Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2015] CSOH 167

A491/13

OPINION OF LORD BANNATYNE

In the cause

AIRD GEOMATICS LIMITED AND OTHERS

Pursuers;

against

RICHARD STEVENSON AND ANOTHER

Defenders:

Pursuers:  Burr;  Reid Cooper

Defenders:  McConnell;  Drummond Miller

10 December 2015

Introduction
[1]        In this action (in terms of a counterclaim) the first defender sought reparation for loss injury and damage arising from the pursuers wrongfully obtaining an interim interdict against him.  The pursuers are three limited companies and an individual referred to in the pleadings collectively as the Aird Group.

Background
[2]        The pursuers raised an action seeking interdict, interim interdict and damages against the first defender who they claimed was a former employee of the Aird Group.  The first defender’s position was that he had been employed by the first pursuers.  The details of the underlying dispute so far as relevant to the issues before the court at the present time are these:  in general terms the action related to allegations that the first defender, following leaving his employment with the Aird Group and obtaining employment with the second defenders (the action also sought interdict, interim interdict and damages against them) was in breach of certain terms of his contract of employment namely:  a confidentiality clause and a non-solicitation clause.  The pursuers alleged, among other things, that having left his employment with the Aird Group, the first defender approached the second defenders with a view to undertaking similar work for them.  The pursuers also claimed that the first defender was carrying out land surveying work at a number of construction sites in various parts of the country and that this work involved him in making use of confidential information and material owned by the pursuers in breach of the obligations in his employment contract. 

[3]        The first defender in response to the action lodged defences denying the allegations and resisting the proceedings on various grounds.  For the purpose of the issues presently before the court it is not relevant to further detail the underlying dispute or defence thereto.  He in addition lodged a counterclaim in which he sought damages of £60,000 on the ground that the interim interdict had been wrongfully obtained.  He alleged that, in consequence of the wrongful grant of interim interdict, he had suffered, and continued to suffer, loss of income, which he would otherwise have received from the second defenders.  His employment with them had been terminated following the grant of interim interdict and he had been unable to obtain other permanent employment.  He averred that his reputation had been damaged by the granting of the interim interdict and that he had suffered anxiety, stress and inconvenience.

[4]        An interim interdict was obtained by the pursuers ex parte on 3 September 2013 in terms of the conclusions of the summons against the first defender and the second defenders.  It was on the motion of the first defender (opposed by the pursuer) recalled by Lord Jones on 2 May 2014.  On 11 July 2014 the court allowed parties a proof before answer in respect of the principal action and the counterclaim which had been lodged on behalf of the first defender.  The proof was thereafter set down to commence on 28 April 2015.  The action between the pursuers and the then second defenders was settled by way of a joint minute and by interlocutor of 8 April 2015 they were assoilzied from the conclusions of the summons, in so far as they were directed against them.  On 22 April 2015 the pursuers intimated a minute of abandonment, in which they consented to decree of absolvitor being granted in favour of the first defender in respect of the principal action.  The case came before the Lord Ordinary on the date appointed for proof.  He heard a motion on behalf of the first defender seeking summary decree in terms of the counterclaim.  It was argued that there was no relevant defence to the first defender’s claim for damages.  This was opposed by the pursuers.  The Lord Ordinary following hearing legal argument held in an opinion reported as Aird Geomatics Limited and Others v Richard Stevenson and Another [2015] CSOH 57 that the recall of the interim interdict raised a conclusive presumption that the interim interdict had been wrongfully obtained.  He went on to hold that in light of this finding the only issue therefore remaining was whether the wrongful obtaining of the interim interdict caused the first defender any loss and if so the quantum thereof.  It is those issues which came before me. 

[5]        When the matter came before me the first defender abandoned his claim for patrimonial loss. 

