EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Clarke Lord Menzies Lord Philip	[2013] CSIH 34 XA128/12 OPINION OF THE COURT delivered by LORD CLARKE in the appeal by LOUISE WEDDELL Defender and Appellant; against IAN ANDERSON Pursuer and Respondent: _______________

Act: Richardson; Morisons, Solicitors LLP (Defender and Appellant)

Alt: McLeod; Ian Smith & Partners (Duns) Solicitors (Pursuer and Respondent)

20 March 2013

[1] This appeal, against a decision of the Sheriff Principal of Lothian and Borders at Edinburgh, was heard by this court on 20 March 2013. The court was able to give its decision, which was to refuse the appeal, at the end of the hearing. We undertook to provide our full reasons for that decision in due course, which we now do.

[2] The appeal raises a question as to the proper construction of certain of the Sheriff Court Rules. The proceedings concerned relate to a Sheriff Court action in which the respondent sues the appellant for the balance of sums claimed to be due to him by her for works carried out on her behalf. The appellant has a counterclaim. The action commenced in April 2007, almost six years ago. After sundry procedure and inordinate delay the sheriff, on 16 December 2011, fixed a diet of debate to take place on 19 March 2012. On 14 March 2012, five days before the diet of debate, the appellant moved to have the diet discharged and the case sisted for the purpose of obtaining legal aid. This motion was opposed and the sheriff refused it.

[3] On 15 March 2012, the appellant's agents withdrew from acting by letter sent to the Sheriff Court. In his note, the sheriff said that:

"As a previously fixed diet, that of 19 March 2012, was to occur within 14 days, I chose to consider the matter at that diet as I was entitled to do in terms of the Ordinary Cause Rules 1993 (OCR), r.24.2 (1A)(d)".

In using the phrase "to consider the matter" the sheriff was employing the exact language of the rule in question. At the diet of debate fixed for 19 March 2012, the appellant did not appear, nor was she represented. She was, accordingly, in default in terms of OCR 16.2(1)(c) by failing to appear or be represented at a diet of debate (OCR 16.2(4)(d)). Counsel for the respondent, who appeared before the sheriff, moved the court to grant decree and to dismiss the counterclaim, with expenses, by default, in the exercise of the court's discretion in terms of OCR 16.2(2). After hearing submissions, in support of that motion, the sheriff granted the respondent's motion.

[4] Extract of the decree for payment by the respondent was issued on 12 April 2012 from the Office of the Sheriff Clerk. The sheriff, in his note, went on to set out his reasons for granting the motion. He, himself, had been directly dealing with these proceedings for over a year, prior to granting decree. He had regard to the fact that the appellant had, on 14 March 2012, moved for discharge of the diet of debate and to sist the proceedings, which motions had been refused. The sheriff had done so, he said, because of the gross delay that had already taken place in these proceedings. The appellant's failure to appear, or to instruct a representative to appear at the diet of debate was, the sheriff considered, another exercise of delaying tactics by the appellant, some two years after she had been allowed to amend her pleadings.

[5] The appellant appealed the sheriff's interlocutor of 19 March 2012. She did so notwithstanding that, by that time, decree had been extracted. The Sheriff Principal refused the appeal and delivered an ex tempore judgment on 17 July 2012. Her Ladyship noted that the appellant was seeking to appeal an extracted interlocutor and she went on to say:

"As Macphail in Sheriff Court Practice (Noter) at 18.19, 'As a general rule there can be no appeal against an extracted interlocutor, unless the interlocutor or the extract has been improperly and incompetently issued'".

The Sheriff Principal then continued:

"The case of Alloa Brewery Co Ltd v Parker 1991 SCLR 70 is authority for that proposition. I was referred to that authority and it remains binding. Accordingly, the appellant argues that the sheriff acted in an incompetent fashion by granting decree by default, standing the withdrawal of the solicitors, a fact which the sheriff was aware of. The withdrawal of the solicitors brings into play OCR 24.2 and accordingly, when the appellant failed to attend the diet of debate on 19 March, the sheriff had to deal with the provisions of both OCR 24.2 and OCR 16.2 dealing with decree by default."

[6] Before the Sheriff Principal the appellant relied on the judgment of Sheriff Principal Kerr in Trad Hire & Sales Ltd v Campbell 2003 SLT (Sh Ct) 41 to support her position that what the sheriff had done in pronouncing his interlocutor of 19 March 2011 was, in the circumstances, incompetent. Notwithstanding what is said in that judgment, the Sheriff Principal, in the present case, refused the appeal.

