr Hughes
in 2002. The loss of
Mr Hughes' evidence was highly prejudicial to the defenders. As the pursuers will require to amend their
pleadings, the defenders will be unable to ask Mr Hughes about that anticipated
amendment. There was also reference to
Mr Smith to whom the pursuers had given the power of attorney in relation
to the negotiation of the contract. Mr Smith
cannot be located, although it was accepted that attempts to precognose him as
far back as 1997 had been unsuccessful.
Mr Motion also made the general point that memories of witnesses
diminish over time and that there must be difficulties of leading evidence in
this case so long after the event. He
concluded by making a motion to grant the first crave of the minute and dismiss
the action.
Submissions for the pursuers
[15] Senior counsel for the
pursuers' motion was to sustain
pleas 1, 3, 4 and 5 of the pursuers' answers to the defenders'
minute. He dealt briefly with his plea
to the relevancy. In short, the
defenders' first plea was one of mora
which would normally and more properly be pled as mora taciturnity and acquiescence, which is of course a plea that,
if sustained, leads to absolvitor. In
short, Mr Ellis argued that there were no averments in the minute that
addressed the issue of acquiescence, which is necessary for such a plea. See Assets
Co Ltd v Bains Trustees (1904)
6 F. 692 and
[16] In relation to the substantive argument, referred to as "the Tonner argument", senior counsel agreed
that for an action to be dismissed, the delay had to be both inordinate and
inexcusable. Further, he agreed that even
if inordinate and unreasonable delay was established, the defender must show an
added element of unfairness particular to the factual context. He drew attention also to paragraph 130
of Tonner where the court's
jurisdiction to dismiss an action for want of prosecution is described as a
"draconian power of last resort". He
submitted that if I reached the stage of balancing the interests of the
parties, it would have to be that the interests of the defenders in bringing
the action to an end outweighed those of the pursuers to have their claim
determined by the court before the action could be dismissed.
[17] In support of an argument that there had not been inexcusable
delay in this case, senior counsel argued that the period of delay must be
looked at as a whole as to do otherwise would suggest that a short period of
inexcusable delay taints the whole period.
That was consistent with paragraph 133 of Tonner.
[18] Much of Mr Ellis' argument focused on the fact that most
of the delays in the case had been caused by the way in which the legal aid
system had operated in this litigation.
If that was accepted, then a dismissal of the action would deny the
pursuers a right to a fair trial in terms of Article 6 of the European
Convention on Human Rights. By
sustaining a Tonner type plea he
argued, the court is denying a party of a decision on their civil rights
through procedural bar rather than a decision on the merits. Under reference to Airey v
[19] Turning to the chronology, Mr Ellis argued that little, if any,
of the delay in the case has been due to the actions or inactions of Mr and
Mrs Cameron. Mr Ellis did not
seek to persuade me that there had been no inordinate delay, but rather that
the delay was excusable. He submitted
that the most difficult aspect of the case related to quantum. The damages aspect of the case that related
to both pursuers - the "earn out consideration", was the part of the
consideration that depended upon the profitability of the business after the
takeover. In order to calculate damages
in this case, one would first have to calculate what an appropriate "earn out
clause" should have contained. Only when
that was done, could a further calculation be made as to the difference that
would have made to the profit earned.
The expert opinions with which there had been so many difficulties were
related to this aspect of the case.
[20] It was said that this was not a case in which the action had
been raised and sisted with no further procedure. It was accepted that the pursuers would be
proposing a minute of amendment and then perhaps a Procedure Roll discussion
and ultimately a proof. It was said that
the basic averments for the pursuers in relation to the "earn out clause" would
not change but would be elaborated by that amendment. It was accepted, however, that other
averments required to be removed and that the averments relating to damages
were so briefly stated that as the pleadings stood there was inadequate
specification of those.
[21] In relation to the chronology and affidavits, Mr Ellis
argued that during the periods of the first two sets of solicitors' involvement
which covered July 1989 through to May 1996, those periods could not
be part of any argument for inexcusable delay because the Law Society had
ultimately upheld complaints against both those sets of solicitors. One of the complaints upheld was in respect
of delay and failure to progress the action.
