Scottish Sheriff Court Decisions

Act: Mrs Gibson, solicitor, Paull & Williamsons, Aberdeen

Alt: Mr Benyon, advocate, instructed by Grant Smith Law Practice, Aberdeen

Stonehaven: December 2002

The Sheriff Principal, having resumed consideration of the cause, refuses the appeal and adheres to the interlocutor of the sheriff dated 19^th September 2002; refuses also the motion of the defenders and appellants made at the bar to amend in terms of their minute of amendment, no. 18 of process; finds the defenders and appellants liable to the pursuer and respondent in the expenses of the appeal and allows an account thereof to be given in and remits the same to the auditor of court to tax and to report; quoad ultra remits to the sheriff to proceed as accords.

Note

1. In this case the pursuer and respondent was formerly the owner of an insurance broking business. In 1997 he agreed to sell the business to the defenders and appellants. In terms of the agreement he assigned to them the right to collect all AXA life renewals and indexations from clients forming part of his life insurance bank at the completion date, namely 1^st July 1997. In return the defenders agreed to pay the pursuer 85% of the value of all such renewals and indexations for a period of four years from the completion date.
2. On 23^rd October 2001 the pursuer raised the present action in which he craved the court to ordain the defenders (1) to produce a full account of their intromissions in relation to AXA life renewals and indexations in respect of clients forming part of the pursuer's life insurance bank at 1^st July 1997 for the period from 1^st July 1997 until 1^st July 2001 and (2) to pay to the pursuer the sum of £55,000 or such other sum as might appear to be the true balance due by the defenders; and in the event of the defenders failing to enter appearance or failing to produce such an account, to ordain them to pay to the pursuer the sum of £55,000. Defences were lodged and on 19^th December 2001, on the unopposed motion of the pursuer, the sheriff pronounced an interlocutor in terms of which he ordained the defenders to lodge accounts of their intromissions in relation to AXA life renewals and indexations in respect of clients forming part of the pursuer's life insurance bank at 1^st July 1997 for the period from 1^st July 1997 until 1^st July 2001 within a period of fourteen days of intimation upon them of the interlocutor. (In passing, I notice that there are some minor typing errors in this interlocutor, but there was no dispute that the substance of it was as I have narrated).
3. On 28^th December 2001 the defenders' agents lodged in court what they described in a covering letter as "accounts of the defenders' intromissions as per interlocutor of 19^th December 2001" - see no. 9 of process. This consists of a total of ten sheets of paper. One is headed: "Summary of commissions due to or by Jim Chapman in respect of agency codes 126620 126621". It appears to be a summary of the figures brought out in the other nine sheets which themselves bear to be commission statements in respect of each of the two agency codes. In the case of the agency code 126621 there are five sheets, one for each of the years 1997 (from 1^st July), 1998, 1999, 2000 and 2001. In the case of the agency code 126620 there are four sheets, one for each of the years 1998 (from 1^st May onwards), 1999, 2000, and 2001. There is little in the way of narrative on any of these sheets, and in particular it is impossible to determine from an examination of them what the defenders' intromissions have been in relation to the life renewals and indexations referred to in the interlocutor of 19^th December 2001. In the summary sheet a balance of £2,132.28 is shown as being due and, although the point is not entirely clear, it appears that it is to the pursuer that this sum is said to be due.
4. By interlocutor dated 24^th January 2002 the sheriff appointed the pursuer to lodge objections to the account lodged by the defenders within four weeks, allowed the defenders a further two weeks to lodge answers to the objections, allowed a further four weeks for adjustment of the objections and answers and assigned 11^th April 2002 as the date for a procedural hearing on the objections and answers.
5. On 21^st February 2002 objections were lodged on behalf of the pursuer - see no. 11 of process. In article 1 the pursuer averred: "The document produced by the defenders is not an account". And in article 3 he called upon the defenders to produce an account identifying renewals and indexations received by them in respect of the pursuer's client bank at the completion date for the period 1^st July 1997 to 30^th June 2001, and in particular to identify within the account a variety of details including agency codes, client names, policy numbers and types, premiums payable, commissions due and paid and policies lapsed, terminated and transferred. As indicated, five of the sheets produced by the defenders bear to relate to Agency Code 126621 and four to Agency Code 126620, but otherwise none of the details sought by the pursuer can be discovered from an examination of these nine sheets.
6. On 11^th April 2002 the sheriff, on the defenders' motion, there being no opposition thereto, allowed four weeks for adjustment of the objections and answers and assigned 16^th May 2002 as a date for hearing parties on the objections and answers as adjusted. In referring here to the answers the sheriff was perhaps being somewhat charitable to the defenders since no answers had then been lodged - nor have any been lodged since.
7. On 16^th April 2002 the sheriff allowed the record to be opened up and amended in terms of a minute of amendment for the pursuer (no. 12 of process). The effect of this amendment was to substitute for the figure of £55,000 in the first crave of the initial writ sums of (i) £3,397.29 with interest from 1^st July 1997, (ii) £11,600 with interest from 1^st July 1998, (iii) £11,600 with interest from 1^st July 1999, and (iv) £11,600 with interest from 1^st July 2000.
8. On 10^th May 2002 an adjusted version of the pursuer's objections was lodged in court. Articles 1 and 3 remained as before, while in the opening paragraph of article 2 the pursuer averred: "The document produced by the defenders does not provide a full account of the defenders' intromissions in relation to AXA life renewals and indexations in respect of clients forming part of the pursuer's life insurance client bank at 1^st July 1997 for the period from 1^st July 1997 until 1^st July 2001". The remaining part of article 2 is largely taken up with a detailed examination of the ten sheets of paper which form no. 9 of process and, in short, the pursuer's averments are to the effect that the defenders have comprehensively failed to produce accounts of their intromissions in compliance with the terms of the sheriff's interlocutor dated 19^th December 2001. In support of these averments the pursuer tabled three pleas-in-law in the following terms:-

