Scottish Court of Session Decisions

Pursuer:  Ms M Hughes;  Campbell Smith WS

Defender:  Party

11 July 2014

[1]        This is an action for payment by the defender to the pursuers of a sum of money due to them in terms of an extract decree of 15 August 2012 following an interlocutor of 18 March 2010.  The extract decree is lodged as number 6/12 of process.  The decree awarded was for expenses in favour of the present pursuers who had entered appearance as an interested party in a petition by the defender’s late mother, whose estate he now administers, for judicial review of alleged omissions on the part of both Shetland Islands Council and Scottish Water.  The petition for judicial review was unsuccessful at first instance and a reclaiming motion against the decision of the Lord Ordinary was refused by an Extra Division in February 2010 – Anderson v Shetland Islands Council 2010 SC 446.  The interlocutor for expenses of 18 March 2010 is the interlocutor of that Division following the unsuccessful reclaiming motion.  Accordingly, the pursuers hold an ex facie valid decree of this court for payment of those expenses.  The defender has refused to acknowledge the decree as a legitimate debt on the estate and that refusal has resulted in these proceedings.

[2]        On 24 June 2014 I heard argument on the pursuers’ motion for summary decree.  Although initially the defender had enrolled a motion of his own for dismissal of the action and decree de plano in terms of the counterclaim, Mr Anderson confirmed that he was not insisting on that motion.  He sought only to oppose the motion for summary decree and asked that I allow a proof of the parties' averments in the principal action and in the counterclaim.

[3]        It is further acknowledged by the defender that, absent reduction of the decree sought to be enforced and subject to the arguments about the identity of the present pursuers dealt with below, there would effectively be no defence to the action.  Accordingly, the defender’s counterclaim seeks reduction of three interlocutors.  These are listed as those of 20 May 2008, 16 February 2010 and 15 August 2012 in the counterclaim.  However, it was accepted during the course of argument before me that the relevant interlocutors are that of the Lord Ordinary in the judicial review petition dated 30 May 2008 and the Extra Division’s interlocutor awarding expenses dated 18 March 2010.  The extract decree is correctly stated as being dated 15 August 2012.  Importantly, the judicial review matter proceeded to the UK Supreme Court after the decision of the Extra Division.  At my request during the course of argument, a copy of the relevant judgment of the Supreme Court was obtained.  This is a decision of three of the Justices of the Supreme Court and can be found at [2012] CSOH 23 at para 8. 

[4]        The test for summary decree is well established.  Reference was made in the argument before me to the case of McLaughlin v Morrison & Esure Services Ltd [2013] CSOH 168 where Lord Jones helpfully reviews the general requirements for an application of this sort including the authoritative decision of Henderson v 3052775 Nova Scotia Ltd 2006 SC (HL) 21.  There was no dispute before me that a summary decree motion cannot be used to replace a Procedure Roll discussion but that if scrutiny of the pleadings and other material illustrates that there is only a dilatory defence being run the court can dismiss the action.  The argument before me was that the position taken by the defender in the defences and the counterclaim was neither genuine nor authentic and that the defender would be bound to fail.

[5]        Various arguments were presented in support of the motion.  I propose to deal with the last one of these presented first because it raises an issue of competency.  The pursuers’ action is proceeding in this court as an ordinary action.  Rule of Court 25.1 is applicable.  It provides, inter alia, as follows:

“(1)  In any action other than a family action within the meaning of Rule 49.1(1) or an action of multiple pending, a defender may lodge a counterclaim against a pursuer –

(a)  where the counterclaim might have been made in a separate action in which it would not have been necessary to call as a defender any person other than the pursuer; and

(b)  in respect of any matter –

(i)  forming part or arising out of the grounds, of the action by the pursuer;

(ii)  the decision of which is necessary for the determination of the question in controversy between the parties;  or

(iii)  which, if the pursuer had been a person not otherwise subject to the jurisdiction of the court, might have been the subject matter of an action against that pursuer in which jurisdiction would have arisen by reconvention.”

