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Cite as: [2003] ScotSC 12
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Secretary State Trade Industry v. Stephen [2003] ScotSC 12 (10 January 2003)
B379/01
JUDGMENT OF
SHERIFF PRINCIPAL IAIN MACPHAIL QC
in the appeal
in the cause
HER MAJESTY'S SECRETARY OF STATE FOR TRADE AND INDUSTRY
Pursuer and Appellant
against
JOHN GRANT STEPHEN
Defender and Respondent
_________________________
Act: Scott; Shepherd & Wedderburn, WS
Alt: Party
EDINBURGH, 10 January 2003
The Sheriff Principal, having resumed consideration of the cause, allows the appeal; recalls the interlocutor of 11 September 2002 complained of; finds the pursuer and appellant liable to the defender and respondent in the expenses of the appeal; allows an account thereof to be given in and remits the same, when lodged, to the Auditor of Court to tax and to report; remits the cause to the Sheriff to proceed as accords.
NOTE
[1] This is an application under section 7 of the Company Directors Disqualification Act 1986 for a disqualification order under section 6(1) of the Act. Neither party appeared at the continued hearing of a motion for the pursuer, and the Sheriff pronounced an interlocutor dismissing the application. Against that interlocutor the pursuer now appeals.
[2] The history of the matter is as follows. The application was served on the defender on 14 January 2002. At the first calling of the case on 13 February 2002 it was continued for investigation until 13 March 2002. On that date the court appointed the defender to lodge answers and assigned 16 April 2002 as a diet for regulating further procedure. On 16 April the cause was continued for adjustment of the application and answers until 28 May 2002. On the latter date it was continued until 25 June 2002 to enable the defender to instruct a solicitor. On 25 June there was no appearance for the pursuer, but the defender appeared and the presiding Sheriff, having heard him, sisted the cause for negotiations. Thereafter the pursuer lodged a motion (no 7/1 of process) to recall the sist and to allow parties a proof before answer. The defender opposed the motion and a hearing of the motion was assigned for 28 August 2002. On 21 August, however, the defender was sequestrated. The pursuer's agents only learned of his sequestration on 27 August. When the motion was called on 28 August the defender was absent but the pursuer's solicitor appeared. On that solicitor's motion the presiding Sheriff continued consideration of the motion until 11 September 2002 to give him an opportunity to take instructions. In error, however, the hearing of 11 September was not entered in that solicitor's diary, and he consequently failed to appear on that date. The defender did not appear either, because he thought he did not need to do so as he had been sequestrated and thus was automatically disqualified for three years. When the motion was called before the Sheriff she pronounced an interlocutor dismissing the application ex proprio motu on the ground that there was no appearance by or on behalf of either party, and finding no expenses due to or by either party. It is against that interlocutor that the present appeal is taken.
[3] In her note written for this appeal at the pursuer's request the learned Sheriff states:
'In the absence of any representation and therefore any explanation for the pursuer's failure to appear to move the motion there was no information before me to allow me to consider exercising any discretion which I may have had. In this case the pursuer's principal agent had appeared on 28 August and requested an opportunity to investigate the insolvency of the defender. Her failure to appear on 11 September implied an intention not to proceed further with the summary application. Although the hearing on 11 September was not a 'diet' in terms of rule 16.2 [of the Ordinary Cause Rules 1993] the court had appointed a hearing on that date to consider further procedure. The pursuer's agent had a duty to appear. I would observe that there would appear to be an increasing frequency of agents failing to appear at diets, particularly when actions have been continued for settlement.'
[4] My own recent experience of the Ordinary Court is consistent with the observation in the Sheriff's final sentence. As she recognises, however, this is not a process to which the Ordinary Cause Rules generally apply. This is a summary application in which the procedure is subject to section 50 of the Sheriff Courts (Scotland) Act 1907 and the Sheriff Court Summary Application Rules 1993. These provisions do not afford a sheriff any guidance as to how to proceed in the situation which faced the learned Sheriff in this case. Rule 2.30 of the 1993 Rules provides that except where the sheriff otherwise directs, any motion relating to a summary application is to be made in accordance with, and regulated by, Chapter 15 of the Ordinary Cause Rules. Rule 15.5 is concerned with the hearing of motions, but it does not state what the sheriff is to do if a party fails to appear to move an opposed motion.