1. The defenders having failed to produce a full account of the defenders' intromissions in relation to AXA life renewals and indexations, decree should be granted in the alternative sum craved.
2. The document lodged in court by the defenders as a purported account, not being a full account of the defenders' intromissions in relation to AXA life renewals and indexations, decree should be granted in the alternative sum craved.
3. The defenders having failed to answer the pursuer's objections are deemed to have admitted said objections and accordingly decree should be granted in the alternative sum craved.

1. On 16^th May 2002 the sheriff on the motion of the pursuer appointed parties to be heard on his preliminary pleas and objections and assigned 12^th July 2002 as a diet for this purpose. But on 10^th July 2002, on the unopposed motion of the defenders, the sheriff discharged this diet, allowed the defenders twenty one days to lodge a minute of amendment and appointed the pursuer to lodge answers thereto, if so advised within twenty one days thereafter. The sheriff then allowed parties to adjust the minute of amendment and answers within fourteen days and assigned 19^th September 2002 as a hearing on the minute of amendment and answers as adjusted. To date no minute of amendment has been lodged by the defenders as allowed by this interlocutor.
2. On 19^th August 2002 a motion (no. 7/4 of process) was lodged on behalf of the pursuer in terms of which he moved the court to grant decree for the alternative sums sued for (namely £3,397.29, £11,600, £11,600 and £11,600) with interest and expenses "on the ground that there is no defence to the action disclosed in the defences and the defender has failed to produce an account".
3. This motion was opposed by the defenders and a hearing was therefore assigned for 5^th September 2002. On that date the sheriff, having heard parties, continued consideration of the motion to 19^th September 2002. On this last date he held the defenders to be in default in respect of their failure to obtemper the interlocutor of 19^th December 2001 and granted decree for payment by the defenders to the pursuer of the alternative sums sued for with interest and expenses. It is this interlocutor which is the subject of the present appeal.
4. In the note which the sheriff prepared following the marking of the appeal he recorded that on 5^th September 2002:

(The defenders' solicitor) conceded that he could not dispute the history of the case nor could he dispute the fact that the defenders had failed to lodge the accounts required in terms of the interlocutor in December 2001 and had failed to lodge a minute of amendment in accordance with the interlocutor of 12^th July 2002. He sought further time to produce a full accounting although he accepted that sums were due to the pursuer.