Accordingly, where a counterclaim as in this case seeks to reduce interlocutors of court, which would normally be made in a separate action of reduction, such a counterclaim will nonetheless be competent if and only if it would not have been necessary to call any other parties as a defender to those reduction proceedings.  As the counterclaim is presently framed, it seeks to reduce two orders of court and an extract decree.  The Lord Ordinary’s interlocutor, the first one sought to be reduced, is in the following terms:

“28 May 2008                                                                          Lord Matthews

The Lord Ordinary having resumed consideration of the cause, sustains the first and second pleas in law for the first respondents and interested party; sustains the first plea in law relating to section 1 of the Sewerage (Scotland) Act 1968 in respect of the second respondents; repelling in part the first plea in law relating to the claim under section 2 of that act for the second respondents; dismisses the petition and discerns; appoints the cause to call by order upon Friday 6 June 2008 in respect of the question of expenses.”

[6]        It is immediately apparent from the terms of that interlocutor that the pleas in law of both respondents and the present pursuers were sustained.  Furthermore, the interlocutor dismisses the judicial review petition.  Standing the terms of the rule of court set out above and of the interlocutor complained of, I consider that the counterclaim is as it is presently framed is  incompetent.  Reduction of the Lord Ordinary’s interlocutor could not be granted without convening Shetland Islands Council and Scottish Water as defenders. During the course of argument before me this was effectively recognised by Mr Anderson and he sought ultimately to make a motion at the bar to amend the counterclaim by inserting the words “insofar as relating to Nicolson Bros only” after the interlocutors are listed in the first conclusion of his counterclaim.  No motion was made to amend the erroneous dates of the interlocutors complained of.  The motion to amend was opposed by Ms Hughes as coming too late and as failing to rectify the difficulties with the counterclaim.  She explained that no orders were ever sought against the interested party in the initial judicial review petition.  The petition was raised against two respondents and the interlocutor complained of dismissed that petition as directed against them.  The interested party’s role was simply that the Lord Ordinary had decided that it (Nicolson Bros) was entitled to make submissions before him.  Thus the two primary parties convened as respondents in the petition received no intimation of the counterclaim and have not been convened to it.  The decision of the Lord Ordinary in the judicial review petition was that the petition was irrelevant and that was confirmed by the Extra Division. 

[7]        I have decided not to accede to the defender’s motion to amend.  He is well aware of and appeared in the separate proceedings raised by Shetland Islands Council for decree in similar terms to that sought by the present pursuers and in which a decision of Lord Stewart was issued, as previously mentioned, on 13 February this year.  Mr Anderson appears as a party executor litigant in both cases.  Having been involved throughout the lengthy dispute giving rise to these and other proceedings he is well aware that the interlocutors complained of primarily involved the two principal respondents in the judicial review petition.  More importantly, I do not consider that the parts of the Lord Ordinary’s interlocutor relating to the present pursuers can simply be excised in the way suggested by the defender.  The argument was one of relevancy and the interested party supported a successful argument by the first and second respondents that the petition was irrelevant.  The decree now sought to be enforced, namely in relation to expenses, flows from the success of the first and second respondents as well as from the more limited role of the present pursuers in having the petition dismissed. In essence, the arguments of the principal respondents found favour with the court and the interested party, while maintaining a legitimate separate interest, benefitted from that success. Further, it is difficult to see how it could be competent to reduce certain interlocutors insofar as they affect but do not primarily concern the interested party while leaving the orders of the Supreme Court standing.  In the judgment of the Supreme Court the appeal against the decision of the Extra Division was “wholly without merit” and it is specifically noted that the appeal made no attempt to answer the criticisms of the pleadings in the petition which led to the Extra Division upholding the finding that they were irrelevant – see para 15(b) of 2012 UKSC 7.  Of course, the pursuers as interested party in those proceedings chose not to be involved in the UK Supreme Court proceedings.  Nonetheless, I do not consider it would be competent to excise parts of interlocutors that form an integral but restricted part of the final determination of an action. It seems to me that the interlocutors in the judicial review case insofar as involving the present pursuers are inextricably linked with the decisions involving the principal respondents.  In any event there has already been an unsuccessful attempt by the present defender to reduce the decree so far as it involves  one of the principal respondents, Shetland Islands Council – 2014 CSOH 23. For this and the reasons previously outlined, even if the proposed amendment would rectify the difficulty with the competence of the counterclaim, I exercise my discretion in favour of refusing to allow it.