The evidence
[6]        The only evidence on behalf of the first defender came from the first defender himself.  His evidence was fairly short, however, he gave evidence with respect to each of the heads of damage claimed.  In particular he spoke to his employment with the second defenders being terminated as a result of the granting of the interim interdict.  Initially on the interim interdict being served he was placed on gardening leave and thereafter on 23 October 2013 as a result of the interim interdict his employment was terminated.  Thereafter he had to find another source of income.  He could not find other permanent employment.  Rather he had to become self-employed.  This involved him taking short term contracts.  Later he required to set up a limited liability services company and obtained work through this company.  But for the interim interdict it was his position that there was no reason why his employment with the second defenders would not have continued into the foreseeable future as there was no indication that they were unhappy with the way that his employment with them was working out.  He spoke to the inconvenience of having to instruct solicitors and counsel in order to defend this action and his having to consult with both solicitors and counsel.  He spoke to the stress and anxiety from which he had suffered as a result of the obtaining of the said interim interdict.

[7]        I will look at his evidence in a little greater detail in the discussion section of this opinion. 

[8]        The only witness led on behalf of the pursuers was Shona Aird who was the company secretary of the three limited companies which formed the Aird Group.  Her evidence was in extremely short compass.  She explained that the pursuers were all part of a family business which had been set up by her father.  The only other piece of evidence which she gave which was material to the issues before the court was that, according to her understanding of matters, the only persons who became aware of the interim interdict against the first defender were:  herself, her father (Alan Aird), Stuart Bloomfield and Keith Sutherland who were both directors of the pursuers and Taylor Wimpey a major client of the pursuers. 

[9]        The only other piece of evidence which was of any materiality was contained in a joint minute at paragraph 4 and was in the following terms:

“That as a result of the interim interdict the second defender terminated the first defenders employment.”

Submissions on behalf of the first defender
[10]      Counsel for the first defender opened by making this submission as to the approach which the court should take when considering the evidence:

“...the pursuers chose to lead no evidence, but instead to abandon their claim, both for interdict and damages.  The court should draw inferences from that that are most favourable to the first defender:  see Cumbernauld Housing Partnership Ltd v Davies [2015] CSIH 22 at paragraph 31.  The first defender denies any wrongdoing whatsoever, delictual or contractual, and his position in that regard has been accepted by the pursuers by virtue of their abandonment of the principal action.”

[11]      So far as the credibility and reliability of the first defender was concerned his position was that I should accept him as a credible and reliable witness and that his evidence should be accepted in its entirety.  In particular he submitted that no adverse inference regarding his credibility should be taken from his failure to disclose certain invoices to his accountant.  He submitted that on the evidence this was clearly a simple mistake. 

[12]      So far as Shona Aird was concerned he accepted her evidence as both credible and reliable.  However, it did not advance the pursuers’ defence to the damages claim.

[13]      As regards the factual consequences of the wrongful obtaining of the interim interdict he said this:

• The first defender had obtained employment with the second defenders prior to the interim interdict being served.The evidence was that both defenders were happy with the employment relationship until the interim interdict was served.Ultimately he submitted it was not important whether or not the first defender’s contract was for a fixed term of a year or was permanent.On the evidence he would have continued with the second defenders after the end of the year.
• The wrongful interim interdict was served on the first and second defenders.At that stage the second defender placed the first defender on gardening leave, took legal advice, and thereafter terminated his employment.There was no reason to consider that the termination would have taken place had the interim interdict not been served, and in fact it was agreed in the joint minute that “as a result of the interim interdict the second defender terminated the first defenders employment”.

[14]      Turning to the issue of damage to the first defender’s reputation he submitted that it was damaged by the service of the interim interdict.  It was damaged in the sense that the second defender took the decision to terminate his employment thereafter.  It was also damaged by Stuart Bloomfield, Keith Sutherland, Alan Aird and Taylor Wimpey becoming aware of the terms of it.

