Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2010] CSOH 27
A684/08	OPINION OF LADY CLARK OF CALTON in the cause JOHN HARDEY Pursuer; against ASSOCIATED RENTALS LIMITED Defender: ­­­­­­­­­­­­­­­­­________________

Pursuer: Party

Defender: McConnell, Russel + Aitken WS

10 March 2010

Procedural history

[1] The summons in this case was signetted on 16 April 2008. On 14 August 2008, the action was withdrawn from the procedure under Chapter 43 of the Rules of Court and proceeded thereafter as an ordinary action. To avoid confusion, I refer to the parties by their names in this Opinion. The case was appointed to the Procedure Roll on the pleas-in-law of Associated Rentals Limited by interlocutor dated 9 January 2009. Thereafter the Closed Record was amended in terms of the Minute of Amendment (13 of process) by interlocutor dated 1 May 2009.

[2] On 13 May 2009, the case called on Procedure Roll for a one day hearing. The pleadings were contained in the Closed Record as amended (14 of process). At that hearing, counsel for Associated Rentals Limited made detailed submissions in support of the pleas-in-law related to time bar and relevancy et separatim lack of specification. Thereafter John Hardey addressed me in response. I allowed him to tender at the bar a Note of Arguments (15 of process) and allowed his second Inventory of Productions for the pursuer to be received (6/7 to 6/14 of process). His oral submissions were based mainly on his written Note of Arguments. The submissions were not completed. Thereafter there was a substantial delay in obtaining a date to complete the Procedure Roll hearing.

[3] At a hearing on 30 October 2009 a Minute of Amendment for John Hardey was received (16 of process). Thereafter Associated Rentals Limited lodged answers (18 of process) and the Minute of Amendment and Answers were adjusted.

[4] On the second day of the Procedure Roll which took place on 16 December 2009, John Hardey made a motion to amend the Closed Record (14 of process) in terms of the adjusted Minute of Amendment and Answers. In the hope of a successful outcome, he made available a new Closed Record reflecting the pleadings in the form which included the amendments. This document which has no formal status may be of assistance in helping to understand the effect of the proposed changes in the pleadings. For that purpose only the document was received as 21 of process.

[5] There was some discussion with parties about how to proceed. John Hardey wished the Court to make a decision about the amendment in his favour and complete the Procedure Roll debate on the basis of the pleadings as set out in 21 of process. Counsel for Associated Rentals Limited opposed this and invited the Court to conclude the hearing of the Procedure Roll on the basis of the existing pleadings in 14 of process.

[6] I decided that I required to make a decision about the motion to amend. It is on that basis therefore that the hearing on the second day of the Procedure Roll debate proceeded. The hearing was taken up with disputed issues about the Minute of Amendment.

Submissions by John Hardey about the motion to amend

[7] At the continued hearing, John Hardey explained that he had considered the submissions made by counsel on behalf of Associated Rentals Limited on the first day of the Procedure Roll hearing and that had influenced him to bring forward the Minute of Amendment. He prayed-in-aid his further Note of Submission, number 20 of process. He explained that the amendment gave more detail regarding the specification of the precise basis of the fraud and introduced further averments to justify the exercise of discretion in relation to the time bar plea pled against him.

[8] I do not summarise the submissions as these are set out in detail in 20 of process. It should be noted that John Hardey did not wish to insist on the submissions in paragraphs 3 and 4 of page 4, or page 5 apart from the last paragraph. He accepted that the last paragraph at page 11 and the first three paragraphs of page 17 were not directly related to the motion for amendment and should be passed over for future consideration in relation to the Procedure Roll.

[9] John Hardey stated that he made a concession in law which was relevant to the motion for amendment. That is set out at page 17 of 20 of process. He explained that the concession was in response to the submissions made by counsel for Associated Rentals Limited on the basis of Darker and others v Chief Constable of West Midlands Police [2001] 1 AC 435.

