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Cite as: [2003] ScotSC 51

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Gemini Corrosion Services v. Aberdeenshire Council [2003] ScotSC 51 (23 September 2003) SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT ABERDEEN

A1376/02

		JUDGEMENT of SHERIFF PRINCIPAL SIR STEPHEN S T YOUNG Bt QC
		in the cause
		GEMINI CORROSION SERVICES LIMITED
		Pursuers and Appellants
		against
		ABERDEENSHIRE COUNCIL
		Defenders and Respondents

Act: Mr Clark, advocate, instructed by Lefevre Litigation, Aberdeen

Alt: Mrs Wade, advocate, instructed by Ledingham Chalmers, Aberdeen

Aberdeen: September 2003

The sheriff principal, having resumed consideration of the cause, refuses the appeal and adheres to the interlocutor of the sheriff dated 11^th July 2003 under deletion of the words "Reserves meantime the question of expenses; Continues consideration of the cause to the Ordinary Court on Wednesday 23^rd July 2003 at 9.45 am within the Sheriff Court House, Castle Street, Aberdeen"; finds the pursuers and appellants liable to the defenders and respondents in the expenses of (1) the debate before the sheriff on 23^rd June 2003 and (2) 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 the cause to the sheriff to proceed as accords.

Note

In this case the pursuers and appellants seek payment from the defenders and respondents of two separate sums of money which are referred to in their first and second craves respectively. For present purposes it is necessary to notice only their first crave which is for payment of the sum of £26,000. In a nutshell, this sum is said to have been the cost to an American company, Energy Steel Products Inc.("Energy Steel"), of having four cone shaped neoprene covers ("the four cones") replaced. These four cones had been delivered to the pursuers by Energy Steel for surface treating work to be carried out upon them by the pursuers in the course of their business. At the material time the pursuers had entered into an agreement with the defenders for the collection of waste from their premises, and in short the pursuers say that on 12^th January 2001 employees of the defenders came to their premises and negligently removed the four cones and delivered them for disposal to a nearby landfill waste disposal site. Upon discovering what had happened, an employee of the pursuers went to the site and recovered the remains of three of the four cones. These had been damaged beyond repair or use. The remains of the fourth cone could not be found at all. By a subsequent assignation dated 16^th May 2002 Energy Steel assigned to the pursuers their (Energy Steel's) whole right, title and interest in and to its claim as owner of the four cones against the defenders in respect of the removal and subsequent destruction of the cones.

The defenders' first plea-in-law reads: "1. The pursuers' averments being irrelevant et separatim lacking in specification the action should be dismissed". After debate the sheriff sustained this plea-in-law so far as it related to the pursuers' first crave and dismissed this crave accordingly. He did so chiefly upon the view that the averments of the pursuers about the loss which had been sustained by Energy Steel as a result of the defenders' negligence were lacking in specification. These averments are to be found in articles 3 and 4 of the condescendence. In article 3 it is said that the four cones were "four proprietary steel and rubber cone shaped neoprene covers" which belonged to Energy Steel and which had been newly manufactured by their contractual manufacturer "for specialist offshore use in covering pipes". It is then said that each cone was "of considerable weight" and that the four of them had been delivered to the pursuers "for surface treating work". In article 4 it is averred that the cost to Energy Steel as owners of the four cones of having them replaced by their contractual manufacturer, Regal Rubber Company Limited, Cartmore Industrial Estate, Lochgelly, Fife, KY5 8LC ("Regal"), was £26,000 being £6,500 per cone. It is averred that this "was a reasonable non-profit charge by the contractual manufacturer".

All these averments are either not known or not admitted or else denied by the defenders. In their answer 3 they describe how on the date in question they went to the pursuers' premises to collect the contents of some wheeled bins. They then aver: "A pile of rubber cones was located less than one foot from the wheeled bins. The cones had the appearance of waste which had been left for collection. The cones were removed as waste". In their answer 4 the defenders largely repeat themselves where they aver: "The four cones had the appearance of a pile of rubber waste. The cones did not appear to be new. The cones appeared to be in a state of considerable disrepair. The cones had the appearance of waste".

After rehearsing the parties' respective submissions, the sheriff explained his decision on this aspect of the case in the following terms: -

In all the circumstances, I am of the opinion that there is substance in the main point made by the defenders, viz: - that the pleadings about the cones lack specification and for that reason the averments thereanent ought not to be admitted to probation. It therefore follows that I sustain the defenders' first plea-in-law and dismiss crave 1.

It has been said on numerous occasions that the object of a party's pleadings is to give the other party fair notice of what is being claimed. (The sheriff then considered the various authorities to which he had been referred).