After considering the matter carefully, in view of the fact that some 10 months later the defenders had failed to produce the accounts ordered within 14 days of the interlocutor in December 2001, with considerable hesitation, I continued the motion to 19^th September 2002 for the appropriate account to be lodged. I made it clear that no further latitude would be allowed.

5. In his note the sheriff proceeded to explain what happened on 19^th September 2002. He recorded that the defenders' solicitor "immediately advised the court that he had been unable to lodge the accounts but sought further time for them to be prepared. He accepted in addition that no minute of amendment had been lodged and therefore there had been no change since the hearing on 5^th September. He conceded that sums were due to the pursuer but until the accounts were prepared the exact sum could not be ascertained". The sheriff was then addressed by the pursuer's solicitor who moved that he grant decree by default or alternatively summary decree against the defenders.
6. After recording the submissions for the pursuer the sheriff mentioned that the defenders' solicitor "in a brief reply stated that he could only seek the latitude of the court to allow further time to lodge the account. He freely conceded that a sum was due to the pursuer and that the defenders had not provided the information which would have been contained in the accounts which the court had ordered to be lodged". The sheriff then explained why he decided to grant decree by default against the defenders in the following terms:-

I gave the matter careful consideration as clearly a decree by default is a very serious step in a case. To deny the Defenders an opportunity to put forward a defence is an extreme sanction. On the other hand I agree entirely with the comment expressed by Sheriff MacPhail that "there must be an effective and appropriate sanction to compel the parties due compliance with the rules and orders of court". I was satisfied in this case that the Pursuer had been extremely patient in not making a motion before now given that the Defenders had completely failed to produce the accounts within 14 days of 19 December 2001. I further took into account that the Defenders had agreed at the time of purchasing the Pursuers' business that they would account to the Pursuer for the sums due to him. There was therefore a contracted obligation in existence long before my Interlocutor of 19 December 2001. Further they had failed to lodge a Minute of Amendment following their motion to discharge a diet of debate. I also took into account that I had continued the motion from 5 September to 19 September to enable the appropriate account to be lodged. I therefore considered that certainly on the basis of the authorities referred to by the Pursuer the Defenders had been given an extraordinary latitude and I was satisfied that the Defenders were as stated by Sheriff MacPhail at paragraph 14.02 "retarding or impeding the progress of the action as to infringe these interests and prevent the due administration of justice". The Defenders conceded that a sum was due to the Pursuer. Without production of the account the Pursuer had received none of these sums. In all these circumstances therefore I considered it appropriate to grant decree by default and I did so.

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7. After the sheriff had issued his original note both parties' agents wrote to the sheriff clerk seeking to clarify certain points of detail in the submissions which had been made to the sheriff on 5^th and 19^th September 2002. It was not disputed between the agents that the sheriff had been advised (1) that the alternative sum sued for (which had been reduced by way of amendment as recorded above) was not a random figure but was the product of a careful calculation, and (2) that 4^th January 2002 was the date by which the defenders ought to have lodged accounts in pursuance of the interlocutor dated 19^th December 2001. The defenders' agents maintained that the solicitor who had appeared for them had also stated to the sheriff on
   19^th September 2002 that the relevant papers in order to prepare the account of intromissions had been forwarded to chartered accountants who had in turn written to advise that the account would be unavailable for the calling on 19^th September 2002 but that a full account would be available on 27^th September 2002. In a supplementary note the sheriff dealt with this last point as follows:-

I accept that the defenders submitted that the relevant papers had been submitted to chartered accountants who hoped to have accounts prepared by 27^th September 2002. As I had made it quite clear at the hearing on 5^th September that I was, with considerable hesitation, continuing the hearing for a very last time to 19^th September for the accounts to be lodged I was not prepared to continue the hearing once more.

