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Cite as: [2004] ScotSC 36

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SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT KIRKWALL

A74/01

		JUDGEMENT of SHERIFF PRINCIPAL SIR STEPHEN S T YOUNG Bt QC
		in the cause
		MICK RENNIE
		Pursuer and Appellant
		against
		MAGNUS NORQUOY
		Defender and Respondent

Act: Mr W G Sutherland, solicitor, Kirkwall

Alt: Mr M Scott, solicitor, Drever & Heddle, Kirkwall

Kirkwall: 18^th May 2004

The sheriff principal, having resumed consideration of the cause, allows the appeal and varies the interlocutor of the sheriff dated 12June 2003 as follows:

In finding in fact and law 2 delete the words: "less £493 paid by the defender in respect of outlays leaving a balance of £591.45".

Delete finding in fact and law 4, namely "That expenses are due to or by neither party".

In the final paragraph of the interlocutor (beginning "Therefore, in respect of ......") delete the figure £591.45 in the third line and substitute therefor £1,084.45.

Quoad ultra remits the cause to the sheriff of new to consider and determine the question of the expenses of the action (so far ad these have not already been dealt with in terms of the interlocutor dated 12June 2002) but only after giving parties an opportunity to be heard thereon; finds the defender and respondent liable to the pursuer and appellant in the expenses of the appeal as taxed and allows an account thereof to be given in and remits the same, when lodged, to the auditor of court to tax and to report.

Note

[1] In this case the pursuer and appellant originally raised a summary cause against the defender and respondent for payment of the sum of £1,084.45, being the balance due on a running account between the parties for electrical works carried out from time to time by the pursuer on the defender's fishing boat. In response the defender disputed liability and raised a variety of issues chiefly concerned, so it seems, with the quality of the pursuer's workmanship. In addition he lodged a counterclaim against the pursuer for payment of the sum of £10,840 to compensate him for various losses allegedly sustained by him as a result of the pursuer's defective workmanship. Although I have not seen an interlocutor in terms of which the sheriff directed that the cause should thereafter be treated as an ordinary cause, it is not in dispute that, following the lodging of the defender's counterclaim, the cause was treated for all purposes as an ordinary cause and proceeded accordingly.

[2] In due course Sheriff Penman allowed parties a proof before answer of their respective averments. The proof proceeded before Sheriff Mackenzie on 27 August and 3 December 2002 and 14 January 2003. On this last date he continued the cause to 11 February 2003 for submissions. According to the interlocutor sheets, when the case was called on 11 February 2003 both parties were represented by their respective solicitors and the sheriff ex proprio motu continued the cause to 27 February 2003 for submissions. There is no interlocutor dated 27 February 2003, but there is one dated 3 March 2003 which records that the sheriff, having considered written submissions by each party, made avizandum.

[3] On 12 June 2003 the sheriff issued his judgement in the form of an interlocutor and note. He found in fact and law that the pursuer was entitled to payment of the outstanding sum of £1,084.45 (which was the amount which he had originally claimed) less £493 paid by the defender in respect of outlays leaving a balance of £591.45. In addition, he rejected the defender's counterclaim in its entirety and found in fact and law that "expenses are due to or by neither party". In light of these findings he granted decree in favour of the pursuer for payment of the sum of £591.45 and assoilzied him from the crave in the defender's counterclaim.

[4] The pursuer subsequently lodged a note of appeal against the sheriff's interlocutor upon the following grounds:

That the Sheriff erred in law in the following respects:-

By making a finding in fact that the Defender had paid the sum of £493 towards account, whereas no evidence was led to that effect;

Making a finding on expenses when he had not been addressed on the matter of expenses and, in addition, that having found in favour of the Pursuer and against the Defender, one might expect expenses to follow success and for the Pursuer to have obtained an award of expenses against the Defender. The Sheriff makes mutually inconsistent remarks in his note attached to the Judgement which bear on the Sheriff's finding as to expenses, which render the Sheriff's decision in that regard as unsound.

[5] In response to the pursuer's note of appeal the sheriff helpfully prepared a further note dated 3 July 2003. In this he frankly acknowledged that he had been wrong to deduct the sum of £493 from the sum originally claimed by the pursuer, and at the hearing of the appeal it was not in dispute that the sheriff ought to have granted decree for payment in favour of the pursuer of the sum of £1,084.45 rather than the sum of £591.45.