All that the pursuers say about the cones is that they were "four proprietary steel and rubber cone shaped neoprene covers", for "specialist offshore use in covering pipes", and that each "was of considerable weight". They go on to say that the cost of replacement was £26,000. There is no reference to any diagram or any other source to which the defenders could refer for an indication of the size of these cones, the particular use to which they might be put, or what if anything was special about them, nor whether they were available from only one source or a number of sources. The issue of their value in terms of any argument about mitigation of loss is not a matter which can be considered at debate. That said, however, the defenders must have a sufficiently-clear statement from the pleadings to enable them to investigate issues such as mitigation of loss.

In their note of appeal the pursuers maintain in the first place that the sheriff erred in law in sustaining the defenders' first plea-in-law so far as it related to the first crave and in dismissing this crave accordingly. Specifically they say:

1. The sheriff failed properly to make and apply the distinction between issues of relevancy and specification and, in respect of the latter, properly to apply the test of fair notice in respect of specification of patrimonial loss averred to arise from relevantly averred breach of delictual duty of care.

2. The sheriff failed fully to take account of all the averments for the pursuers giving specification of the patrimonial loss including failing to record and take account of (i) the pursuers' averment specifying the identity (name and address) of Energy Steel's contractual manufacturer of the proprietary cones (the defenders having called on the pursuers to specify the identity of the contractual manufacturer) and (ii) the pursuers' averment that the contractual manufacturers' charge of £6,500 per cone was a non-profit charge.

Counsel for the pursuers submitted that I should recall the sheriff's interlocutor and allow a proof before answer of parties' respective averments in relation to both the first and second craves. He drew attention to the judgement of Lord President Cooper in Macdonald v Glasgow Western Hospitals 1954 SC 453 at page 465 where his Lordship stated: "The plea of lack of specification finds its proper application in a case where a defender does not know the case to be made against him and objects to being taken by surprise at the proof". Counsel accepted that the pursuers in their pleadings could have said more about the four cones than they had. He explained that there was a reason for their not having done so, but the question was whether they had met the test set out by Lord President Cooper. Counsel drew attention to the averments in articles 3 and 4 of the condescendence and answers 3 and 4 which I have already rehearsed. He suggested that the defenders' answers indicated that their employees had seen the four cones and had noted their appearance and hence would be able to give information about them to those instructed on behalf of the defenders. Counsel also drew attention to the copy invoice (no. 5/3 of process) from Regal to Energy Steel which appears to vouch the cost to Energy Steel of having the four cones replaced. He acknowledged that the terms of this invoice had not been incorporated into the pleadings with the result, as I understood him, that they could not be considered for present purposes. But he pointed out that the pursuers had in any event averred the sums shown as due in terms of this invoice, and had further averred that the total sum was "a reasonable non-profit charge by the contractual manufacturer".

Counsel continued by submitting that in light of these averments the defenders would be in a position to precognose members of their staff who had uplifted the cones from the premises of the pursuers and who had been present at the material time at the landfill site. They would also be able to precognose employees of Regal and, by means of a specification, recover from that company documents which would show how much steel, rubber and neoprene had been used in the manufacture of the replacement cones. In short, the pursuers in their averments had given sufficient specification to the defenders to allow them to undertake a meaningful investigation into the loss said to have been sustained by Energy Steel as a result of the negligent removal of the cones. There was therefore no need for the defenders to be taken by surprise at the proof.

In response, counsel for the defenders submitted that the sheriff had reached the correct decision on this aspect of the case. The defenders were unable in light of the pursuers' averments properly to investigate the case which had been made against them. As a matter of fact they had made various attempts to find out what the four cones were for, what size they were and what it would cost to replace them. They had gone to alternative manufacturers giving them the information on record and had been told by those in the industry that they did not know what the pursuers were talking about. They had thus been unable to obtain alternative quotations. It was for the pursuers to place on record sufficient information about the cones to allow the defenders to investigate the matter, and it was of no assistance in this context that their employees had been able to describe the cones in very broad outline. The pursuers knew precisely what the items were and were in a position to give more information about them than they had so far done. There was no obligation on Regal to provide the missing information and the defenders did not have enough information about the cones to conduct their own enquiries. Reference was made to Neilson v Househill Coal and Iron Company 1842 4D 1187 at pages 1192/3 and Lord Advocate v Johnston 1985 SLT 533 at pages 534/5 and it was submitted that the sheriff had rightly concluded that the pursuers' averments about the four cones lacked specification and hence ought not to be admitted to probation with the result that the sheriff's interlocutor dismissing the first crave should be adhered to.