[7] Before this court, counsel for the appellant, accepted that unless he persuaded the court that the sheriff's interlocutor of 19 March 2012 had been improperly or incompetently issued, the appeal must fail. In seeking to argue that the sheriff's interlocutor was, indeed, incompetent counsel relied, to a significant extent, on the decision of Sheriff Principal Kerr in the Trad Hire & Sales Ltd case.

[8] The relevant rules of the Sheriff Court, which have to be considered in this context, are as follows:

"Decree by default

16.2-(1) In a cause to which this Chapter applies, where a party fails -

(a) to lodge, or intimate the lodging of, any production or part of process within the period required under a provision in these Rules or an order of the sheriff;

(b) to implement an order of the sheriff within a specified period;

(c) to appear or to be represented at any diet; or

(d) otherwise to comply with any requirement imposed upon that party by these Rules;

that party shall be in default.

(2) Where a party is in default, the sheriff may, as the case may be -

(a) grant decree as craved with expenses;

(b) grant decree of absolvitor with expenses;

(c) dismiss the cause with expenses; or

(d) make such other order as he thinks fit to secure the expeditious progress of the cause.

(3) Where no party appears at a diet, the sheriff may dismiss the cause.

(4) In this rule, "diet" includes -

(a) a hearing under Rule 9.12 (Options Hearing);

(b) a hearing under Rule 10.6 (Procedural Hearing);

(c) a proof or proof before answer; and

(d) a debate.

Withdrawal of solicitors

24.1-(1) Subject to paragraph (3), where a solicitor withdraws from acting on behalf of a party, he shall intimate his withdrawal by letter to the sheriff clerk and to every other party.

(2) The sheriff clerk shall forthwith lodge such letter in process.

(3) Where a solicitor withdraws from acting on behalf of a party in open court and in the presence of the other parties to the action or their representatives, paragraph 1 shall not apply.

24.2-(1) Subject to paragraph (1A) the sheriff shall, of his own motion, or on the motion of any other party, pronounce an interlocutor ordaining the party whose solicitor has withdrawn from acting to appear or be represented at a specified diet fixed by the sheriff to state whether or not he intends to proceed, under certification that if he fails to do so the sheriff may grant decree or make such other order or finding as he thinks fit.

(1A) Where any previously fixed diet is to occur within 14 days from the date when the sheriff first considers the solicitor's withdrawal, the sheriff may either -

(a) pronounce an interlocutor in accordance with paragraph (1); or

(b) consider the matter at the previously fixed diet,

.....

24.3 Where a party on whom a notice and interlocutor has been served under Rule 24.2(2) fails to appear or to be represented at a diet fixed under Rule 24.2(1) and to state his intention as required by that paragraph, the sheriff may grant decree or make such other order or finding as he thinks fit."

In brief, the submission made on behalf of the appellant, was that the provisions of Rule of Court 24.2(1A) obliged the sheriff, in the circumstances of this case, to pronounce an interlocutor at the diet of debate in terms of Rule of Court 24.2(1), ordaining the appellant, whose solicitor had withdrawn from acting, to appear or be represented at a specified diet, fixed by the sheriff, to state whether or not she intended to proceed, under certification that if she failed to do so, the sheriff might grant decree of make such other order or finding as he thought fit. Rule 24 has a history. Rule 24(1A) was introduced in 2000. That amendment to the Rule post-dated a decision of Sheriff Principal Nicholson in Gray v Fortune 2000 SLT (Sh Ct) 91, in which the Sheriff Principal held that where a party's solicitor had intimated to the court that they had withdrawn from acting, the court could not grant decree of default before intimation was made in terms of OCR 24.2 to the party against whom decree of default might be sought.

