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ROBERT MALLINSON (AP) v. ETHICON LIMITED and ARTHUR MACKAY (ELECTRICAL CONTRACTORS) LTD [1999] ScotSC 7 (6th April, 1999)

A4844/97

JUDGMENT OF SHERIFF PRINCIPAL

NICHOLSON QC

in the cause

ROBERT MALLINSON (A.P.)

Pursuer

against

ETHICON LIMITED

First Defenders

and

ARTHUR MACKAY (ELECTRICAL CONTRACTORS) LIMITED

Second Defenders

Act: Macmillan; Nelsons

Alt (for both defenders): Russell, Simpson and Marwick, WS

EDINBURGH, 6 April 1999

The Sheriff Principal, having resumed consideration of the cause, allows the appeal and recalls the interlocutor of 15 May 1998 complained of; in terms of the minute of abandonment, no. 15 of process, assoilzies the first defenders from the craves of the writ; finds the pursuer liable to the first defenders in the expenses of the cause up to and including 15 May 1998; allows an account thereof to be given in and remits the same, when lodged, to the Auditor of Court to tax and to report; in terms of section 18(2) of the Legal Aid (Scotland) Act 1986 modifies to nil the pursuer's liability in respect of the foregoing award of expenses; finds no expenses due to or by the pursuer and the first defenders in respect of the appeal; of new closes the record and allows to the pursuer and the second defenders a proof of their respective averments; appoints said proof to proceed on a date to be fixed.

NOTE:

This is an appeal in an action in which the pursuer seeks an award of damages in respect of injuries which he sustained on 26 November 1996 in the course of his employment with the first defenders. It appears that he was struck by some collapsing scaffolding while making his way from one part of the first defenders' premises to another. It also now appears that that scaffolding had been erected, and was being dismantled, by employees of the second defenders who at the material time were engaged in installing new power supplies in the first defenders' premises.

Following on sundry correspondence between the pursuer's solicitors and the defenders and their insurers (to some of which I shall refer in more detail later) the present action was raised against both defenders in December 1997. Defences were ordered in the normal way, and an options hearing was fixed for 17 April 1998. That options hearing was continued to 15 May 1998 and on that date an interlocutor was pronounced which is the subject of the present appeal.

Exactly what happened on that date is unclear, and the subject of some dispute. It does appear, however, that by that date the pursuer's advisers had come to the conclusion that the action, in so far as directed against the first defenders, was misconceived. Accordingly, the decision was taken that the action should not proceed any further against those defenders. What happened, however, was that the pursuer did not lodge a minute of abandonment, as might have been normal in such circumstances. Instead, his solicitor sought leave to lodge at the bar a minute of amendment which effectively sought to remove the first defenders from the crave of the writ. The solicitor for the pursuer maintained at the appeal that that minute of amendment had been supplemented by an oral motion to allow abandonment of the action in respect of the first defenders, and that that mode of proceeding had been agreed to by the solicitor who was at that date representing the first defenders. However, Mr Russell, who represented the first defenders at the appeal hearing, did not accept that abandonment as such had been mentioned on 15 May 1998, far less that his colleague had agreed to it being sought by means of a minute of amendment. Furthermore, it is not mentioned either in the interlocutor which was pronounced on that date nor in the Note which was ultimately written by the sheriff after the present appeal had been marked.

In the circumstances the interlocutor which was pronounced, and signed, on 15 May 1998 is quite extraordinary. It is in the following terms:

"The Sheriff, on pursuer's motion, dismisses the first defender [sic] from the crave of the writ and modifies the expenses of the pursuer to nil; in respect of the second defender [sic] closes the record; allows parties a proof of their respective averments; assigns [a date for the proof]".

As can be seen, the foregoing interlocutor makes no mention of a minute of amendment, and in particular, does not allow the pleadings to be amended in terms of the minute which appears to have been tendered at the Bar; it makes no mention of abandonment; it purports to dismiss the first defenders from the crave of the writ rather than, even if it was appropriate, dismissing the action against those defenders; it ignores the fact that the writ contains two craves rather than a single crave; and it makes no finding of liability for expenses but simply contains the meaningless words "modifies the expenses of the pursuer to nil". In my opinion this interlocutor is so glaringly defective that it is remarkable that the sheriff concerned actually signed it, and it must therefore be assumed that, for some reason that is not explained, she simply did not read it before doing so.

Be that as it may, it was clear from the outset of the appeal hearing that both parties (by which I mean the pursuer and the first defenders, since the second defenders did not consider it necessary to have individual representation, though their interests were nominally represented by Mr Russell) were of the view that the interlocutor of 15 May 1998 could not possibly stand in its present terms. Consequently, the primary question at the appeal hearing was what would be the best way of resolving the problem created by that interlocutor.