[10] At this point it may be helpful if I explain that counsel for Associated Rentals Limited had submitted on the basis of Darker referring to passages at pages 445, 450D-E, 453H, 456 and 463 that there was an absolute immunity from action, given in the interests of the administration of justice, to a party or witness in respect of what he said or did in Court. That immunity extended to statements made for the purpose of Court proceedings and prevented such a person being sued for conspiracy to give false evidence. The immunity was directed to things which could fairly be said to form part of their participation in the judicial process as witnesses. Counsel also prayed-in-aid Karling v Purdue 2004 S.L.T. 1067.

[11] John Hardey conceded as a matter of law that counsel for Associated Rentals Limited was correct in his analysis of the legal position based on Darker to the extent that there was immunity in relation to the evidence of Armando Russo. Although John Hardey was critical of the public policy grounds which underlay this immunity, he did not attempt to argue that this line of authority did not represent the existing law. He submitted, however, referring to Lord Hope at page 445-450 that: "Immunity cannot be used as a general blanket to cover premeditated fabrication of evidence....." John Hardey submitted that this is exactly what he complains of in the present proceedings. He submitted that in such circumstances any immunity only extends to the actual evidence of Armando Russo. The whole nature of the fraud which he complained of, "pertains to a premeditated act of manufacturing tangible evidence to attain a false pretence". As such, the immunity does not cover this. John Hardey said the present action was based on averments which encompassed much more than perjured evidence. He submitted that Mrs Palma Russo the company owner, did not give evidence and was never on the witness list. As such, anything she said or did as regards the false photograph was not in the furtherance of evidence. As such, no immunity exists for her at all. Any immunity of Armando Russo can only pertain to things said or done regarding the content of his evidence. The averments against him on record in the present action go further than simply founding upon his evidence. In particular it is averred that there was a premeditated act of fraud "on the solicitors" to lodge and have the photograph used in the way complained of and founded upon. It was submitted that as Armando Russo is not fully protected by any immunity, his actions can be examined, at least in part. John Hardey also prayed-in-aid the case of Breadalbane v Breadalbane's Trustees (1868) 6 M.807. He submitted that the fraud on the Court was illustrated by the use of manufactured documents in order to prove a case. That he submitted was the crux of the present action.

[12] John Hardey did not accept that the case was time barred and prayed-in-aid his submissions made on the first day of the hearing which are summarised in 15 of process. On his analysis, the start of the triennium period was not until a date in 2005 when the action of reduction was granted.

Submissions by counsel for Associated Rentals Limited

[13] The motion to amend was opposed. I understand that the opposition was directed only to paragraph 1 of the Minute of Amendment. In line with his submissions at the Procedure Roll Debate, counsel submitted that the expiry of the triennium had occurred in 1997 or 1998 at the latest. Under reference to Pompa's Trustees v Edinburgh Magistrates 1942 SC 119 and Evans v Northern Coasters Limited 20 January 1995, counsel submitted that the amendment was an attempt to change the factual foundation of the action. The existing pleadings in the present action were based upon what Armando Russo said as a witness in evidence. The amendment was attempting to introduce a case about instructions given to solicitors by Armando Russo and by Palma Russo. In addition, counsel submitted that John Hardey could have no factual basis about instructions being given by Armando Russo and/or Palma Russo to solicitors. In these circumstances he was not entitled to aver as fact a case based on mere speculation. John Hardey was attempting to change a case based upon false evidence into some sort of conspiracy case involving a solicitor as the innocent dupe of others. The Minute of Amendment introduces for the first time averments about Palma Russo and also changes the basis of the case from a case based on knowledge of perjury to a variety of alternative cases. In criticising the relevancy of the Minute of Amendment, counsel also referred specifically to page 2 where there was an attempt to incorporate brevitatis causa evidence from the action in 1994. In concluding his submission, counsel stated that the amendment came far too late. Associated Rentals Limited would be prejudiced by being required to attempt to investigate events dating back to 1994, the date of the proof in the first action. He submitted also that Palma Russo is a very elderly person now lacking in legal capacity. Counsel did not have available medical reports to lodge in support of this. He stated that he had seen such reports about Palma Russo in relation to other litigations.