8. The sheriff reverted to this last point in a second supplementary note which he very helpfully prepared in response to additional grounds of appeal on behalf of the defenders which were allowed to be received shortly before the hearing of the appeal itself. In the second of these grounds reference was made to a letter from the defenders' accountants which had been provided to the sheriff and which vouched the proposition that "a full account would shortly be available" from these accountants. In response to this the sheriff wrote:

In relation to Ground 2 I accept that the Defenders produced a letter from the Accountants as stated. No mention, as far as I recall, was made at the Hearing on 5^th September of any referral to Accountants. Such a letter might have had more weight had it been produced on that date. I did however on 5^th September continue the Hearing to 19^th September to give the Defenders a final opportunity to produce the Accounts ordered by the Court some 9 months before. I made it clear I was continuing the motion to 19^th September with considerable reluctance and that it was a final continuation. Having made such a pronouncement I was not prepared to allow any further latitude.

9. Counsel for the defenders opened the appeal by arguing their first additional ground of appeal which reads as follows:

The learned sheriff erred in granting decree by default on 19^th September 2002 for the following reason. The defenders and appellants, by that stage, had already lodged the document comprising a summary of commissions due to or by the pursuer. The document had been responded to by the pursuer by means of a note of objections as adjusted. In such circumstances, it was incompetent for the sheriff to grant decree by default for the sum craved for. Instead, the sheriff should have fixed procedure under and in terms of a note of objections and answers thereto.