[5] In my opinion, however, guidance may be found in the cases of Saleem v Hamilton District Licensing Board 1993 SC 175, a decision of the First Division, and Forsyth v Chief Constable, Strathclyde Police 1997 SLT (Sh Ct) 80, a decision of Sheriff Principal Hay. In neither case was the situation under consideration precisely the same as that in the present case. In Saleem the applicant's solicitor failed to appear at the first calling of the case. In Forsyth the applicant's solicitor failed to return the initial writ at the first calling. The decisions indicate that while the sheriff has a discretion as to how to dispose of the application in such a situation, he or she should normally drop the case from the roll and should dismiss the application only in exceptional circumstances. The reason for that is that at that stage the sheriff will usually have had neither the time nor the opportunity to examine the initial writ in any detail and thus to know whether the applicant had a statable application; and, where the applicant's solicitor has failed to appear, the sheriff cannot normally be expected to know whether he had a reasonable excuse for his absence. If the case is dropped from the roll, the applicant's solicitor may lodge a fresh motion and, where he has failed to appear, he will no doubt wish to tender his apologies and an explanation. I refer, in particular, to Saleem at page 179D-F. (I take this opportunity to observe, incidentally, that the passage from the first edition of Macphail's Sheriff Court Practice para 26-17 (para 25.20 of the second edition) which is referred to in Saleem was written by myself and not by the author of the following chapter on miscellaneous statutory powers and duties, as the Court appears to have thought.)
[6] I consider that the reasoning in these cases is apposite in the circumstances of the present case. The hearing on 11 September had been fixed to allow the pursuer's solicitor to investigate, and to continue consideration of the pursuer's motion. I agree that the pursuer's solicitor had a duty to appear, but I consider that the sanction for failure to appear was not necessarily the dismissal of the application. An alternative sanction was the dropping of the motion and the vexation, delay and expense occasioned by the need to lodge a fresh motion and to tender to the Sheriff apologies and explanations for the absence. In this case the solicitor's failure to appear did not necessarily imply an intention not to proceed further with the application. Nor did it necessarily imply some wilful disobedience of an order of the court or any gross carelessness in failing to attend, such as might have justified a decree of dismissal. I note that this was the second time that the pursuer had not been represented at a calling of the case - as I have recorded, there had been no appearance on 25 June - and I share the Sheriff's adverse view of the failure of solicitors to appear at diets. In my view, however, the circumstances were not so clear-cut and extreme as to warrant dismissal, and the appropriate course would have been to follow the course approved in Saleem.
[7] For the reasons given above, which are essentially those advanced by the pursuer's solicitor at the hearing of the appeal, I have decided that the decree must be recalled. The pursuer's solicitor also stated an alternative argument, upon the view that the Sheriff had been justified in granting decree of dismissal. He referred to the approach of an appellate court to an appeal against decree by default which is set out in Macphail, para 14.12, and to Wanderers World Ltd v Marco's Leisure Ltd 2000 SLT (Sh Ct) 79 at page 82C-D. He sought to satisfy me that the default was excusable and that the interests of justice in effect called for the case to be allowed to proceed. I would have sustained this argument if it had been necessary to do so. The failure was due to a simple, although regrettable, error, and the pursuer marked an appeal at once. In addition, the initial writ indicates that the pursuer has a prima facie proper application which is made in the public interest.
[8] The defender appeared on his own behalf and urged me to refuse the appeal. He understandably felt aggrieved on two grounds. First, as I have mentioned, the pursuer's solicitor had failed to appear on two occasions in a case which was of importance to the defender and was causing him anxiety. Secondly, he considered that since he was already disqualified for three years by virtue of his sequestration, there was little point in the pursuer's persisting with the present application. He said that the pursuer had proposed a voluntary agreement that he should be disqualified for four and a half years; and that there was little practical difference between that period and three years. He considered that certain of his fellow-directors had been more considerately treated than he, and that that was unfair. The defender stated his position with clarity and courtesy but I have concluded, for the reasons I have given, that the dismissal of the application cannot be supported.
[9] The pursuer's solicitor conceded that the pursuer should bear the defender's expenses in the appeal, and I have accordingly found the pursuer liable to the defender in these expenses. As in Saleem, I have remitted the cause to the Sheriff to proceed as accords.