Scottish Sheriff Court Decisions

in the cause

against

MICHAEL COUTTS..............

..............................Defender

(A475/98)

The Sheriff, having resumed consideration of the cause and the preliminary proof, Sustains the third plea-in-law for the Defender and Assoilzies the Defender from the craves of the Writ; Reserves meantime the question of expenses and Appoints parties to be heard thereon on a date to be afterwards fixed.

The issue raised in this preliminary proof is whether the Defender is entitled to have his third plea-in-law, a plea of res judicata, sustained by the court. I did not require to hear evidence at the proof because the parties were agreed that the only relevant facts were those matters which were agreed on Record and which were the subject of the Joint Minute of Admissions (No. 13 of Process). These facts were as follows -

1. The Pursuer resides at Backgreens Farmhouse, Oldmeldrum, Inverurie, Aberdeenshire. The Defender formerly resided at Mill of Allathan, New Deer and now resides at Flat 24, The Auld Mill, Station Road, Turriff and is domiciled there.
2. The Pursuer seeks reparation for the loss and damage sustained by him through the Defender's negligence. The harmful event giving rise to the claim occurred on the B9029 road near Maud, Aberdeenshire. This court accordingly has jurisdiction.
3. There are no proceedings pending in any other court in respect of the subject matter hereof. No agreement exists between the parties prorogating jurisdiction of this matter to another court.
4. On or about 5^th March 1996 the Pursuer was driving his Yamaha motorcyle registration number, K991 PKR on the B9029 Maud to New Deer road, Aberdeenshire. The Pursuer had a Miss Louise Bannerman as a pillion passenger on his said motorcycle.
5. The Defender was driving a Ford tractor registration number, E991 FKS along the Maud to New Deer road in the same direction. The front offside wheel of the said tractor collided with the nearside of the Pursuer's motorcycle and the Pursuer's left leg.
6. The Pursuer's motorcycle was deflected and the Pursuer could not control it. The motorcycle collided with an electricity pole. The Pursuer was thrown through a barbed wire fence and Miss Bannerman was thrown on to the grass verge.
7. As a result of the said accident the Pursuer sustained loss and damage. He sustained personal injury to his left leg and shoulder.
8. On or around 4^th December 1996 proceedings were raised in this court by the present Pursuer against the present Defender under court reference A519/96 in respect of damage allegedly sustained by the Pursuer as a result of the same harmful event giving rise to the present action, being a road traffic accident on 5^th March 1996.
9. Following upon a Minute of Tender (No. 6/1/2 of Process herein) and Minute of Acceptance thereof (No. 6/1/3 of Process herein) decree in foro was granted in the case A519/96 on 9^th May 1997 for payment by the Defender to the Pursuer of the sum of £3,000.00 together with the taxed expenses of Process.
10. The subject matter of the action A519/96 was loss allegedly sustained by the present Pursuer as a result of the present Defender's fault and negligence resulting in the said road traffic accident.
11. The subject matter of the present action is loss allegedly sustained by the Pursuer as a result of the Defender's fault and negligence resulting in the said road traffic accident.
12. The Process in the action A519/96 is number 6/1/1 of Process in this action and includes an Open Record and said Minutes of Tender and Acceptance.
13. When the Pursuer pursued the action A519/96 he did so by reason of his insurers acting under their subrogated rights in terms of his policy of insurance with them.

Mr Kemp, for the Defender explained that in the present action the Pursuer was making a claim in respect of the uninsured parts of his losses, the details of which were set out in article 5 of condescendence. He drew attention to the Open Record in the earlier action 519/96 (No. 6/1/1 of Process) and observed that the parties were the same as in the present action and that reference was made to the same accident. The pleas-in-law for the Pursuer in each action were in identical terms. Decree was granted in favour of the Pursuer on 9^th May 1997 in terms of a Minute of Tender for the Defender (6/1/2 of Process) and a Minute of Acceptance of Tender (6/1/3 of Process). So in simple terms there was a first action settled by a Tender procedure and after that the present action was raised by the Pursuer arising out of the same accident seeking to recover additional sums. Mr Kemp submitted that the second action, that is to say the present action, was incompetent because it was subject to the principle of res judicata.