[6] In the note appended to his interlocutor dated 12 June 2003, after dealing with the merits of the pursuer's claim and the defender's counterclaim, the sheriff dealt with the matter of expenses in the following terms (Mr Hourston was an electrician called in by the defender following the departure of the pursuer):

That said I do think that the state of the wiring was in fact pretty poor when the pursuer left the job in April 2001 and that while he may not have had a precise duty to his employer to bring it up to the state Mr Hourston left it, or even to tell the defender about the situation, that loose arrangement he had enjoyed over the years would have allowed him either to replace matters at his own hand or at least informed the defender. That he didn't do so thus raises, I consider, questions of his good faith and in general fairness I consider that though he has essentially won his case no expenses should be awarded in all the circumstances to or by either party.

[7] It is not in dispute that no submissions were made by the parties' respective solicitors in regard to the expenses of the action, either orally or in writing. The sheriff's recollection of what happened in this context is recorded in his note dated 3 July 2003 as follows:

A debate on the evidence led was fixed initially for 11 February but in view of the nature of the evidence, I requested that the parties' agents provide written submissions which I explained they might speak to or expand if they wished but I asked if they could avoid dull or vain oral repetition in view of the constraints then present on court time.

On 11 February Mr Scott for the defender lodged written submissions but Mr Sutherland for the pursuer did not. The latter in fact was prepared to address me on the evidence viva voce but in view of the still cramped court diary I again asked if he were prepared to submit written submissions which he said he was (explaining that he had thought it had been an option rather than a requirement - in which he was of course quite correct except that we did not have time to pursue an oral course of proceedings on that particular day, if memory serves me correctly). The case was continued to 27 February for him to lodge written submissions and for both agents to appear and speak to and if desired beyond their respective written submissions. Neither appeared on 27 February but Mr Sutherland lodged written submissions on 3 March without indicating that he wanted to be heard further thereon. I took the view that I was not to be further addressed and took the matter to avizandum ......

With regard to expenses the whole case at every turn had grown arms and legs and given that the defender's position had been at the very least arguable and the pursuer had not moved for expenses, it was open to me to award expenses or not as it seemed to me just in all the circumstances, and so I did. I am not obliged to wait for a party to move for expenses and for the reasons given I considered in my discretion fair not to award any.

[8] The accuracy of what the sheriff had said in his note dated 3 July 2003 was challenged by the pursuer's solicitor at the hearing of the appeal. He explained (and the defender's solicitor agreed) that at the close of the evidence on 4 January 2003 the cause had been continued to 11 February 2003 to allow submissions to be made. Due to the pressure of business that day the hearing had been postponed to 27 February 2003. But on 25 February 2003 the sheriff clerk had made it known to both solicitors that the sheriff was inviting them to lodge written submissions on the evidence. The defender's solicitor duly did so on 27 February 2003, and the pursuer's solicitor did so on 28February 2003. It appears that neither solicitor appeared before the sheriff to present oral submissions at the hearing which had been fixed for 27 February 2003, and the pursuer's solicitor explained that he had not been under the impression that he and the defender's solicitor would have the opportunity to make oral submissions that day. The defender's solicitor explained that neither he nor the pursuer's solicitor had been aware that they would be afforded an opportunity on 27February 2003 to present any argument to the sheriff on the question of the expenses of the action.

[9] The written submissions lodged for the pursuer dealt at some length with the merits of the action, but were silent on the question of expenses. The written submissions for the defender likewise dealt at length with the merits of the action and finally invited the sheriff to reserve the question of expenses meantime.

[10] Unfortunately the date upon which the parties respective written submissions were received by the court have not been recorded, so far as I can see. But the written submissions for the pursuer bear to have been faxed by his solicitor between 12.24 pm and 12.31 pm on 28 February 2003. That day was a Friday, and I surmise that what may have happened is that these written submissions were received at the court after the sheriff had left Kirkwall to return to Lerwick with the result that he only received them on the following Monday, 3 March 2003.

[11] Opening the appeal, the pursuer's solicitor submitted that the sheriff had erred in law in making a finding in regard to the expenses of the action without having first been addressed on the matter by the parties. He drew attention to what had been said by the sheriff in his note dated 3 July 2003 and submitted that the sheriff's having dealt with the matter of expenses without having been addressed thereon was bad practice and had contravened the rules of natural justice. He explained that it was common practice in this court for parties to make submissions on the substantive issues in a case and for a hearing on expenses to be fixed only once judgement had been pronounced upon these issues. He proceeded to give his narrative of events (with which, as noted, the defender's solicitor agreed) and pointed out that, in his own written submissions, he had said nothing about the question of expenses while the defender's solicitor in his written submissions had asked for this question to be reserved. He suggested that it must have been obvious to the sheriff that the question of expenses would be a significant one in the present case for both parties, neither of whom was in receipt of legal aid. In particular the pursuer had been dragged by the defender into an elaborate ordinary cause in which, at the end of the day, he had been wholly successful. Neither party had been given a chance to address the sheriff on the question of expenses notwithstanding that both he and the defender's solicitor had expected that a hearing on expenses would be fixed and had been surprised by the pre-emptive terms of the sheriff's interlocutor dated 12 June 2003. In these circumstances the cause should be remitted to the sheriff to allow him to reconsider the question of expenses after hearing parties or alternatively this question should be regarded as being at large on appeal.