Given the common agreement that something had to be done I took the view that, at least so far as that part of the appeal hearing was concerned, I could properly be fairly interventionist in the discussion. The result of all of that was that the solicitor for the pursuer, very properly in my view, conceded that the appeal should be allowed with the interlocutor of 15 May 1998 being recalled. He also came to the conclusion, again properly in my view, that the appropriate way to proceed was for him at that stage to lodge a formal minute of abandonment. Accordingly, during a short adjournment a minute was drafted, and I subsequently allowed it to be lodged as number 15 of process.

For reasons which will become clear shortly I think that it is appropriate to quote the terms of the minute of abandonment. They are as follows:

"Macmillan for the pursuer stated and hereby states to the Court that the pursuer offers to abandon the cause against the first defenders only and consents to decree of absolvitor in favour of the first defenders in terms of rule 23.1(1)(a) of the Ordinary Cause Rules".

Once the foregoing minute had been received and lodged the discussion at the hearing turned to the consequences in respect of liability for expenses which should flow from the abandonment of the action against the first defenders. In that connection it was a matter of agreement that, since the interlocutor of 15 May 1998 was to be recalled, and since there was now before me a minute of abandonment, the whole question of expenses was at large for me.

On that matter Mr Russell, for the first defenders, submitted that the whole expenses, including the expenses of the appeal, should be awarded in favour of the defenders. That, he submitted, would be in accordance with the normal rule that a party who abandons an action must bear responsibility for the other party's expenses. He went on, however, to deal with an argument which, as appears from the sheriff's note, was advanced before her though, as already noted, it is not reflected in the interlocutor of 15 May 1998. That argument was founded on a letter dated 28 November 1996 written by a director of the second defenders and sent to the first defenders. The letter must have been written only some two days after the accident to the pursuer, and in it the director of the second defenders says, inter alia:

"We regret that we have to confirm that one of our operatives was involved in an accident within your Bankhead Crossway premises on 26 November 1996. Our electrician and apprentice had dismantled a scaffold to its final stage after installation work had been completed. The electrician then attempted to dismantle the final stage by himself. This resulted in one of the end frames twisting within its restraining poles which then struck one of your employees who was standing beside the scaffold. This accident could have been avoided by continuing to dismantle the scaffold using two men instead of one and we enclose a memo that we have issued to our staff reminding them of the requirements to carry out this procedure in this way."

Both before the sheriff and before myself the solicitor for the pursuer submitted that the foregoing letter amounted to, or at least came very close to, an admission on the part of the second defenders that they were wholly to blame for the accident; but, it was submitted, the first defenders had not made the contents of that letter known to the pursuer. Had they done so, it was submitted, the pursuer would never have sued the first defenders since he would have known from the outset that such an action would be directed against the wrong defenders. In that situation, it was submitted, the normal rule favouring an award of expenses against a party abandoning an action should be departed from. The solicitor for the pursuer did not go so far as to submit that the first defenders should be liable in expenses, but he did submit that no liability for expenses should fall on the pursuer.

In response on this point Mr Russell accepted that the letter of 28 November 1996 had not been made known to the pursuer or his advisers. He submitted, however, that there had been no duty on the first defenders to do so, and he went on to submit that in any event the position of the second defenders in relation to the accident had been made known to the pursuer well in advance of the raising of the action. In that connection he referred to a letter, apparently dated 3 July 1997 (that is to say some five months before the raising of the action), from the first defenders' insurers to the pursuer's solicitors. That letter is no. 6/2/2 of process, and in it the insurers state that they have now completed their enquiries into the circumstances surrounding the accident. They go on:

"From these enquiries it is quite clear that this accident was not caused by the negligence of our insured but rather a contractor who was working within our insured's premises, namely Arthur McKay Ltd., Electrical Contractors, 7/13 Arthur Street, Edinburgh EH6 5DA, and we should therefore be obliged if you would kindly intimate your client's claim against that company."

It was submitted that the foregoing letter gave the pursuer's advisers ample and adequate notice that any proceedings should be directed only against Arthur McKay Ltd and not against the first defenders. It was also submitted, by reference to Bookless Bros. v. Gudmundsson, 1921 SC 602 and Haggerty v. Nisbet, 1933 SLT 188, that courts will be slow to depart from the normal rule regarding expenses on abandonment unless it can be shown that the party against whom a claim has been abandoned effectively encouraged, or even misled, the other party into bringing the proceedings in question.