[8]        In the event that I am wrong in concluding that the counterclaim is incompetent or if I have erred in the exercise of my discretion in refusing to allow the defender to amend in an attempt to make it competent I would require to address the other arguments for summary decree presented to me and I propose to do so as succinctly as I can given the lengthy history of the related dispute.

[9]        Ms Hughes submitted that there were in essence two matters raised in the defences and counterclaim that require to be addressed.  The first comprises a number of issues raised in Answer 1 in the principal action to the effect that the court does not have jurisdiction, that the title, name designation and address for the pursuers is denied and that the proprietorial interests of the pursuers are also disputed.  I cannot see any possible basis on which this court does not have jurisdiction and Mr Anderson did not seek to argue that.  The parties have of course litigated extensively against each other in the judicial review proceedings.  So far as I can see the present pursuers were always designed in those proceedings in the way that they are in this action.  It was pointed out that the defender had initiated proceedings in the past in Lerwick Sheriff Court in which he convened the present pursuers and designed them in the way that they are in these proceedings.  He has sent a recorded delivery item to “Nicolson Bros” – see number 6/11 of process.  The present pursuers are referred to as the same entity in previous proceedings as they are in this action.  They are referred to in particular in the previous judicial review petition as “Nicolson Bros, developers”.  It is clear from looking at the pleadings in the judicial review petition which are lodged in this process that the interest of the present pursuers in those proceedings was not dependent on them owning any particular property.  It was their development of property that led them to be named as a possible interested party.  Nothing of any substance was submitted by the defender in answer to these preliminary arguments and I do not consider there to be any merit in them whatsoever. 

[10]      The second matter and the primary focus of the argument before me (predicated on there being a competent counterclaim) was in relation to the various claims made by the defender in the pleadings as to the invalidity of the decree sought to be enforced.  The defender’s counterclaim, at statement of fact 6 avers that the subject matter of the previous judicial review petition was, inter alia, “the occupation and use of said Easterhoull Hill on the East Voe in Shetland”.  While Easterhoull Hill is not mentioned at all in the judicial review petition it may well be the hill at East Voe referred to therein.  However, scrutiny of the pleadings in the judicial review petition again illustrates that the occupation and use of the hill was not a feature of the judicial review at all.  The subject matter of that action was alleged statutory breaches by Shetland Islands Council and Scottish Water in relation to drainage and/ or sewerage matters.  The petition raised the issue of the collection and treatment of surface water and that matter was directed at the first and second respondents to the petition.  It is clear from the Lord Ordinary’s opinion (lodged as number 6/12 of process as part of the reclaiming print) at para 691-693 and 719-720 that the basis for dismissal of the petition was not that as suggested in statement of fact 13 of the present counterclaim.  The case was decided both in the Outer House and in the Inner House as a matter of relevancy.  The Extra Division agreed that the petitioners’ cases against the two respondents under the Roads (Scotland) Act 1984 and the Sewerage (Scotland) Act 1968 were irrelevant.  Statement of fact 12 of the counterclaim makes complaints about the chief executive of Shetland Islands Council and his alleged misconduct in public office.  That is irrelevant in a question between the present pursuers and the defender.  The thrust of the counterclaim in subsequent paragraphs is an allegation that the present pursuers somehow concealed from the court information about who was in occupation of Easterhoull Hill.  Again, it is hard to see how that could be relevant in a question of enforcement of expenses when it was not the subject matter of the petition.  Statement of fact 16 makes a very serious but bold assertion of bias on the part of the Extra Division.  The defender did not seek to pursue that argument before me.  Statement of fact 17 refers to the European Convention of Human Rights (ECHR) but again having scrutinised the pleadings and judicial opinions in the judicial review petition it appears there is no basis for the assertion that there was somehow a failure by the relevant courts to mention or consider human rights issues averred by the petitioner.  The counterclaim also contains a claim for damages on the basis that the late Mrs Anderson suffered considerable upset and distress in her declining years in relation to the litigation.  The present pursuers’ part in that is again said to relate to the occupation and use of the land in question and a failure to disclose that to the court.  In summary, Ms Hughes submitted that the defences and counterclaim were irrelevant as no proper basis of fraud on the part of the present pursuers had been averred.  No specific averments of some material breach of duty to the court had been averred and a number of averments were clearly incorrect when considered against the other undisputed documentary material. 