In my opinion the submissions for the defenders are to be preferred. The four cones are described in article 3 as "proprietary steel and rubber cone shaped neoprene covers". In itself, this tells the defenders more or less nothing of significance about the design, construction, function or purpose of the cones. According to counsel for the pursuers, the use here of the word "proprietary" meant that the cones were made by a particular manufacturer. To my mind, the word imports rather more than this, namely that they were made by a particular manufacturer, or one of a select group of manufacturers, in accordance with a particular patent, trademark or design. But what that patent, trademark or design might have been is not specified. That there was something out of the ordinary about the four cones is apparent from the subsequent averment that they had been manufactured "for specialist offshore use in covering pipes" (my emphasis). Again, no indication is given as to what this specialist use might have been. It is true, as counsel for the pursuer pointed out, that the materials of which the cones were made are specified, namely steel, rubber and neoprene, and it is also said that they were "of considerable weight". But these details scarcely seem to me to assist the defenders in understanding exactly what these cones were. It is true too that they were seen by certain of the defenders' employees, but I intend no disrespect to these persons when I venture to suggest that they would have been most unlikely to have been endowed with the expertise necessary to give their employers or their advisers an accurate and detailed description of the four cones.

In article 4 the pursuers aver that the cost of having the four cones replaced by Regal was £26,000, being £6,500 per cone. Significantly, they then aver that this was "a reasonable non-profit charge" by Regal. No doubt this would allow an employee of Regal to give evidence at a proof to the effect that the company did not make a profit on the manufacture of the four cones. But it would not necessarily follow from this that the total cost of £26,000 was a reasonable one, and the pursuers' pleadings are silent on how they propose to prove this particular assertion. In my view the reasonableness or otherwise of this charge must depend upon a whole variety of considerations, including in particular the design, construction and so on of the four cones, which are not specified by the pursuers.

Counsel for the pursuers rightly pointed out that the name and address of the manufacturer of the four replacement cones, namely Regal, had been added by the pursuers by way of amendment so that the defenders would now be in a position to precognose employees of that company about the details of the cones. Likewise they could apply to the court for a commission and diligence to recover documents, including plans and specifications, which would perhaps tell them more than they have so far been told about the four cones. But it may be asked why they should be expected to go to the trouble and expense of these uncertain procedures when the pursuers are admittedly in a position to say more in their pleadings about the four cones but have for some reason not disclosed to the court deliberately chosen not to do so. In my opinion they cannot in these circumstances be heard to maintain that they have given the defenders fair notice of the case that is to be made against them on this issue. I therefore consider that the sheriff was right to sustain the defenders' first plea-in-law so far as it related to the first crave and to dismiss it accordingly.

In answer 5 the defenders have incorporated averments to the effect that any loss suffered by Energy Steel was caused or at least materially contributed to by the fault and negligence of the pursuers and their employees. These averments form the basis of the defenders' sixth plea-in-law which reads: "6. Separatim esto, in the event that the action (sic) was to any extent caused by the fault and negligence et separatim breach of contract of the defenders (which is denied), it having been caused or at least materially contributed to by the fault and negligence of the pursuers, any damages and expenses awarded to the pursuers should be reduced in terms of section 1 of the Law Reform (Contributory Negligence) Act 1945". The pursuers' response to this plea-in-law is to be found in their own sixth plea-in-law which reads: "6. The defenders' sixth plea-in-law being incompetent so far as directed to seeking reduction in terms of section 1 of the Law Reform (Contributory Negligence) Act 1945 of any sum that would otherwise fall to be awarded to the pursuers under crave (First), should be repelled so far as directed".(sic)

At the debate the sheriff heard argument on this last plea-in-law and in the event repelled it. On appeal counsel for the pursuers maintained that the sheriff was wrong to have done so and that what he should have done was to have sustained the pursuers' sixth plea-in-law and repelled the defenders' sixth plea-in-law. But it was acknowledged that the pursuers' sixth plea-in-law applied only to the sums sought to be recovered in terms of the first crave, and I did not understand there to be any dispute that, if the sheriff had been correct to dismiss this crave, then the issue whether or not he was also correct to have repelled the pursuers' sixth plea-in-law became academic. In this situation I think that it is unnecessary that I should myself express any opinion on this particular issue.

Counsel for the pursuers accepted that if they were unsuccessful on all the points raised in the appeal then they should be found liable to the defenders in the expenses of the debate before the sheriff and of the appeal itself. Counsel further proposed that, if there had been divided success in the appeal, then I should reserve the question of expenses for a further hearing. Counsel for the defenders suggested that I should reserve this question unless the pursuers had lost the appeal entirely. As I have already indicated, I have not found it necessary to reach a conclusion on the point about section 1 of the Law Reform (Contributory Negligence) Act 1945. But the fact remains that the pursuers have been unsuccessful in challenging the sheriff's decision to dismiss the first crave, and in this situation I think that the proper course is that they should be found liable to the defenders in the expenses of both the debate before the sheriff and the appeal.