In the present case I came to the conclusion that there had been no duty on the first defenders to disclose the terms of the letter of 28 November 1996 to the pursuer; and in any event the later letter from their insurers to the pursuer's solicitors appeared to me to give appropriate and timeous notice to the pursuer of the position of the second defenders. All of that, in my view, fell well short of the kind of situation described in the two cases to which I have just referred with the consequence that it could not possibly be said that the first defenders had somehow misled the pursuer into thinking that an action should be directed against them. In that situation I therefore reached the conclusion that the normal rule should apply at least up to the date of the interlocutor appealed against, namely 15 May 1998, with the consequence that the pursuer should be found liable to the first defenders in the expenses of process up to that date. I also took the view, however, that the expenses of the subsequent appeal should be dealt with differently. While it was true that the pursuer may be open to criticism for not having followed the normal procedure of lodging a minute of abandonment, it also had to be recognised that the necessity for the appeal had arisen in large measure because the interlocutor of 15 May 1998 was so defective that it simply could not stand. Accordingly, I concluded that no expenses should be due to or by either party in respect of the appeal.

After I had pronounced my decision on the foregoing matters Mr Macmillan, for the pursuer, then proceeded to invite me to modify the pursuer's liability in respect of the expenses which I had awarded to the first defenders in terms of section 18(2) of the Legal Aid (Scotland) Act 1986. He advised me that the pursuer has been unfit for work since the date of the accident, and is of very limited means. In that situation he submitted that I should modify the pursuer's liability to nil.

In response Mr Russell proceeded to advance an argument which appeared only to have occurred to him at that point and which, were it to be sustained, would have rendered abortive all of the earlier submissions regarding liability for the expenses leading up to the abandonment of the action against the first defenders. In fairness to Mr Russell I should add that he frankly conceded that this was a wholly new argument, and for that reason he advanced it, at least initially, with some diffidence. I indicated to him, however, that I was prepared to entertain a new argument, even if it nullified some of the earlier arguments, since it is always desirable to try to reach a correct and just conclusion on any matter in dispute.

Thus emboldened, Mr Russell proceeded to present his new submission. He began by observing that, at the point when the minute of abandonment had been lodged in the course of the appeal hearing, he had never in terms moved me to grant decree of absolvitor in favour of the first defenders. In that situation, he submitted, matters should not have proceeded as if there had been a decree of absolvitor (which would properly have led to a consideration of liability for expenses). Instead, matters should have proceeded in accordance with the terms of OCR, rule 23.1(1)(b), (2) and (3), whereby the pursuer would require to pay to the first defenders full judicial expenses within 28 days of taxation subject to the condition that, if those expenses were so paid, the pursuer would then obtain a decree of dismissal but, if they were not so paid, the defenders would obtain decree of absolvitor. I understood that the foregoing submission was advanced in order to avoid the possibility of modification of the pursuer's liability in expenses, a possibility which, of course, arose where there had been an actual award of expenses. In that connection Mr Russell also referred to the cases of Collum v. Glasgow Corporation 1964 SLT 199 and Johnston v. Johnston 1985 SLT 510 as authority for the proposition that, where the procedure under what is now rule 23.1(2) and (3) is set in motion, there is at that stage no award of expenses with the consequence that the court can have no jurisdiction to assess actual liability for expenses under what is now section 18(2) of the Legal Aid (Scotland) Act.

The foregoing submissions are ingenious and quite novel, not least on account of the fact that they turn around the normally received wisdom that a decree of dismissal is a benefit which an abandoning pursuer may receive on the fulfilment of certain conditions as to the payment of expenses, and replace that with a new wisdom to the effect that a decree of dismissal may actually be to the benefit of the party against whom an action has been abandoned. However, I have come to the conclusion that Mr Russell's submissions on this point are unsound and fall to be rejected. My reasons for coming to that conclusion flow from what I regard as the proper construction of the terms of Chapter 23 of the Ordinary Cause Rules, and from some historical analysis of the origins of those rules.

It is appropriate that I should begin by stating the rules themselves in full. They are:

"Abandonment of causes

23.1 (1) A pursuer may abandon a cause at any time before decree of absolvitor or dismissal by lodging a minute of abandonment and -

(a) consenting to decree of absolvitor; or

(b) seeking decree of dismissal.

(2) The sheriff shall not grant decree of dismissal under paragraph (1)(b) unless full judicial expenses have been paid to the defender, and any third party against whom he has directed any crave, within 28 days after the date of taxation.