[11]      Ms Hughes emphasised that there was some urgency in the summary decree motion given that it is recorded in Lord Stewart’s recent opinion at paragraph 8 that the estate is either currently insolvent or barely solvent.  There was also reference to possible proceedings for sequestration of the estate having been presented in Lerwick Sheriff Court although not yet warranted or served. 

[12]      Mr Anderson made a number of points in reply.  On a preliminary matter he argued that it was inappropriate for the pursuers to refer to a petition for sequestration of which the defender had as yet no knowledge.  The defender sought to set out much of the background to the long running dispute between his late mother and Shetland Island Council and Scottish Water.  He referred to various pieces of local knowledge in relation to Nicolson Bros.  He accepted that it may well be that an entity still existed called Nicolson Bros but he did not accept that when the judicial review proceedings were raised in 2007 that entity owned the land in question in the East Voe.  On being questioned by me, however, he accepted that the judicial review petition was intimated to them as developers rather than owners.  The defender’s main complaint seemed to be that if the present pursuers had disposed of their East Voe land prior to 2007 then they had been obliged to explain that to the court when entering appearance.  That was said to be the thrust of the defences and counterclaim.  The defender went so far as to argue that as the judicial review was about the drainage of surface water then if the pursuers had been candid in their pleadings the court could not have decided the issue as it did.  Various planning permission documents, unauthenticated, were referred to but it was difficult to see the significance of these given that the judicial review petition related to the petitioner’s allegation that since certain houses were constructed previously surface water was no longer being effectively drained from her property and had thereby caused damage.  The defender claims that a company called JHD Limited had legal title to the land in 2007 and that the present pursuers should have disclosed that to the court.

[13]      I found it difficult to understand the defender’s argument that the planning document number 7/2 of process was of assistance to him.  It was an application by JHB Limited in 2004 which, on Mr Anderson’s submissions was apparently initially refused, subsequently amended and then either granted or not granted but in any event not physically proceeded with.  There seemed on the face of it to be no relationship between that application and previous damage to the late Mrs Anderson’s property. 

[14]      Having considered the arguments made I have decided that the defences and counterclaim, if competent, disclose no defence to the pursuers’ claim to enforce an ex facie valid extract decree of court.  If the present pursuers failed to disclose to the court fully the position in relation to ownership, occupation and use of the land about which complaints in relation to the collection of surface water had been made, that would have been wrong.  However that issue was not one material to the case or to the tangential interest in relation to which the pursuers entered the proceedings as an interested party.  The defender’s pleadings in my view fall way short of the sort of claim that would require to be made to successfully reduce a decree in foro of this sort.  There is on the face of it no basis for claiming that matters would have turned out differently had specific averments been made in relation to occupation and use of the land by the then interested party.  In relation to other issues such as the bold assertion of bias on the part of the Extra Division, this is wholly lacking in specification and not supported by argument by the defender at this stage.  That is in contrast to the position taken in the case brought by Shetland Islands Council against the defender referred to earlier. I am satisfied that the position taken by the defender in these proceedings is the type of dilatory defence that can justify summary decree being granted against him. His defence and counterclaim would be bound to fail if the action proceeded further.

[15]      For all the reasons given above I am satisfied that there is no defence to this action as the defence is dependent on a counterclaim that is incompetent which failing irrelevant.  Even leaving aside whether or not there is a petition for sequestration in Lerwick Sheriff Court, it is clear that the matter of enforcement of this decree is now required without further delay.  Accordingly, I shall repel the defender’s pleas in the defences and counterclaim and grant summary decree in favour of the pursuers.  I advised the parties of the content of this opinion on Monday 7 July 2014 when I dealt with all questions of expenses.