10. In support of this ground of appeal, counsel began by seeking to withdraw the concession which had been made before the sheriff by the defenders' solicitor to the effect that accounts had not been lodged in compliance with the interlocutor dated 19^th December 2001. Counsel drew attention to the statements which had been lodged as no. 9 of process and he suggested that, while it might be that these accounts were not adequate, this was not the same as saying that there had been a complete failure to obtemper the interlocutor of 19^th December 2001. It was accepted that the question whether or not a party had been in default was one of fact and degree, but in the present case the sheriff had been wrong to proceed upon the basis that there had been a complete failure by the defenders to lodge accounts as required by the interlocutor of 19^th December 2001. Given the procedure which had already taken place in the action, and in particular the lodging of the documents which formed no. 9 of process and the pursuer's objections thereto, it had not been competent for the sheriff to grant decree by default against the defenders. Reference was made here to Macphail's Sheriff Court Practice (2^nd Edn) paragraph 21.09 and Neill v Neill 1948 CLY 4687 in which, according to the very brief report, it was held by Lord Mackintosh that it had been incompetent in an action of accounting to grant decree by default for the random sum stated in the summons as payable failing production of the accounts, since accounts had been lodged in the process and the question between the parties had therefore come to be the balance due on these accounts. In the present case the issue had become what sum was properly due based on the material that had already been produced. It had not been submitted to the sheriff that failure by the defenders to lodge answers to the pursuer's objections would of itself justify the granting of decree by default. In the circumstances the sheriff had gone too far too fast. In the absence of (i) a minute of amendment by the defenders and (ii) answers by them to the pursuer's objections a diet of debate should have been fixed by the sheriff. It was accepted that the point of competency had not been taken before him but it was, so it was submitted, open to the defenders to take the point on appeal.
11. Under reference to Morrison v Smith and Calder 1876 4R 9 the pursuer's solicitor submitted that an appellate court should be slow to disturb the granting of decree by default by an inferior court. In the circumstances of the present case the interlocutor of the sheriff dated
    19^th September 2002 should be adhered to. On the question of the competency of the procedure adopted by the sheriff, he had been entitled to grant decree by default in terms of rule 16.2(1)(b) of the Ordinary Cause Rules since it had been conceded before him that the defenders had failed to implement the order of 19^th December 2001 by producing accounts as required. It was accepted that this concession might subsequently be withdrawn (subject to the question of expenses) and, this having been done, the question whether or not it had been competent for the sheriff to grant decree by default was at large on appeal. The case of Neill v Neill gave no guidance as to what was required to satisfy an order to lodge accounts. The document which had been produced as no. 9 of process could not be considered to be an account and no further hearing was necessary to determine this question. Reference was made to Wylie v Corrigan 1999 SLT 739, Smith v Barclay 1962 SC 2 and Guthrie v McKimmie's Trustee 1952 SLT (Sh.Ct.) 49. It was submitted that accounts which were lodged in pursuance of an order for accounts should be intelligible and should be capable of being controverted and of focusing the issues between the parties sufficiently to allow the true balance due to be ascertained. In the context of the present case the defenders should have lodged accounts giving details of their intromissions with the policies that had been assigned to them by the pursuer as part of the agreement for the sale of his business. In order to calculate the commissions due to the pursuer these accounts should have shown the individual policies under which recurring commissions were being paid so that the total of these over the four year period between 1997 and 2001 could be brought out. It was, so it was submitted, patently obvious that the document which had been produced as no. 9 of process did not allow the pursuer to assess whether the balance which had been shown as due was correct. The document was neither intelligible nor capable of being controverted. Its deficiencies had all been focused in the note of objections which had been lodged by the pursuer and in all the circumstances it had been competent for the sheriff on
    19^th September 2002 to grant decree by default.
12. In reply, counsel accepted that accounts which were produced should be intelligible and should fulfil the purpose for which they were intended. The document which formed no. 9 of process had a summary of figures under reference to two separate codes. It was accepted that it did not give a client by client breakdown of commissions earned on policies which had formed part of the pursuer's client bank. In particular, a full accounting had not been provided by the defenders in the sense of a policy by policy, month by month chronological account of the commissions and indexations received over the relevant period. The document, so it was said, was not unintelligible but it was accepted that it was incomplete or lacked the degree of vouching that would be necessary to calculate precisely the sum that would be due to the pursuer. The defenders, so counsel said, had gone some way in terms of their apparent provision of summaries and what needed to be done was more detailed. They had produced an accounting summary, but it was acknowledged that it was not a complete one. In the circumstances there had not been a complete failure to comply with the interlocutor dated
    19^th December 2001.
13. In my opinion the submissions for the pursuer on this branch of the case are to be preferred. The critical question here is whether, when the sheriff came to grant decree against them on
    19^th September 2002, the defenders were in default by reason of their having failed to implement the interlocutor of the sheriff dated 19^th December 2001 - see rule 16.2(1)(b) which provides that, where a party fails to implement an order of the sheriff within a specified period, that party shall be in default. The interlocutor required the defenders to lodge accounts of their intromissions in relation to AXA life renewals and indexations in respect of clients forming part of the pursuer's life insurance client bank at 1^st July 1997 for the period from 1^st July 1997 until 1^st July 2001 within a period of fourteen days of intimation upon them of the interlocutor. Before the sheriff it was conceded by the defenders' solicitor that they had not lodged such accounts so that at that stage there could have been no question but that they were indeed in default. On appeal this concession was withdrawn by counsel for the defenders, and it was not disputed that he was entitled to do so. It is accordingly necessary to decide now whether the document which the defenders lodged as no. 9 of process satisfied the terms of the interlocutor dated 19^th December 2001. In my opinion the short answer to this question is that the defenders must be taken to have admitted that they have failed to comply with the terms of this interlocutor, not having lodged answers to the pursuer's objections - see rule 9.7 of the Ordinary Cause Rules which provides that every statement of fact made by a party shall be answered by every other party, and if such a statement by one party within the knowledge of another party is not denied by that other party, that other party shall be deemed to have admitted that statement of fact. For whatever reason the pursuer's solicitor did not found upon this particular rule, so that it becomes necessary to consider whether, apart from any implied admission on the part of the defenders, they can be said to have failed to implement the terms of the interlocutor dated 19^th December 2001. In my opinion it is perfectly clear in the circumstances outlined above that they have so failed, and indeed it will be seen from the submissions of counsel which I have rehearsed above that he more or less admitted as much, in particular in his reply to the submissions of the pursuer's solicitor.
14. Referring to the decision in Neill v Neill, I can readily understand why it should be considered to be incompetent to grant decree by default for a random sum stated as payable failing production of accounts if accounts have already been lodged in process. But this begs the question whether what has been lodged satisfies the order for production of accounts. If, as in the present case, accounts have not been lodged in compliance with the order of the court, then in my opinion it is competent to grant decree by default in respect of the failure to lodge such accounts. Moreover, it does not follow from the fact that a note of objections has been lodged by a party that he must be taken to have accepted that accounts have in fact been lodged in compliance with the court's order. As the pursuer's solicitor observed, any such objections would not give to the document lodged by the defenders in the present case a status which it did not otherwise have. In short, the defenders were in my opinion in default within the meaning of rule 16.2(1)(b) so that it was indeed competent for the sheriff to have granted decree against them in terms of rule 16.2(2) which provides that, where a party is in default, the sheriff may grant decree as craved, decree of absolvitor or dismiss the cause, as the case may be, with expenses.
15. Before passing from this branch of the case, I may perhaps observe that, even if accounts had been lodged in conformity with the interlocutor dated 19^th December 2001, it is not easy to see how (as is suggested in this first additional ground of appeal) the procedure for establishing the true balance due to the pursuer could sensibly have been followed through in the absence, despite the terms of the sheriff's interlocutor of 24^th January 2002, of answers by the defenders to the pursuer's note of objections.
16. Counsel for the defenders submitted that, even if it had been competent for the sheriff to grant decree by default, he had erred in the exercise of his discretion in doing so. Counsel referred here to the sixth ground of appeal in the original note of appeal which is in the following terms:-