Mr Kemp made reference to two competing Sheriff Court decisions upon this topic. The first was McSheehy v MacMillan 1993 SLT (Sh. Ct.) 10; 1992 SCLR 603. This was a decision of Sheriff Lockhart at Glasgow on 29^th August 1991 in which he repelled the Defender's plea of res judicata. The second was McPhee v Heatherwick 1977 SLT (Sh. Ct.) 46. This was a decision of Sheriff Macphail at Glasgow on 1^st July 1976 in which he sustained the Defender's plea of res judicata. Mr Kemp submitted that McSheehy was wrongly decided and that in reaching his decision Sheriff Lockhart had failed to appreciate that the decision of the Inner House of the Court of Session in Stevenson v Pontifex & Wood 1887 15R 125 was binding upon him. Mr Kemp said that Stevenson was also binding upon me. He referred to the following passage from the opinion of the Lord President at page 129 of the report - "The cause of action in the previous summons was breach of contract and consequent damage. The breach consisted of the single act of supplying one machine to Verel & Company, and I am of opinion that a single act amounting either to a delict or a breach of contract cannot be made the ground of two or more actions, for the purpose of recovering damages arising within different periods but caused by the same act. On the contrary, I hold the true rule of practice based on sound principle to be, that though the delict or breach of contract be of such a nature that it will necessarily be followed by injurious consequences in the future, and though it may for this reason be impossible to ascertain with precise accuracy at the date of the action or of the verdict the amount of loss which will result, yet the whole damage must be recovered in one action, because there is but one cause of action. The most familiar illustration of this rule is to be found in actions for injury to the person, in which the practice is invariable." He also made reference to the following comments of the Lord President a little further on in his opinion - "I should hardly have thought it necessary to state these rules and principles, which are somewhat elementary, were it not that the present is the first example as far as I know of any attempt, at least in modern times, to recover by instalments in successive actions the continuing damage resulting from one delict or one breach of contract." Mr Kemp also founded upon the opinions of Lord Mure and Lord Adam. He said that the opinions of all three judges were clear and direct and that Sheriff Lockhart had erred in declining to apply the court's reasoning in the case which he had to consider.

Mr Kemp commended the decision of Sheriff Macphail in McPhee. That case was correctly decided and if I did not consider that I was bound by the decision in Stevenson I should prefer the reasoning of Sheriff Macphail to that of Sheriff Lockhart. Reference was also made to a number of cases which Mr Kemp maintained were in support of his argument. These were -

Mr Kemp said that Steven v Broady Norman & Company Ltd 1928 SLT 290 was not of assistance in the present case because it was concerned with a quite different situation where a Pursuer first sued a company owning a particular vehicle and then brought an action against the driver of that vehicle.

It was submitted that courts should not encourage a multiplicity of suits and that Sheriff Lockhart had reached the decision he did in McSheehy because he felt compelled to bring about a result which he considered to be fair to the Pursuer. But it was equally important that Defenders should not be vexed by more than one action arising from the same accident. If at the time of the first action there was a possibility of further suits the Defender would never know when his liability might come to an end.

In conclusion Mr Kemp invited me to sustain the Defender's third plea-in-law and Grant Decree of absolvitor.

Mr Wilson, for the Pursuer, accepted that in this action the Pursuer was suing in respect of other uninsured losses arising out of the same accident as was the subject of the first action. In the first action, which was brought to recover insured losses, the Pursuer was proceeding by reason of his insurers acting under their subrogated rights in terms of his policy of insurance with them.

Mr Wilson did not accept that Stevenson was binding upon me. He said that the decisions relied upon by Mr Kemp related to a general principle that litigation should be final but did not address the particular circumstances which existed in this case. It was submitted that although there were two actions arising from the same incident there were separate heads of claim in each because the first action was brought in respect of insured losses and the second in respect of uninsured losses. I was invited to follow the decision of Sheriff Lockhart in McSheehy. Mr Wilson submitted that in the first action the real Pursuer was the insurance company and the Pursuer quite simply had no say and no control over the decision to bring that action.

I was referred to the decision of the Court of Appeal in Taylor v O.Wray & Company Ltd 1971 1 Lloyds Law Reports 497. That was a persuasive authority, said Mr Wilson, and was an example of a situation where a second action was not barred.

Mr Wilson pointed out that none of the older authorities referred to by Mr Kemp dealt with the involvement of insurance companies. They were cases where there was no suggestion that the parties were doing anything other than suing in their own right. The present case was on all fours with McSheehy, said Mr Wilson, apart from the circumstance that in McSheehy the Pursuers action, which was truly brought in his own right in respect of his uninsured losses, came first. It was argued that if there were no binding authorities requiring me to find in favour of the Defender I should have regard to considerations of equity. Fairness demanded that the action should be allowed to proceed. It would not be vexatious to allow it to do so but the Pursuer would be unfairly prejudiced if judgment was given in favour of the Defender. Mr Wilson asked me to repel the Defender's third plea-in-law and to allow a proof. He also suggested, with no great enthusiasm, that if I was not entirely persuaded by his submissions I could allow proof before answer.

During Mr Wilson's submissions I pointed out that it was unfortunate that he had only been able to produce a brief edited report of the decision in Taylor and he replied that he had only discovered the existence of the authority the day before the hearing. In the circumstances he asked me to continue the hearing in order to allow him to produce the full report of the case. I indicated that I would hear Mr Kemp in reply before deciding whether or not to grant his motion.