Submissions in response by John Hardey

[14] In response to submissions by counsel for Associated Rentals Limited, John Hardey submitted that the pleadings in the present action always had averments that "went beyond perjury". He referred to various averments about the lodging of the false document and the fraud on the Court. He conceded that he had no direct information about what had happened in relation to any instructions or interaction between the solicitor for Associated Rentals Limited, Armando Russo and Palma Russo in relation to the action in 1994. He stated that it was difficult for a party litigant to follow the strict rules of pleading. He considered that it was implicit from what had happened that one or other or both must have been involved in the fraud and that was what the pleadings were intended to give notice about. He did not accept that there was any prejudice to Associated Rentals Limited by the lateness of the amendment. He submitted that there was prejudice to him as his father who had been a witness in the first action had died. He submitted that the transcript provided the best evidence about what was said. He did not accept the lack of capacity of Palma Russo and criticised the absence of any medical reports.

Discussion

The pleadings of John Hardey in the closed record 14 of process

[15] The history of this case and the facts and circumstances averred to underpin the pleadings are unusual. It is impossible to consider the Minute of Amendment and submissions without some reference to the history and to the existing pleadings.

[16] There were three brothers called Amerigo Russo, Armando Russo and Arturo Russo. Amerigo Russo had a son called Adrian Russo who is known as John Hardey. He is the pursuer in the present action. Armando Russo has acted as agent for Associated Rentals Limited, a company in which his wife Palma Russo is the principal shareholder. The history of events underpinning the present action relate to an earlier action (hereinafter referred to as the "first action"). In the first action Armando Russo and Arturo Russo were called as witnesses for the pursuer and gave evidence at proof in the action Associated Rentals Limited v Adrian Russo, otherwise known as John Hardey. Counsel conducted the proof on behalf of Associated Rentals Limited. The solicitor of John Hardey called as witnesses John Hardey and his father, Amerigo Russo. The proof in the first action related to events which occurred in late 1991. The notes of evidence are 6/7 of process. The decision of the Sheriff dated 23 May 1994 is 6/1 of process. I refer to this in some detail in order to give the background to the present action. The Sheriff found in fact:

"(1) The Pursuers are a limited company with their registered office at 30 Main Street, Uddingston. One of the directors of the company is Palma Russo, wife of Armando Russo. The Defender is the son of Amerigo Russo, a brother of Armando Russo and another brother, Arturo Russo. Amerigo Russo ran a chip shop business at number 32 Main Street, Uddingston until on or about February 1992. He was assisted in that business by the Defender. The business was named Adriano's Fry Fayre. The Defender changed his name from Adriano Russo to John Hardey by statutory declaration.

(2) The Pursuers are heritable proprietors of the shop premises at 24 Main Street, Uddingston under a Disposition by Mrs Palma Russo in favour of the Pursuers dated 23 and recorded in the General Register of Sasines for the County of Lanark on 27, both January 1975. Number 24 Main Street, Uddingston forms part of a tenement building comprising numbers 22 to 36 Main Street, Uddingston and made up of seven shops and six dwellinghouses. The solum and inter alia, the common entrance from Main Street, Uddingston and the close leading therefrom are held in common by the proprietors and their successors of these shops and dwellinghouses for the common use and benefit of these proprietors and their successors in terms Clause (FIRST) of a Deed of Conditions by Mrs Rosina Valetto or Russo dated sixth and recorded said G.R.S 14, both June 1952.

(3) The close entrance until November 1991 had erected in it a lockable metal gate at the street entrance to the close.

(4) In or about 3 November 1991 the common entrance to the close was bricked up by a tradesman acting on the instructions of the Defender. On 4 November the Defender took the gate from the front of the close and re-erected that gate at the rear of the close. On 4 November Arturo Russo demolished the brickwork erected in the close entrance. On 5 November the Defender used a mechanical percussion hammer to dislodge bricks in the entrance to the close. On or about 8 November a tradesman rebuilt the wall in the entrance to the common close on the instructions of the Defender. The entire frontage of Adriano's Fry Fayre was tiled over about one week thereafter including the bricked-up entrance to the common close. The Defender assisted and issued instructions to the bricklayer. The Defender carried bricks for the bricklayer. The Defender arranged for a security guard to oversee the work of bricking in the close entrance.