[15]      With respect to the issue of inconvenience he was inconvenienced by the existence of the wrongful interim interdict in the following ways:  he had required to instruct and consult urgently with solicitors with a view to having it recalled; he required to apply for legal aid;  his estimate was that he had in the relevant period spoken to his solicitors more than 50 times and had attended a number of consultations in Edinburgh with counsel.  Separately, he had lost his job with the second defenders.  He required to seek other employment urgently.  He required to set up as a self‑employed person and thereafter he had required to create a service company.  He would not have been put to any of that inconvenience if he had continued his employment with the second defenders.  So far as stress and anxiety was concerned he referred to the first defender’s evidence on this which he accepted was brief, but was he submitted sufficient to support an award under this head of damage.

[16]      As regards the legal consequences which flowed from the wrongful obtaining of the interim interdict he said: the first defender was entitled to damages for wrongful interdict.  Wrongful interdict was a delict (see:  Delict, Walker 2^nd Edition at pages 853 – 855).  The purpose of an award of damages was, so far as was possible, to put the innocent party in a position they would have been in if they had not suffered the wrong complained of:  see O’Neill v Tomlinson 2013 NIQB 97 at paragraph 10 and the reference to “the elementary rule” by Lord Hope of Craighead at paragraph 30 in Lagden v O’Connor 2004 1 AC 1067.

[17]      Turning to stress, anxiety and inconvenience counsel contended that it had been established beyond doubt since Mack v Glasgow City Council 2006 SC 543, in the context of breach of contract, inconvenience was a relevant head of claim.  Stress and anxiety are part of that inconvenience.  There were delictual cases where inconvenience had been awarded as a discrete head of claim:  George Porteous Arts Limited v Regal Motors 1970 SLT (N) 75 was an example of this and there were in addition a number of cases in which parties had agreed sums in respect of inconvenience and the courts had pronounced decrees including those sums without adverse comment:  Buxton v Direct Line Insurance Plc, Edinburgh Sheriff Court 29 December 2010 and Miller v Sabre Insurance Company Limited [2010] CSOH 139.  In many delictual cases inconvenience would be subsumed within the solatium award, a recent example being Steel v McGill’s Bus Service Limited [2015] Rep LR 39, however, in the present case there was of course no solatium award.

[18]      He then directed my attention to Fife v Orr 1895 23R 8 where Lord McLaren observed that:  “Interdict is an extraordinary remedy almost always productive of great inconvenience”.  It was his position that interim interdict would often be productive of particular inconvenience because, as in the present case, the party interdicted may have had no indication that the interdict was coming.  The first defender according to his evidence was a breadwinner for his young family.  In this respect the interim interdict hit at the core of his life:  his ability to support his family.  After the termination of his employment with the second defenders he immediately required to seek work as a self‑employed person.  He spoke to the inconvenience of having to line up short term contracts, and the anxiety of not knowing whether or not he was going to have work in the future.  He also experienced the inconvenience associated with being a self‑employed person, namely:  of having to prepare accounts and tax returns.  These were inconveniences that some people choose, however, the first defender had not chosen these inconveniences.  They were forced upon him by the unlawful actions of the pursuer. 

[19]      Lastly counsel directed my attention to a number of authorities which he believed assisted in relation to the question of quantification of damages (see:  George Porteous Arts Limited v Regal Motors supra;  O’Carroll v Ryanair 2008 Rep LR 149;  Douglas and Others v Hello 2006 QB 125;  O’Neill v Tomlinson 2013 NIQB 97;  Abbey Forwarding Limited v Hone (No 3) 2013 3 WLR 1676 and Kinley v Devine [2014] CSOH 67. 

[20]      In referring me to the above case law counsel accepted that none of these authorities was directly in point. 

[21]      In summary, having regard to the factual background and the above case law, counsel submitted that an appropriate global award of damages was £15,000.  Interest he submitted should be allowed on the award at the rate of four per centum per annum from the date of the granting of the interim interdict to date.  I did not understand it to be disputed by the pursuer’s counsel that if the court were making an award in favour of the first defender that the foregoing was an appropriate approach to the question of interest. 