On 19^th September, 2002 the Defenders' agents advised the Court that during the period from 5^th September, 2002 the Defenders have been unable to prepare and lodge and intimate to the Pursuers a further Account of Intromissions. The Defenders' agents advised the Court that the papers had been passed to a firm of Accountants, namely McPherson & Company, Chartered Accountants, Aberdeen who had advised the Defenders' agents that it was not possible to produce an Account for the hearing of the case on 19^th September, 2002 but that an Account would be ready no later than Friday 27^th September, 2002. The Defenders agents advised the Court that the Accountant had requested that the case be further continued until after 27^th September, 2002 to allow the said Account of Intromissions to be lodged and intimated to the Court. The Sheriff refused the Defenders' Motion and granted Decree by default against the Defenders in the above terms. The Sheriff erred an exercise in discretion not to allow a further continuation to allow the Account of Intromissions to be produced, having regard to the short period of time from 19^th September, 2002 until Friday 27^th September, 2002 within after which period an Account of Intromissions could have been lodged by the Defenders. In such circumstances as the Defenders would have been allowed to lodge the proper Account of Intromissions the Defenders would no longer be in default and therefore the Pursuers would not have been entitled to Decree of Default being granted against them.

17. Counsel referred here also to the second additional ground of appeal which is in the following terms:-

Separately, on the basis that the Sheriff was entitled to consider granting decree by default (which is not accepted) then the Sheriff erred by failing to take into account the material factor which was the subject of submissions to him on 19^th September. In particular, as specified in paragraph 6 of the existing ground of appeal, the Sheriff was advised that a full account would shortly be available from the Defenders' accountants, MacPherson & Company, and that a letter vouching that availability from MacPherson & Company was provided for the Sheriff. The learned Sheriff failed to take into account that material factor. He also failed to take into account or give proper weight to the material factor that the Defenders were wishing to maintain a defence on quantum and had a factual basis for wishing to do so. The learned Sheriff accordingly failed to take into account or give appropriate weight to the prejudice which the Defenders would suffer if a decree was passed against them for a sum in excess of what may properly be due to the Pursuer.