(5) No access is now possible through the common entrance and close from Main Street, Uddingston.

(6) The Defender in his own name and giving his address as 32 Main Street, Uddingston raised a Small Claims Summons against Arturo Russo in or about March 1992. The Defender sought recovery from Arturo Russo of the sum of £300. The Defender averred that £300 had been the cost of the bricking up of the common entrance. The Defender raised the action against Arturo Russo on the basis that Arturo Russo had demolished the wall so constructed by the Defender. That claim was dismissed by the Court.

(7) The Defender does not have any proprietorial interest in any of the properties 22 to 36 Main Street, Uddingston."

Following his findings in fact and law, the Sheriff ordained John Hardey to carry out certain remedial work and interdicted him

"from building walls or erecting gates or blocking off in any way the common close of the subjects known as and forming 22 to 36 Main Street, Uddingston and in particular the entrance to the common close at 30 Main Street, Uddingston"

[17] The pleadings in the present action narrate in Article 5 and 6 of Condescendence that there were attempts by Associated Rentals Limited in 1994 to implement the order of the Sheriff. This involved further proceedings in the Sheriff Court.

[18] In about 1994, John Hardey initiated proceedings of reduction in the Court of Session in relation to the decree of the Sheriff dated 23 May 1994. I refer to the reduction action as "the second action". The Closed Record in the second action raised by John Hardey against Associated Rentals Limited and Armando Russo is 6/4 of process. It is necessary to have regard to the said Closed Record because in the present action, in Article 7 of Condescendence, reference is made to said Closed Record which is averred to be incorporated brevitatis causa into the pleadings in the present action.

[19] It is not disputed in the present action that the action of reduction was commenced and that defences were lodged, under explanation put forward by Associated Rentals Limited, about the reason decree by default was obtained by interlocutor dated 19 April 2005. The pleadings in the second action were never the subject of debate. The pleadings were related to reduction not damages founded on delict.

[20] Matters did not rest with the first and second actions. The present action is an action for damages, based on averments about events related to the proof in 1994. The present action is founded upon an incorporation of the pleadings in the second action. It is averred in the present action that the decision of the Sheriff was "induced by a premeditated and deliberate fraud and deception of the court at the instance of Associated Rentals Limited" (Article 4). To ascertain what that fraud is alleged to be, it is necessary to look to the pleadings of the second action in the Closed Record of July 2004 (6/4 of process).

[21] I turn now to consider the pleadings in the present action much of which are incorporated brevitatis causa from the second action. It should be borne in mind that John Hardey raised proceedings in the second action against two defenders namely Associated Rentals Limited and Armando Russo. There were averments in the second action in Article 3 of condescendence by John Hardey that a photograph was lodged in process prior to the proof in the first action. Said photograph according to the oral submission made to me by John Hardey is to be found in the present process as 6/8 of process. It is averred in Article 4 of condescendence of the second action that "the photograph was referred to in evidence" by Associated Rentals Limited and was relied upon by them as showing that John Hardey had committed the wrongful acts of carrying bricks to construct the wall which was the subject matter of the first action. Reference is made in Article 4 of condescendence of the second action to dispute in the evidence about the date of said photograph and what it depicted. Pages 52, 56 and 57 of the transcript 6/7 of process are incorporated into the pleadings. It is plain that in these passages of evidence Armando Russo gave evidence that the photograph was taken about November 1991 and depicted John Hardey carrying bricks. John Hardey at pages 56 and 57 of said transcript gave evidence to a different effect. He accepted that the photograph is of him carrying bricks. He stated that this occurred in April 1991 and that the bricks had been delivered to be used a few days later to construct a pizza oven area. He denied that what was depicted in the photograph had anything to do with the matters complained of in the first action. It is averred that the said evidence of John Hardey was supported by the evidence of Amerigo Russo. Article 4 of condescendence in the second action avers that:

"such evidence of "Armando Russo" was given under oath in the knowledge that it was false. He claimed under oath and wrongly that the photograph was taken in November 1991 so as to justify a reasonable inference being drawn by the learned Sheriff that the photograph and content thereof was relative to the actions complained of in the litigation".