Reply on behalf of the pursuers
[22]      So far as the credibility and reliability of the first defender was concerned counsel merely said that this was a matter for the court in light of the evidence led.  He said nothing further regarding this issue.

[23]      He then turned to the issue of causation he first drew my attention to the first defender having left the pursuers’ employment voluntarily.  I cannot say that I understand the relevance of this point.  The acting of the first defender in leaving the pursuers’ employment predated the wrong (the wrongful obtaining of the interim interdict).  Accordingly it could have no relevance to the causal chain.  It could not in particular have breached the causal chain. 

[24]      Secondly it was submitted that the first defenders’ contract with the second defenders was only for a year.  Therefore there was no guarantee of his continued employment beyond that date and that in some unspecified way the causal chain was broken as a result of this. 

[25]      Again I had some difficulty in understanding this submission.  The evidence both written and oral regarding the first defender’s contract with the second defenders was a little unclear as to whether it was a contract for one year or was a permanent contract.  However, I do not believe that this point is of any importance in relation to the issues before me.  Whatever the position as to the length of the contract, what I believe to be important with respect to the issues before me was this:  the pursuer’s evidence was to the effect that all was going well with his employment with the second defenders until the granting of the interim interdict and his position was that he could see no reason, but for the granting of the interim interdict, why his employment with the second defenders should not have continued beyond the first year of his employment.  There was no evidence which contradicted this.  I had no difficulty in holding the first defender’s evidence relative to this matter both credible and reliable.  I will later detail the reasons why I found the first defender to be an entirely credible and reliable witness and accepted his evidence in its entirety. 

[26]      The next submission made by counsel was to this effect, merely because there was a finding that the interim interdict had been wrongfully obtained it did not automatically mean the first defender was entitled to damages and in support of this he referred to Aird v Tarbert School Board 1907 SC 305.  I had no difficulty in accepting that this submission correctly stated the law. 

[27]      I am satisfied that there is no substance in counsel’s submission that there was no causal connection between the wrong and the losses sustained by the first defender which I hereinafter find to be established.  These losses I am persuaded all flowed from the wrongful obtaining of the interim interdict.  The first defender needed to have the interim interdict recalled and inconvenience was caused to him by his having to instruct solicitors and counsel.  Secondly, the loss of his job and his income, which resulted directly from the wrong caused inconvenience stress and anxiety.  It directly caused him to have to seek to find other employment and in the end of the day he had to become self‑employed and thereafter become a limited company in order to ensure that he could go on working.  Anxiety and stress was caused to him by his urgently having to find a new source of income. 

[28]      Counsel’s submission, if I were not with him in respect of his primary position that there was no causal connection between the wrong and any loss, was this:  no losses under the various heads of damage had been proved. 

[29]      In elaboration of this secondary position he submitted that any inconvenience which had been shown was de minimis.  It was his position that in relation to anxiety and stress there had been a paucity of evidence.  In particular there had been no medical evidence supporting the first defender’s position. 

[30]      With respect to damage to reputation he submitted that there was only a very limited group of people who were aware of the interim interdict and again he submitted if there was any damage to reputation and it was his position that there was none that it was of a very minor nature.

Discussion
[31]      At the outset it is appropriate to observe that no argument was advanced on behalf of the pursuers that any of the various claims made on behalf of the first defender did not sound in damages.  Rather the argument was twofold:  (a) the first defender had not established a causal connection between the wrong and any losses he had sustained and (b) in any event no loss and damage had been established as flowing from the wrong and if any loss and damage had flowed then it was minimal in nature.  Moreover, counsel for the pursuers did not argue that in setting out the legal consequences of the wrongful obtaining of the interim interdict any of the propositions advanced by counsel for the first defenders was wrong in law.  I have approached this issue of loss, injury and damage against that background.