(3) If the pursuer fails to pay the expenses referred to in paragraph (2) to the party to whom they are due within the period specified in that paragraph, that party shall be entitled to decree of absolvitor with expenses."

The foregoing rules are in almost identical terms to rule 29.1 of the current Rules of the Court of Session and, as is explained in the commentary to that rule in the Parliament House Book (page C214 et seq), the current rules, both in the Court of Session and in the sheriff courts, effectively replace what used to be known as abandonment at common law (which resulted in a decree of absolvitor) and abandonment "under the statute" which could result in decree of dismissal provided that expenses were paid within a prescribed time. The "statute" in question was the Act of 1825 sometimes referred to as the Judicature Act, and sometimes referred to as the Court of Session Act. It was the Act which, as subsequently amended, was under consideration in the cases of Collum and Johnston to which I have referred earlier.

For present purposes it is unnecessary to consider whether the modern provisions in the rules have completely replaced the former practice of abandonment at common law since the minute of abandonment in this case (which I have quoted in full earlier) expressly refers to paragraph (1)(a) of rule 23.1. In that minute the pursuer expressly "consents to decree of absolvitor in favour of the first defenders", and accordingly the first question which falls to be determined is whether, in that situation, it is necessary for the defenders in question to move in terms for absolvitor, or whether absolvitor will follow as a matter of course regardless of any motion made, or not made, by the defenders. To put that in a slightly different way, the question is whether, if no motion for decree of absolvitor is made by the defenders, it inevitably follows, as was suggested by Mr Russell in the present case, that there can be no decree of absolvitor, and that the pursuers must follow the prescribed procedure which will result in decree of dismissal if taxed expenses are paid within the prescribed time limit, or in decree of absolvitor if that is not done.

So far as the foregoing questions are concerned I am in no doubt that the words of rule 23.1(1) offer two alternatives to a pursuer (but not to a defender). A pursuer who wishes to abandon a cause may either consent to decree of absolvitor or he may seek a decree of dismissal. The distinction between the words "consenting to" and "seeking", as used in the rule, indicate in my opinion that, if a pursuer follows the first option, a decree of absolvitor will follow regardless of whether or not that is expressly moved for by the defender concerned. By contrast, if a pursuer lodges a minute of abandonment "seeking decree of dismissal", such a decree will not follow automatically but will only be granted if the conditions for the grant of such a decree, as set out in the rules, have been satisfied. In the present case, accordingly, I do not consider, given the terms of the actual minute of abandonment, that it was open to Mr Russell to submit that the pursuer is obliged to follow the procedure which might result in a decree of dismissal simply on account of the fact that he (Mr Russell) did not in terms move for absolvitor following on the lodging of the pursuer's minute.

Turning, briefly, to the other matters raised by Mr Russell in this connection, I should say that I do not have difficulty with the decisions in the cases of Collum and Johnston. I respectfully agree that they were correctly decided, and I have little doubt that, if a pursuer were to embark on the procedure which is now enshrined in paragraphs (2) and (3) of rule 23.1, a similar view would require to be taken were that pursuer at that point to seek modification of any liability for expenses under section 18(2) of the 1986 Act since that section, like its predecessors, still refers to liability "under an award of expenses". For the reasons given by, respectively, Lord Fraser and Lord Cowie I entirely accept that there is no "award of expenses" where a pursuer is proceeding under what is now paragraphs (2) and (3) of rule 23.1.

However, I note that, in the Collum case, Lord Fraser carefully states (at p. 201) that he had no jurisdiction to make any assessment of the pursuer's liability in expenses "at this stage", which appears to suggest that his Lordship had in mind that such an assessment might become competent at some later stage. In my opinion Lord Fraser's qualification must have arisen, at least in part, from a consideration of what are now the closing words of rule 23.1(3). That paragraph of rule 23.1 provides that, if a pursuer fails to comply with the condition regarding payment of expenses within 28 days, he will not be entitled to decree of dismissal but instead the other party will be entitled to decree of absolvitor with expenses (my emphasis). I am in no doubt that the consequence of that provision is that, if a decree of absolvitor with expenses is granted in such circumstances, and the party against whom such a decree is granted is legally aided, he will be entitled at that stage to seek modification in terms of section 18(2) of the 1986 Act. That, I feel confident, is what Lord Fraser must have had in mind when he used the words "at this stage" in the passage in his opinion to which I have referred.