18. Counsel referred in this context to Britton v Central Regional Council 1986 SLT 207, G v G 1985 1WLR 647 and Macphail at paragraphs 18.111 and 18.112. He submitted that on a fair reading of his original note the sheriff had made an error in the balancing exercise required of him in that he had not given weight to the consequences of allowing decree for the full sums sought in the alternative to be taken against the defenders in a situation in which they were wishing to maintain a line of defence on the quantum of the pursuer's claim. Moreover, he had erred in characterising the case as one which had had a bad procedural history and failure on the part of the defenders. It was accepted that there had been some delay on their part, but this had not been of a particularly bad type. To the extent that obligations had been owed to the pursuer by the defenders on an accruing monthly basis in terms of the agreement between them, he had been entitled to interest on outstanding sums on a month to month basis at 4% over the base rate of the Royal Bank of Scotland. Thus, if there had been any delay on the part of the defenders, he had been afforded a measure of protection. Moreover the action itself had not been raised until 2001. If the pursuer had felt that the delays on the part of the defenders had not been acceptable, he could have raised the action before them. Furthermore it was submitted that the sheriff had failed to take into account a material matter, namely the submission which had been made to him by the defenders' solicitor that "full or better accounts" (sic) would be available shortly.
19. On the assumption that the sheriff had erred in the exercise of his discretion so that the matter was at large on appeal, counsel submitted that, looking to the scale of any failure by the defenders to comply with the order dated 19^th December 2001, I should not grant decree by default against them. Counsel stated that he had been told that further vouching of the defenders' intromissions was available, having been prepared by their accountants and that considerable documentation in the form of files had already been made available to the pursuer's agents. As already indicated, the defenders wished to maintain a defence on quantum and the scale of the dispute between the parties in this respect was extensive. He had been advised that a sum of approximately £2,500 with interest was accepted as being due by the defenders to the pursuer. In all the circumstances the sheriff's interlocutor dated
    19^th September 2002 should be recalled and the defenders should be ordered to lodge (1) "further accounting details" (sic), (2) a minute of amendment in the principal action to reflect what was properly due to the pursuer, and (3) answers to the pursuer's note of objections. Thereafter the pursuer should be allowed time to answer the defenders' minute of amendment and to adjust his note of objections and, after a further period for adjustment at large, the cause should be remitted to the sheriff to proceed as accords.
20. Under reference to Gray v Gray 1968 SC 185 the pursuer's solicitor submitted that the sheriff had correctly exercised his discretion in granting decree by default against the defenders and that, in any event, if the matter were at large on appeal I should similarly exercise my discretion so as to grant decree by default against the defenders. It was submitted that there was no evidence to suggest that the sheriff had not given proper consideration to the consequences of granting decree by default against the defenders. Thus he had explicitly stated in his original note that he had given the matter careful consideration as clearly a decree by default was a very serious step in a case and that to deny the defenders an opportunity to put forward a defence was an extreme sanction. As for the submission that the sheriff had failed to take account of the fact that further accounts would be available shortly, it was as plain as a pikestaff that the sheriff had been aware that the defenders had made arrangements to lodge accounts and that it was proposed that these could be produced by 27^th September 2002. He had nonetheless exercised his discretion not to grant any further time to the defenders for this purpose and it was submitted that he had not been shown to have been in error in exercising his discretion in granting decree by default.
21. On the assumption that the matter was at large on appeal, the pursuer's solicitor referred to Stewart v McDaid 1987 SCLR 342 and in particular the passage in the judgement of Sheriff Principal Caplan (as he then was) at page 343 where it is stated:

The defender seems to have shown little interest or urgency in putting forward a reasonable presentation of his defence. The pursuer is entitled to expect that a claim in the sheriff court such as the present claim will proceed with reasonable expedition and the rules of court are designed to facilitate such progress. There is still no evidence that the defender appreciates the need to give the pursuer and the court fair and reasonably prompt notice of his defence. Nor is there clear indication that the original failure to give his solicitors adequate instructions was due to inadvertence or genuine difficulty rather than indifference or worse. In the circumstances I consider that it would not be appropriate or fair to the pursuer to grant the relief now sought.