The pursuers could hardly be held responsible for that. The third set of solicitors, Blackadder Reid
Johnston, had acted between May 1996 and July 1997. It was during that period that an
unfavourable opinion had been received from Mr Bennett, but there were
also difficulties with Mrs Cameron's legal aid certificate. By May 1997, the pursuers had received
one favourable opinion (from Mr Lumsden) and one unfavourable opinion (from
Mr Bennett) on the merits. I should
conclude that it was not unreasonable for the pursuers to seek a further
opinion at that stage.
[22] The period that came under the closest scrutiny was that from
July 1997 until intimation of the motion to recall the sist in
February 2008. It was argued that
nearly all of the delays during that period were caused by difficulties of
conducting this difficult professional negligence case within the constraints
imposed by the Scottish Legal Aid Board.
Fresh legal aid applications had been submitted in 1997. While at one stage the Scottish Legal Aid
Board indicated that those applications were to be treated as abandoned, they
indicated to the pursuers' agents that they would resuscitate the applications
if a suitable expert opinion was provided.
At that stage a Mr Christie, solicitor, was instructed for an
opinion. While that took up some time,
the reason was partly the recovery of papers from previous agents and the Law
Society. In September 1999, Mr Christie
and his colleague, a Mr Napier, provided a joint opinion supportive of the
pursuer's case. It was on the strength
of the joint opinion that legal aid was eventually granted on
[23] It was accepted that there was something of a delay after the
consultation on 22 May 2007, but it was explained that senior counsel was
aware that the decision in Tonner v Reiach & Hall was awaited and he
argued that it would have been unreasonable to progress matters until the
question of the court's power in such cases was clarified. While the decision in Tonner was issued on
[24] I asked senior counsel for the pursuers why no minute of
amendment had been prepared after the consultation in May 2007. It was said that there was no point in
amending until the decision in Tonner was
known. Thereafter, it was clear that the
issue of the recall of the sist would be contentious. While it was difficult to explain the period
between the decision in Tonner being
known and the decision to recall the sist (which was not in the event
necessary), that delay was for a relatively short period in the context of the
history of the action. Any final delay
caused by the need to fix an important hearing around counsel's diary should be
ignored. I asked about the lack of
communication between the pursuers' agents and the defenders' agents for over
seven years. Senior counsel indicated
that in the context of whether delays were excusable, this was not a case where
the excuse involves the defenders at all.
While as a matter of professional courtesy, it would have been helpful
had the pursuers' agents thought fit to keep the defenders' agents advised of
the various difficulties involved with obtaining expert reports, it did not go
to the substance of the argument for excusable delay. In all the circumstances, it was submitted
that the periods of delay in relation to the important period 1997 to date
are excusable because of the way the legal aid system has operated in this
particular case. Looking at the whole
period, the one or two short periods where the delay might be inexcusable was
not sufficient to reach a conclusion that there had been inordinate and
inexcusable delay as set down in Tonner.
Reference was made to the decisions of
Lady Paton in Smith v Golar-Nor Offshore A/S [2007] CSOH 161
and of Lord Matthews in Mackay v
[26] It was reiterated that to dismiss the action on the basis of
delay would deprive the pursuers of their right to a fair trial. If consideration was being given to
Article 6, it was accepted that the defenders also had a right to a fair
trial within a reasonable time, but the consequences of delay for them were far
less than the harsh consequences that would befall the pursuers if the action
was dismissed.
Defenders' reply
[27] In a brief reply, Mr Motion
indicated that the legal aid system had operated in this case in the same way that
it would in any other legal aid litigation.
He emphasised again the changes of agency on the part of the pursuers,
the delays in seeking a second opinion on the merits and on quantum. Further, he argued that a legally aided party
is under a general obligation to pursue an action within a reasonable time.