Causation
[32]      I am satisfied for the reasons earlier given that the first defender has established a causal link between the losses established and the wrong.  The but for test is clearly met.

Stress and anxiety
[33]      The only evidence on this came from the first defender himself and his position was that the obtaining of this interim interdict against him had been:  “very stressful” and had “caused a lot of stress and anxiety”.  He described in evidence his income (which he had lost when his employment was terminated) as vital to his family in order to pay the normal outgoings and in particular to pay his mortgage.  He described the damages claim of £50,000 as being such that if successful he would have been bankrupted and he would have lost his house. 

[34]      I had no difficulty in accepting the first defender’s evidence that the wrongful obtaining of the interim interdict had caused him significant stress and anxiety.

[35]      It is appropriate at this stage to deal with the issue of the first defender’s credibility.  There appeared given certain lines of cross‑examination which were followed by counsel for the pursuers with respect to the first defender that there was a challenge to his credibility, although as I have said no detailed submissions were made regarding this by counsel for the pursuers. 

[36]      In the course of cross‑examination the first defender was asked about his failure, when submitting papers for the preparation of his accounts to his accountant, to include five invoices which showed payments to him during the course of his period of self employment.  He was also asked about certain receipts which he had submitted in support of deductions from his income.  It was put to him (a) that he had failed to submit the invoices in order to lower his income (for tax purposes) and in addition to lower his income post the wrong in order to support his patrimonial loss claim in the instant action.  It was put to him that he was aware that certain sums he claimed as deductible expenses did not form proper deductions from his income for tax purposes. 

[37]      In evidence the first defender advised that his failure to submit the invoices was due to a mistake on his part and that his submitting of certain receipts was also a mistake on his part as to what was deductible and was due to his not understanding what was and was not deductible.  He explained he had just set up a business and this was the first time he had had to submit a personal tax assessment and prepare accounts.  I did not gain the impression he had deliberately acted to minimise his income, post the termination of his employment with the second defenders or deliberately sought to claim deductions he was not entitled to claim.  I believe he was telling the truth when he said he had made a mistake relative to the invoices and in relation to the deductibility of certain expenses.  He appeared to me to be somewhat naïve about financial and tax matters and thus had made mistakes.  He pointed out in evidence that following his first attempt to do a tax return and prepare accounts he had decided that he required an accountant and had had an accountant since then who has sorted out the question of the failure to declare income and the expenses situation.  I accepted the submission that he was an entirely straightforward witness.  I found the first defender to be generally an impressive witness.  I am persuaded that his evidence throughout, on all issues, rang true. 

[38]      It appeared to me that the first defender’s evidence on how stressful he had found these matters fitted in with the nature of the action.  As submitted on behalf of the first defender the action went to the core of the first defender’s life in that:   it rendered him unemployed;  as he pointed out in his evidence it made it difficult to work out what employment he could in fact do;  it damaged his ability to earn an income and in particular damaged his ability to support his wife and young family and to pay the normal household bills;  and it generally made his life uncertain (although through his self employment he was able to obtain an income for most of the period following the termination of his employment with the second defenders).   Further the interim interdict was in place for some time.  Against that background it seemed to me wholly unsurprising that this had caused him significant stress and anxiety.  The obtaining of the interim interdict, I am satisfied would as the first defender said be very stressful.

[39]      Lastly with respect to the issue of stress and anxiety I observe there was:  (1) no medical evidence to the effect that the first defender’s health had been affected to any extent by the stress and anxiety which he has sustained.  The first defender did not in his evidence say at any point that there had been any specific effects on his health and (2) in addition there was no detailed evidence from the first defender as to whether there were any particular ways this stress and anxiety had manifested itself such as sleeplessness;  ill‑temper;  not eating properly, headaches or similar. 