[9] In the case of Munro & Miller (Pakistan) Ltd v Wyvern Structures Ltd 1997 SC 1, the First Division addressed a situation very similar to that arising in the present case. A diet of proof had been set down for 9 May 1995. On 22 April 1995 the pursuers sought discharge of the diet of proof. The Lord Ordinary refused the motion. The pursuers did not seek leave to reclaim. On 4 May 1995 the pursuers' agents intimated that they were withdrawing from acting and that they had no instructions from the pursuers. On the date of the proof no counsel appeared to represent the pursuers, the pursuers thereby being in default in terms of r.20.1(1) of the Rules of the Court of Session 1994. The defenders moved the Lord Ordinary to grant decree of absolvitor, rather than decree by default in terms of r.20(2), which failing for the Lord Ordinary to ordain the pursuers in terms of r.30.2 to intimate whether they intended to proceed with the action. The Lord Ordinary assoilzied the defenders, but superseded the extract of the interlocutor for 28 days. The pursuers reclaimed. The reclaiming motion was refused. Lord President Rodger, in giving the Opinion of the Court at page 2 thereof, observed:

"Very understandably, the Lord Ordinary appears to have taken the view that, if he merely ordained the pursuers to intimate whether they were proceeding with the action, he would in effect be giving them the equivalent of the very discharge of the diet of proof, which Lord Gill had refused them less than two weeks before".

That observation can be regarded as describing exactly the outcome (mutatis mutandis) of the appellant's contention as to what the sheriff ought to have done in the present case. The Lord President continued:

"In these circumstances, having regard to the way in which the pursuers had conducted the proceedings, we are satisfied that the Lord Ordinary was entitled to reach the view that the appropriate course for him to take was to grant the defenders' motion for absolvitor".

At page 3 of the Opinion of the Court, the Lord President continued:

"The effect of counsel's argument would be to raise what is said to be a practice into a rule. But the terms of r.20.1 show that no such rule exists where a party is in default and in particular r.20.1(2) shows that the court may grant decree by default if a party fails to attend when a case calls for proof. As the terms of the rule make clear, the judge has a discretion. He must therefore consider all the circumstances and choose the most appropriate course. On some occasions, as for example where the party fails to attend because the agents withdraw from acting on the morning of the proof, it may be appropriate for the judge to ordain him to intimate whether he intends to continue with the action. But in other cases the circumstances will be such as to make it appropriate for the judge to proceed forthwith to grant decree by default".

Oddly enough that case does not appear to have been before the court in either the case of Gray or Trad Hire & Sales Ltd. We, of course, take the point, made by counsel for the appellant, that relevant Rules of the Court of Session on the one hand, and the Sheriff Court on the other, are, to some extent, in different terms. But we are not satisfied that the dicta of the Lord President, just quoted, cannot be read to fit the position obtaining under the relevant Sheriff Court Rules and we note, in that respect, that in Macphail: Sheriff Court Practice (3^rd ed), the decision in Munro & Miller (Pakistan) Ltd is cited, without disapproval or qualification, at 14.12, where it is stated in relation to the position in the Sheriff Court:

"Where the default consists of a failure to attend a diet, the court has to consider all the circumstances, including whether further intimation should be made to the absent party. This consideration also applies in the event of a party failing to appear after the withdrawal from the agency of his solicitor".

Whatever may have been the position before the addition of ORC 24(1A) (and we have some doubt as to whether what was said in the decision in Gray or Trad Hire & Sales Ltd was correct), the matter now turns clearly upon what is the construction to be placed on the provisions of ORC 24(1A). In our opinion, the wording of that provision gives the sheriff an unfettered discretion to decide what course to follow, having regard to all the relevant circumstances of the case and, most certainly, does not fall to be read as obliging the sheriff in every case to follow the procedure set out in ORC 24.2(1). The words "consider the matter" in our opinion fall to be read as having that effect. At one stage, counsel for the appellant seemed to seek to modify his position by saying that the obligation to follow the procedure in ORC 24.2(1) might be subject to exceptions but that, it seems to us, was really a late in the day recognition that the relevant provisions confer a discretion on the sheriff.

[10] In all the circumstances, therefore, as regards the proper construction to be placed on ORC 24.2(1) and (1A), we are satisfied that what the sheriff did in this case was within his competence and therefore the appeal falls to be refused. It follows also that, in so far as the decision of Sheriff Principal Kerr in Trad Hire & Sales Ltd v Campbell suggests that the interplay of OCR 16 and OCR24 does not involve simply the exercise of a discretion on the part of the sheriff, having regard to all the relevant circumstances, that decision falls to be disapproved. As the Lord President said in Munro & Miller (Pakistan) Ltd "He (the sheriff) must therefore consider all the circumstances and choose the most appropriate course".