Discussion
[28] It seems to be settled that
the court has power to dismiss an action where there has been inordinate and
inexcusable delay, resulting in added element of unfairness to the defenders
specific to the factual context of the case - Tonner v Reiach & Hall 2008
S.C. 1.
[29] While matters have to be viewed as whole in reaching a final
decision, it seems to me that there are a number of distinct periods in this
case which first merit separate scrutiny.
[30] The first period is from the alleged negligent actings, which
concluded in July 1989 to the raising of the action in
July 1994. While this is a case
which was raised very close to the expiry of the quinquennium, there was
considerable activity extra judicially between the intimation of the claim in
September 1990 and the raising of the action in 1994. By the time the action was raised, the
pursuers had already parted company with their first set of solicitors. However, in light of the subsequent upholding
of a complaint by the Law Society against those solicitors, I do not consider
it appropriate in this particular case to place too much emphasis on that
period in considering subsequent delays.
[31] The second distinct period is from the raising of the action
in 1994 to the last meaningful interlocutor in the case in
May 1997. It could not be said that
this was a case without court activity.
The point was made that the pursuers had not availed themselves of the
opportunity to adjust despite seeking continuations to do so. The defenders, however, had adjusted their
pleadings and sought a procedure roll discussion. The Record had closed and while the case
could not proceed to proof, there were pleadings upon which the court was in a
position to make a determination. The
solicitors acting during some of this period were those against whom a
complaint of delay in failing to progress the action was upheld. Further, as noted earlier, it was during this
period that the defenders took at least nine months to supply their file in
response to a request from the pursuers' agents.
[32] The third and most significant period, from May 1997 to
May 2007 is one in which the pursuers' current agents were primarily
acting, at least from July 1997. It
seems to me to be clear that a delay of more than 10 years during which no
steps have been taken in the court process at all is excessive. In normal circumstances, one would expect even
an action of this sort to be concluded well within that period. The real question, however, is whether or not
that inordinate delay is excusable on the particular facts of this case. It should be noted that this period is
largely unaffected by the changes of solicitors. The final change of solicitors in
July 1997 does not appear to have been responsible for any significant
delay. Within 3 months of the
transfer of agency, correspondence was received confirming termination of the
pursuers' legal aid certificates. The
withdrawal of legal aid at that time was due to the lack of a supporting expert
opinion, a matter that was unrelated to the transfer of agency.
[33] The other main plank of criticism on behalf of the defenders
was the piecemeal way in which expert opinions were obtained. However, it is during this period that the
joint opinion supportive of the pursuers' case was obtained on the basis of
which the legal aid certificates now in force were granted. As I understand the position, it was not
until after that supportive joint opinion was available that the terms of a
remit to an independent chartered accountant could be ascertained and
framed. The entries in the chronology for
2003 ( No 35/4, pages 9-10) illustrate very clearly the significant
difficulties facing the pursuers' agents in attempting to obtain sanction for
the relatively expensive exercise of independent quantification of the
pursuers' claim. Sanction was not
received from the Scottish Legal Aid Board to instruct KPMG until
[34] Between January 2005 and February 2007 the KPMG
report was in preparation. What seems on
the face of it to be an extraordinary length of time to produce a report is
adequately explained in the chronology (No 35/4, pages 12-15). What is clear is that the pursuers' solicitors
were in regular contact with the expert Mr Crawford of KPMG and that
delays during this period related primarily to the difficulties of
quantification. Meetings with the first pursuer
were involved, a draft report was available by
[35] Finally, there is the period from May 2007 to February 2008. On
receipt of the report the May 2007 consultation was fixed. I do find it surprising that steps were not
taken to draft a Minute of Amendment immediately given the previous delays that
had taken place. However, I accept Mr
Ellis position that in his judgement there was little point in seeking to
progress matters until the outcome of the Tonner
case was known. The delay on the
part of agents thereafter related primarily to the preparation of the detailed
chronology in anticipation of the defenders' argument. That exercise seems to
have proceeded in an unnecessarily leisurely fashion given the previous
history. Although short, it is a period of delay for which no adequate
explanation was given. By February 2008
parties were in a position to address and contest the issue of delay.