[40]      In the absence of such evidence I simply have to proceed in assessing damages under this head on the basis of the first defender’s position, namely:  that he found the matter very stressful and have regard to the period during which the wrong continued.

[41]      It appears to me generally that this lack of detailed evidence as to any specific effects regarding the first defender’s health caused by the anxiety and stress must be a factor which limits the amount of damages that can be awarded under this head. 

Inconvenience
[42]      The first defender’s evidence regarding this was that he had as a result of the granting of the interim interdict urgently had had to consult his solicitor and had required to do so on over 50 occasions.  In addition he had had to come to Edinburgh to consult with counsel on about four or five occasions.  Beyond that he had lost his job with the second defenders.   Thereafter he urgently had to find other employment and this had resulted in him having to become self‑employed and thereafter to form a limited company in order to earn an income.  Prior to this point he had never been self‑employed.  He had had to start keeping his own business records, prepare his own tax return and seek to do all the things necessary in order to run a business of his own.  All of these things he had had to do these as a result of the wrong.  But for the wrong he would not have had this inconvenience. 

[43]      Having to do these various things over the period of the wrong I am persuaded amounts to a significant degree of inconvenience.

Damage to reputation
[44]      The evidence on this came from the first defender who said that his reputation had been damaged in the eyes of the second defenders who had ended up terminating his employment. 

[45]      It was also argued on his behalf that his reputation had been damaged in the eyes of the various persons within (a) the pursuers and (b) Taylor Wimpey who had become aware of the terms of the interim interdict.

[46]      Overall I am of the view that only minor damage has been done to the first defender’s reputation.  I note that:

• The allegations made against him were not of criminal conduct but related to breach of contract.
• The allegations were not publicised in the media and on the internet.Rather those who were aware of the allegations were very limited in number.
• No evidence was provided that the first defender had not been able to obtain any employment or had lost any contract as a result of any damage to his reputation.
• The general impression which I formed from the evidence was that the first defender since he had become self‑employed and then incorporated his business had done reasonably well (at no point was the claim for patrimonial loss on the part of the first defender a significant one).This strongly suggested there had been no significant damage to his reputation.Overall I believe any damage to his reputation against that background could not be said to be of significance.Knowledge of the wrongly obtained interim interdict was confined to a very limited group of people.

Summary
[47]      For the foregoing reasons I hold that there was loss injury and damage under each of the heads of damages claimed.  In general terms the level of damage under each head was as set out above. 

Quantification of damages
[48]      I was referred to a number of authorities on behalf of the first defender.  I was not referred to any authorities on behalf of the pursuers.  I did not find the authorities to which I was referred of particular assistance in seeking to assess the appropriate level of damages in this case.  The circumstances in each of the cases to which I was referred I find to be very different from those presented in the instant case. 

[49]      I accept that generally the purpose of an award of damages is to put the wronged party in the position they would have been if they had not suffered the wrong complained of (see:  O’Neill v Tomlinson).

[50]      In assessing damages I have had regard to the observations of McCombe LJ in Abbey Forwarding Limited v Hone (No 3) at paragraph 129 where he said that the court should not award modest or generous damages, but realistic compensation for what has occurred. 

[51]      In addition I have had regard to the various cases to which I was referred as setting a broad band within which I believe the award in this case must fall. 

[52]      In the whole circumstances having regard to the foregoing I believe that an appropriate award would be £8,000.  I am unable to ascribe particular sums to each head of damage.  Given the lack of awards in similar cases and given the inter relationship between the various heads of damage it is I believe not possible to apportion damages under each head.  Having regard to all of the circumstances of the case I felt that I had to take a fairly broad approach to the assessment of damages.

Interest
[53]      With respect to interest I have followed the submission made on behalf of the first defender and I calculate interest to date to be £730.

Decision
[54]      For the above reasons I award the first defender the sum of £8,730 inclusive of interest to date.  I was not addressed on the issue of expense and I reserve my decision in relation to that matter.