What all of that means, of course, is that a defender cannot be secure from the possibility that a pursuer's liability for expenses may be modified by reason only of a pursuer choosing (or, as Mr Russell suggested, being forced) to adopt the procedure which may result in a decree of dismissal. On the contrary, the possibility of modification is just as likely to arise if a pursuer fails to satisfy the conditions for a decree of dismissal with the consequence that a decree of absolvitor "with expenses" is then granted. The foregoing considerations appear to me to offer a further reason for not adopting the late submission advanced by Mr Russell.

There is one further matter which I should mention in this connection. Just after taking this appeal to avizandum I noticed in Green's Weekly Digest a brief report of a case in the Inner House dealing with questions regarding abandonment. That was the case of Anthony v. Anthony 1999 GWD 12-531. As it happened, Mr Russell thereafter sent me a copy of the full judgment in that case with a covering letter indicating that a copy had also been sent to the pursuer's solicitors. As I understand it the main question in that case was whether the pursuer had effectively abandoned his action by virtue of clearly expressed letters sent to the sheriff clerk, but without a formal minute of abandonment. The case does not appear to have any bearing on the matters which I have just been considering, and accordingly I do not consider that it should affect my decision, nor do I consider that it calls for any further hearing of the present appeal.

That being so, and for the reasons which I have already given, I consider that Mr Russell's belated challenge of the pursuer's abandonment, with consequential absolvitor in favour of the first defenders, is unsound, and falls to be rejected. It therefore follows that I must now return to the question of whether or not the pursuer's liability to the first defenders in expenses should be modified.

So far as that is concerned, it seems to me that the pursuer's present means are such as to justify modification of his liability to nil. However, at the appeal hearing some consideration was given to the question whether account should be taken of the fact that the pursuer may receive an award of damages from the second defenders with, as a result, an increase in his available means so as to enable him to meet some or all of the expenses due to the first defenders. Section 18(2) of the 1986 Act enjoins the court which is considering a legally aided person's liability in relation to an award of expenses to have "regard to all the circumstances including the means of all the parties"; and it is certainly arguable that that permits account to be taken of some future event which appears likely to have a significant effect on the means of one of the parties. In the present case the pursuer is seeking a sum of �100,000 as damages, though I was advised that any actual award may be significantly lower than that.

Consideration was also given, however, to section 20(4) of the Act, which provides:

"It shall be competent, at any time within such period after the making of an award of expenses to which section 18(2) of this Act applies as may be prescribed by regulations made under this section, for any party concerned with the award to apply to the court or tribunal which made the award for the re-assessment of its amount, on the ground that since the award was made there has been a relevant change of circumstances, and on such application the court or tribunal may make such re-assessment of the amount of the award as seems to them proper."

The "period" referred to in the foregoing provision is one year after the making of the award of expenses (Civil Legal Aid (Scotland) Regulations 1996, para. 38).

Given what is contained in the foregoing provisions, and given that the pursuer's claim against the second defenders is likely to be determined within a year, it seems to me that two alternative courses are open to me in this case. Either I could determine the matter of the pursuer's liability by reference to a possible enhancement of his means as a consequence of securing an award of damages from the second defenders with it then being open to him to make application under section 20(4) if that award were to be very small; or alternatively I could determine his liability on the basis of his current means with it being open to the first defenders to make application under the subsection if any subsequent award of damages appeared to justify a re-assessment at that stage.

In weighing up those alternatives I think that is appropriate to be mindful of the fact that both the actuality and the amount of any award of damages are always very uncertain. Taking that into account along with the fact that the pursuer's current means are undoubtedly very modest, I am of the view that the proper course for me to take at this stage is to address the matter of modification without reference to any award of damages which might ultimately be made in favour of the pursuer. I have accordingly modified to nil the pursuer's liability to the first defenders in respect of the award of expenses in their favour.

On the whole matter, therefore, I have allowed the appeal and have recalled the interlocutor of 15 May 1998; in terms of the minute of abandonment, no. 15 of process, I have assoilzied the first defenders from the craves of the writ; I have found the pursuer liable to the first defenders in the expenses of the cause but I have modified to nil the pursuer's liability in respect of that award of expenses in terms of section 18(2) of the Legal Aid (Scotland) Act 1986; and I have found no expenses due to or by either party in respect of the appeal. While that disposes of the case so far as the first defenders are concerned, the pursuer's action against the second defenders remains a live matter. In the interlocutor of 15 May 1998 a proof was allowed in respect of that action, with a date (which was of course subsequently abortive on account of the appeal) being assigned for that proof to take place. It was not suggested to me that the foregoing parts of the interlocutor of 15 May 1998 should not now be repeated, and accordingly I have of new closed the record and have allowed to the pursuer and the second defenders a proof of their respective averments. I have appointed that proof to proceed on a date to be fixed.