[36] There can be little doubt that the complicated and somewhat vexed
history of the pursuers' attempts to litigate this matter raises a serious
question about whether the court should now allow the case to proceed. During one or two of the periods referred to
above, there have been isolated delays without good reason. However, those delays have been very short
when compared with the lengthier delays caused by the need to work within the
constraints necessarily imposed on legally aided litigants in a professional
negligence case. I am not persuaded that
the changes of representation have contributed materially to the delay. So far as the suggestion that Mr Cameron
refused to take advice is concerned, it seems to be accepted that this is a
difficult case with a client who challenged the initial expert opinion on the
merits. As a favourable opinion was
ultimately obtained, that challenge would appear to have been well founded to
the extent that the pursuers' representatives and the Scottish Legal Aid Board
are now satisfied that the case has a reasonable prospect of success. The final criticism related to the period from
May 2007 which, while unsatisfactory, could not in the circumstances of the
case amount to inordinate delay that would, as Mr Ellis put it "taint the whole
period." Taking the whole period of the
delay as I must, I have reached the conclusion that, on balance, the delay has
been adequately explained and is excusable.
[37] In the absence of inexcusable delay, it follows that the
additional element of unfairness need not be considered. It may be useful however, if I express a view
on how I would have approached this matter had my decision on delay been
different. The defenders highlight the
death of Mr Hughes as the particular fact that would cause unfairness if the
action was allowed to proceed. The pursuers
accept that some prejudice or unfairness necessarily ensues from the death of a
witness, but argue that a balancing exercise nonetheless would require to be
carried out, to see if that would justify dismissing the whole action.
[38] In considering this aspect, I require to take into account the
procedural consequences of allowing the action to proceed. (Tonner,
para 138). I was advised by senior counsel
for the pursuers that the proposed amendment would not relate to matters upon
which Mr Hughes could have commented beyond the responses he had already given.
It was said that the main body of
evidence in the case would be built around the files and the merits, though
specialised, are relatively focused. The
defenders' position has been consistent and Mr Hughes' stance on the principal
defence would be made known to the court. The question of whether Pillar Electrical Plc would
have entered into the contract at all if an appropriate "earn out clause" had
been drafted and inserted was not one that would have been answered by the now unavailable
witnesses. The absence of Mr Smith, who
had operated under the power of attorney had been a difficulty from close to
the outset of proceedings.
[39] In my opinion, while the death of Mr Hughes undoubtedly hampers
the defenders to some extent, it would not, in the particular circumstances
explained to me, be sufficient in itself to dismiss the action on the basis of
unfairness had the delay been inexcusable.
It was not suggested that his position on the merits could not be before
the court in some form. The particularly
contentious issue on quantum is not one upon which he would have been asked to
comment. There is no suggestion that the
amendment will attempt to present a different case of fault against him. On the question of procedure, this is not a
case where an action was raised and no further procedure took place. While amendment is anticipated, it is to be
expected that that will now take place as expeditiously as possible. The material upon which the pursuers intend to
rely is now all available to them. In
all the circumstances, I would not have regarded this case as one requiring the
unusual and severe sanction of dismissal.
The post of last resort has not yet been reached.
[40] In the event I have not required to express any firm view on the Article 6
ECHR point presented by Mr Ellis. I have
taken into account the difficulties that arose in this difficult case in
obtaining legal aid sanction for expert opinions and the inability to progress
the action without those in reaching the conclusion that I have on excusable
delay. As part of balancing the parties'
respective positions in relation to the unfairness argument, I would have taken
into account that the pursuers would be deprived of their right to pursue the
action with the benefit of legal aid, but I would not have regarded it as a
determinative consideration.
Decision
[41] For
the reasons elaborated above, I sustain the pursuers' first, third, fourth and
fifth pleas in their Answers and repel the first, second, third, fourth and
fifth pleas of the defenders' Minute and refuseserve the first
crave there of. I reserve the question
of expenses raised in the remaining pleas to enable parties to address me on
that matter.