22. The pursuer's solicitor submitted that in the present case too the defenders had shown a complete disregard for the rules and procedures of the court in the sense indicated by
    Sheriff Principal Caplan in the passage quoted. As far back as 19^th December 2001 the sheriff had ordained the defenders to lodge accounts and the first suggestion that the document which had been lodged by the defenders as no. 9 of process complied with the terms of the sheriff's order had come when the additional grounds of appeal had been lodged on 7^th November 2002. In the interim they had done nothing at all about the action. They had lodged defences which, it was now admitted, did not reflect their true position in that it was there denied that any sum was due to the pursuer whereas counsel had now accepted that some money was due. The defenders had failed to lodge answers to the pursuer's note of objections and they had failed also to lodge a minute of amendment following the sheriff's interlocutor of 10^th July 2002. At the hearing on 5^th September 2002 they must have known that time was running out for them. On that occasion they had been granted latitude by the sheriff, but at the continued hearing on 19^th September 2002 all that they had been able to say was that they expected further accounts to be lodged by 27^th September 2002. This was a case where there had been a disgraceful failure on the part of the defenders to lodge documents and obtemper the orders of the court to allow the case to proceed. Sooner or later it was reasonable for the pursuer to assume that the court's indulgence would run out, and this stage had now been reached. It might have been thought that, at the very least, the defenders would have appeared at the appeal with a minute of amendment and further accounts. Instead they had simply asked for more time to produce these. In all the circumstances, if the matter was a large on appeal, I should exercise my discretion in favour of the pursuer by granting decree by default against the defenders.
23. In a brief reply on this branch of the case, counsel for the defenders acknowledged that they had not covered themselves in glory. But he submitted that it was going too far to say that their conduct in the action had been disgraceful. In the circumstances they should be given one final chance in particular since there was a difference of approximately £36,000 between the sums for which decree had been granted and the sum which the defenders accepted was due to the pursuer.
24. In my opinion it has not been shown that the sheriff erred in the exercise of his discretion in granting decree by default against the defenders. It is clear from the terms of his original note that he was well aware of the serious consequences for the defenders of granting decree against them and that he took these consequences into account. As for the suggestion that he did not take into account the fact that the defenders wished to maintain a defence on quantum, although he does not say so explicitly, it is in my opinion plain on a fair reading of his original note that the sheriff was aware that the parties were at odds on the precise sums due to the pursuer in terms of the agreement between them. The sheriff was evidently aware too that it was maintained for the defenders on 19^th September 2002 that they would be in a position to produce accounts on 27^th September 2002. But in my opinion he was quite entitled in view of the previous history of the case as outlined above to take the view that the defenders should be allowed no more time to produce these accounts.
25. Even if the matter had been at large on appeal, I can confidently say that I too should have thought it appropriate to grant decree by default against the defenders. I recognise that there is a difference of some £36,000 between the sums for which decree has been granted and the sum which the defenders accept is due to the pursuer. But of course it is not possible to determine if this difference has been accurately stated in the absence of proper accounts of the defenders' intromissions. Their counsel suggested that a sum of about £2,500 was due by them, but he advanced no basis upon which this had been calculated. In particular, I did not understand him to suggest that it could be justified by reference to the figure of £2,132.28 which is shown as the balance due in the document which forms no. 9 of process. The accuracy of this last figure is itself incapable of verification given the sparcity of information in the ten sheets which go to make up the document. The truth of the matter seems to me that the defenders have had ample time in which to produce proper accounts in compliance with the interlocutor of
    19^th December 2001 which would vouch the true balance due to the pursuer. Had they even produced such accounts at the outset of the appeal along with answers to the pursuer's note of objections and the minute of amendment which they had been allowed to lodge in terms of the interlocutor dated 10^th July 2002, I might perhaps have been persuaded to take a more sympathetic view of their position. But they did not do so and in the circumstances I entirely agree with the sheriff's conclusion that no further latitude should be allowed to them.
26. For the sake of completeness I should record that I was also addressed on the question whether or not, if decree by default were not to be granted against the defenders, summary decree should be granted instead. In view of what I have said so far it is unnecessary to say more on this matter except to mention that, towards the end of his reply to the submissions of the pursuer's solicitor, counsel for the defenders produced a minute of amendment (no. 18 of process) in terms of which it was proposed to make certain amendments to the defenders' answers in the principal action. Not surprisingly the pursuer's solicitor protested, rightly in my opinion, that this minute of amendment came far too late in the day and I have refused to allow it accordingly.
27. Counsel for the defenders conceded that they should be found liable in the expenses of the appeal whatever its outcome.