Mr Kemp replied that it seemed to him that since Taylor was an English case there was a risk that it might be of limited assistance in determining an issue arising out of the application of the Scottish principle of res judicata. He opposed the Pursuer's motion to continue but I felt that since the case had been referred to it would be inappropriate to dispose of the argument without considering the full report and without giving the parties an opportunity to address me upon the significance of what the judges in the Court of Appeal had said. Accordingly, I granted Mr Wilson's motion.

At the continued hearing Mr Wilson submitted that the decision in Taylor was of assistance in the present case. He referred, in particular, to what Harman L J said towards the foot of the first column on page 499. The judge had there quoted the head-note in Brunsden v Humphrey (1884) 14QBD 141 which was in the following terms - "Damage to goods and injury to the person, although they have been occasioned by one and the same wrongful act, are infringements of different rights, and give rise to distinct causes of action; and therefore the recovery in an action of compensation for the damage to the goods is no bar to an action subsequently commenced for the injury to the person." Mr Wilson accepted that in England the relevant rule of law was different from res judicata but submitted that the general principle stated in Brunsden could be applied to the facts of the present case. In this case the Pursuer was suing principally for losses arising out of personal injuries. He did have a very small claim referred to in article 5 of condescendence in respect of damage to his clothing and helmet and so on and that part of his claim, it was conceded, might well have to be struck out. But the plea of res judicata ought not to bar the personal injury claim.

Mr Kemp emphasised that English authorities had to be considered with caution. Practice and procedure was different south of the border. However, when the decision in Taylor was scrutinised carefully it was clear that it actually supported the argument for the Defender in the present case. That was because the decision proceeded upon the basis of what had been agreed between the parties in the first action under the English procedure of payment into court. Mr Kemp referred to the judgment of Widgery L J, as he then was, at page 501 at the top of the second column where he said "If, as Mr Barnett hinted, there are lessons in this case for insurance companies generally, the only lesson I can detect is that it is undesirable that two actions should be brought in respect of damage arising from the same incident, and in some cases such duplicity of action would be fraught with danger. We are not required to decide in the present case what would have happened if the first proceedings had been determined not by a compromise but by the entering of judgment; but I can see that if that had happened it might well have been argued that the cause of action had been merged in the judgment, and it may be that the present Appellants would then have had a technical objection to liability of a kind which they cannot raise on the facts of this case." At the end of his judgment the judge also said this - "The real point in this case is that the original action was not disposed of by judgment; it was not disposed of under the machinery of the County Court Rules following the payment into court; it was disposed of by agreement, and, for the reasons which my Lords have already given, I can see no possible contention in this case that the agreement extended beyond the claim in the first action, which for this purpose did not include the balance of the claim for damage to the motor car."

Mr Kemp submitted that in the present case the first action between the parties had been disposed of by a judgment of the court because, he said, "judgment" covered a decree granted following the Tender procedure. The giving of such a judgment was a judicial act whereas what had happened in Taylor was not.

Mr Kemp also referred to the case of Buckland v Palmer 1984 1WLR 1109. He pointed out that in that case the Master of the Rolls had said at page 1114, just below letter H, that Taylor was a very special case. The court had made it clear that in England a second action is not competent but what was competent was procedure to remove the stay in the first action. Mr Kemp argued that when one examined the terms of the judgment of Griffiths L J, as he then was, in Buckland and the decision of Sheriff Macphail in McPhee it was clear that the trend in both Scotland and England was towards determining all issues in the one action. The great weight of authority supported the Defender, said Mr Kemp, and the "joker in the pack", as he put it, was McSheehy in which the Sheriff had felt bound to reach a decision which he considered to be fair and equitable to the Pursuer.

I have no hesitation in saying that I prefer the submissions for the Defender. I have concluded that in determining this issue I am indeed bound by the decision of the Inner House of the Court of Session in Stevenson. However, even if I was not bound by the decision in that case, I have to say that I regard the approach adopted by Sheriff Macphail in McPhee as the correct one. I also find support for my decision in the comments of the judges of the Court of Appeal in Buckland. Accordingly, I have decided that following the approach of Sheriff Macphail in McPhee the plea of res judicata must be sustained and the Defender is entitled to decree of absolvitor.

I cannot leave this case without observing that it is unfortunate that neither Mr Wilson nor Mr Kemp referred me to the decision of Lord Macfadyen in Irving v Hiddleston 1998 SCLR 350. I only became aware of the existence of this authority after I had reached my own conclusion that the reasoning of Sheriff Macphail in McPhee was to be preferred to the approach adopted by Sheriff Lockhart in McSheehy. It is comforting to me to note that Lord Macfadyen takes the same view. I did consider whether in the light of my becoming aware of the decision in Irving I should put this case out for a further hearing. However, in view of the delay which had already been caused by continuing the hearing in order to obtain a copy of the full report in Taylor and the fact that Lord Macfadyen's decision in Irving was apparently consistent with my own initial view of matters I decided that it was not necessary to do so.

I was not addressed upon the question of expenses and, accordingly, a hearing will be required to dispose of that matter.