It is averred that Associated Rentals Limited and Armando Russo acting as agent for Associated Rentals Limited

"accordingly uttered the said photograph in order to induce the learned Sheriff to find as a fact that the pursuer was carrying bricks that "related to the point in November 1991 when the brickwork was being erected." The learned Sheriff was so induced. He accepted the evidence of Armando Russo that the photograph of "John Hardey" carrying bricks related to the point in November 1991 when the brickwork was being erected. "Associated Rentals Limited and Armando Russo", by uttering said photograph and thereafter deponing that it related to the point in November 1991 thereby committed a fraud and deception on the court."

These averments are reflected also in Article 5 of Condescendence of the second action where it is stated:

"The learned Sheriff as a consequence of accepting the testimony and evidence about the said photograph deponed by "Associated Rentals Limited and Armando Russo", rejected the veracity of "John Hardey" and his father's evidence."

Reference is then made to parts of the Sheriff's opinion. It is then averred:

"The said photograph was used.....as material evidence in order to persuade the learned Sheriff that "John Hardey" had committed the wrongful acts.... "Associated Rentals Limited and Armando Russo" deliberately deceived the learned Sheriff by producing said photograph and uttering it as a relevant and essential adminicle of evidence during the proof which wrongly depicted the pursuer being caught "red handed" committing the wrongdoing."

These extracts are I consider sufficient to give the flavour of the averments which underpin the second action and the present action by incorporation. I have considered the averments in all their detail albeit I do not consider it necessary to include the many pages of the pleadings in full in this opinion.

[22] Turning to an analysis of the present action, John Hardey, having incorporated the pleadings from the second action, makes averments in Article 7 which I now paraphrase and summarise: The rejection of the pursuer's evidence was caused in its entirety by the fraud of Associated Rentals Limited and the Sheriff's preference for the perjured evidence of Armando Russo as company agent for Associated Rentals Limited. Such evidence was given in furtherance of the case of Associated Rentals Limited and on its overall behalf. Such evidence was thereafter ratified and countenanced by Associated Rentals Limited in its insistence and enforcement of the decree thereby obtained. In particular, by its usage of the decree in the attempt to ordain the pursuer before the court, Associated Rentals Limited is at the very least vicariously liable for Armando Russo's wrongdoing. Had the learned Sheriff known of the fraud and perjury being perpetrated before him, he would not have been entitled in law to make such a preference.

[23] In Article 8 of condescendence in the present action John Hardey avers that as a direct consequence of the fraud complained of, he has suffered loss, injury and damage. Such loss injury and damage was foreseeable and a natural and probable consequence of Associated Rentals Limited's fraud and consequent harm. There are then averments to describe the loss, injury and damage suffered by John Hardey.

[24] These matters are set out in detail and I have examined the averments closely. I consider that it is plain that focus has been lost in these pleadings. In the present action Associated Rentals Limited have made an attack on the relevancy of the pleadings of John Hardey at Procedure Roll. That hearing is not completed and I do not at this stage deal with the relevancy plea in law. I merely point out the difficulties which arise when pleadings are done in this form. I have tried to make some sense of the pleadings in order to deal with the motion for amendment which is the subject of this Opinion.

[25] If one strips away the verbiage what is the basis of the present action? In the first action, the photograph, now 6/8 of process, was lodged prior to proof as one of a number of photographs. The photograph was not date or time stamped. It is not averred that the photograph was altered in some way. It is not disputed that it is a photograph of John Hardey. In the proof on 7 March 1994 there was evidence about the events, about the taking of the photograph and what it depicted. That evidence about the photograph was only part of oral testimony about what witnesses said they saw or knew about events relating to the issues in dispute in the first action. There was a conflict in evidence particularly in relation to the date the photograph was taken and whether it related to the building works in dispute or to some other event at an earlier date. The photograph is a genuine photograph. What is in dispute is the evidence of events and the evidence given about the photograph. John Hardey avers that the evidence relating the photograph to the date and events in November 2001 was false and perjured and as a result the Sheriff reached the wrong conclusion in the first action by rejecting his and other evidence to the contrary. These are the matters which form the basis of the second action on behalf of John Hardey. A fair reading of the pleadings in the second action make it plain that the complaint relates to the perjured evidence about the photograph. There is no complaint that the photograph was itself false and no averments to support such a contention. There is some language which I consider to be strange in the pleadings relating to the second action. For example, it is averred that Associated Rentals Limited and Armando Russo "by uttering said photograph and thereafter deponing that it related to the point in November 1991 thereby committed a fraud and deception on the court". The language of uttering a false document or fraudulent document is sometimes used in older terminology. But by the use of language, the pursuer cannot convert a case which is based on false testimony into a case which has a different basis namely the issue of a false document. The photograph is not a false document or a false production and there are no averments on which to base such a case.