[12] The defender's solicitor accepted that it was usual in this court to fix a hearing on expenses. But he submitted that the sheriff had been entitled to deal with the matter without being heard by parties. He further concurred in the proposal that, if the sheriff had indeed erred in law in this context, the cause should be referred back to him to allow him to reconsider the question of expenses.

[13] It is I think important to notice that the pursuer's crave was for payment of the sum of £1,084.45 with interest and with expenses likewise the crave in the defender's counterclaim was for payment of the sum of £10,840 with interest and with expenses. The emphasis in each case is mine, and its significance becomes apparent when one sees that the final sentence of the pursuer's solicitor's written submissions in support of the pursuer's claim read: "I would respectfully invite the court to find for the pursuer in his claim against the defender". So too the final sentence of his written submissions on the defender's counterclaim read: "I would therefore invite the court to reject the defender's counterclaim in its entirety". In other words, as I read these submissions, the pursuer's solicitor did indeed invite the court to find the defender liable to the pursuer at least for the expenses of his own claim even if, in the context of the counterclaim, he went no further than inviting the court to reject the defender's crave for expenses. It follows in my respectful opinion that the sheriff fell into error when he stated in his note dated 3 July 2003 that the pursuer had not moved for expenses, at least when speaking of the pursuer's claim against the defender.

Moreover, I think that the sheriff ought not to have proceeded to reach a final decision on both the merits of the case and the question of expenses upon the basis only of the parties' written submissions unless he had previously made it clear to both solicitors that they would have no further opportunity to present oral submissions to the court having lodged their written submissions. It does not appear to me that the sheriff did make this clear, and indeed in his note dated 3 July 2003 he says that on 11 February 2003 he "requested that the parties' agents provide written submissions which I explained they might speak to or expand if they wished". (In saying this, I am assuming for the present that it would indeed have been competent for the sheriff to dispose of the matter on the basis only of the written submissions and without affording parties an opportunity, if they so wished, to make oral submissions on the evidence).

[14] In these circumstances I consider that the sheriff fell into error in disposing of the question of expenses without giving parties an opportunity to be heard thereon. The pursuer's solicitor's primary submission in this event (with which the defender's solicitor concurred) was that the cause should be remitted back to the sheriff for reconsideration of the question of expenses. I cannot pretend that I think that this is an entirely satisfactory solution given that the sheriff has already expressed a view on the question of expenses. But the alternative course suggested by the pursuer's solicitor, namely that I should myself consider and dispose of the question of expenses, would be unsatisfactory too since I cannot pretend to have the same familiarity with the detailed circumstances of the case as the sheriff had. On balance I am persuaded that the better course would be to remit the matter back to the sheriff for reconsideration by him upon the basis that he can be relied upon to put his earlier decision on expenses out of his mind and to reach a fresh decision in light of such submissions as may be made to him by the parties' solicitors. Needless to say, Sheriff Mackenzie will have to deal with this matter personally. He has of course now retired, but he holds a commission as a part-time sheriff and I have confirmed with the sheriff clerk that arrangements may be made in due course to attend at the court to deal with the matter.

[15] I was addressed by parties' solicitors at some length on the merits of the sheriff's decision on the matter of expenses. But, since I am asking him to reconsider his decision, I do not think that it would be appropriate that I should rehearse these submissions, or my views upon them.

[16] Both parties' solicitors moved for the expenses of the appeal in the event of success. The discussion of the sheriff's wrongful deduction of the sum of £493 from the sum to be awarded to the pursuer occupied only a few minutes during the hearing of the appeal, the remainder of which was taken up by a consideration of the sheriff's decision on the question of expenses. The pursuer has been successful in having this decision set aside and I have therefore found the defender liable to him in the expenses of the appeal.

[17] In conclusion, I may say that this is not the first appeal which I have heard in which difficulties have arisen where written submissions have been made to the court and no oral hearing has followed. Depending upon the precise circumstances, I can see that nice questions of competency and fairness may arise where a procedure of this kind is followed. At the very least, it seems to me that, if written submissions are to be invited or ordered by the court, the interlocutor giving effect to this should make it clear what matters are to be covered by the written submissions and what opportunity there will be for oral submissions to be made after the lodging of the written submissions.