The Minute of Amendment (16 of process)

[26] The Minute of Amendment does not seek to delete any of the existing averments despite the concession in law by John Hardey that the case in so far as based on the giving of false evidence is not well founded in the present action. John Hardey seeks to add to answer 4 in the present action some three pages of averments at the end of the existing averments. John Hardey accepts that there is a case in the present action founded upon averments relating to false evidence, but he does not delete the averments which he states found such a case. He seeks to add the new averments on top of that case for some sort of clarification. In my opinion that provides no clarification at all. The proposed amendment in my opinion adds to the problem of relevancy.

[27] I do not accept the submission by John Hardey to the effect that the existing pleadings in the present case are not really a case based on what a witness said or did in court in the Darker sense but a case based on fraud of the court. In a sense perjury is of course fraud on the Court but merely averring fraud on a Court cannot avoid in my opinion the implications of the Darker line of authority which I am satisfied represents the existing law. I have set out my interpretation of the existing pleadings in this case. I note the interpretation put forward by John Hardey at paragraph 8 of page 7 of 20 of process but that does not alter the fact that this is not a case pled about a "doctored" or "altered" or "false" photograph. If that is correct, the Darker line of authority and the concession in law by John Hardey in my opinion completely undermines the foundation of the present action in so far as it is based on the obtaining of a pretended judgment. The averments in the Minute of Amendment are not in my opinion merely some variation of fact in relation to the existing case.

[28] The Minute of Amendment also seeks to introduce averments about Palma Russo who is the wife of Armando Russo. She is stated to be the principal shareholder and company director of Associated Rentals Limited. The new averments relating to her are marked red on a duplicate of 21 of process which has been numbered as 22 of process. Number 22 of process has no formal status, it is lodged merely to assist in understanding the submission of parties. Standing the concession made by John Hardey that he has no information about the involvement, if any, of Palma Russo, I am not prepared to permit averments of fact to be made about her on the basis set out in the Minute of Amendment. There is an obligation on parties pleading an action not to put forward averments for which they have no basis in fact. If averments are to be made on an inferential basis, that should be plain from the pleadings.

[29] There is a dispute in this case about when time bar might operate. I am not in a position to determine that in this motion. Even if I accepted the analysis of time bar proposed by John Hardey that would date the commencement of the triennium period in 2005. On that basis the averments in paragraph 1 of the Minute of Amendment which I consider to be a radical charge in the case would be outwith the triennium. Regardless of time bar, I would not be prepared to exercise my discretion to allow John Hardey to introduce pleadings about events dating back to 1994 in the circumstances of this case. The second action did not mention any involvement of Palma Russo in some fraud or conspiracy. For that reason also, I am not persuaded to exercise my discretion to grant the Minute of Amendment.

[30] As there are other reasons for refusing paragraph 1 of the Minute of Amendment, I have not continued the case for medical reports. If the medical reports bear out the understanding of counsel for Associated Rentals Limited about the condition of Palma Russo, I would have considered prejudice as another reason for refusing to allow averments about her to be introduced at this stage on the basis that as a result of passage of time she is not able to instruct solicitors or give evidence.

[31] I did not understand that there was any opposition to paragraphs 2 and 3 of the Minute of Amendment. In all these circumstances I allow the Closed Record to be amended in terms of the Minute of Amendment and Answers under deletion of paragraph 1 and Answer 1.