Scottish Sheriff Court Decisions

Court Ref. No. 3064/02

Edinburgh, 25 April, 2005. The sheriff principal, having resumed consideration of the appeal, allows same; recalls the sheriff's interlocutor of 13 September 2004; appoints the cause to an options hearing on June 2005 within the Sheriff Court House, Edinburgh; certifies the appeal as suitable for the employment of junior counsel; finds the pursuer's solicitors personally liable to both parties in the expenses of the options hearing of 13 September 2004 and of the appeal; appoints parties to make up an account of said expenses and remits the same to the auditor of court to tax and report.

In this action the pursuer craves payment of damages of £750,000 in respect of injuries which she claims to have suffered as a result of the negligence of the defender, or those for whom he is responsible, on 23 September 1999. By interlocutor dated 13 September 2004 the sheriff "in respect of no appearance by the pursuer at today's hearing" dismissed the cause and found the pursuer liable to the defender in expenses. The pursuer now appeals against that interlocutor.

Mr Kelly, counsel for the appellant, began by stating that the pursuer's solicitors recognised that they had made mistakes and they offered apologies. They had intended no disrespect to the court.

Counsel then took me through the history of the case. He explained that, following her injury on 23 September 1999, the pursuer had had mental problems and had received psychiatric counselling. She was represented by the Scottish Police Federation, and they had authorised the raising of the action in September 2002 to protect the pursuer's position as the triennium was running out. The action had been sisted partly because of the pursuer's mental condition and partly to enable parties to carry out investigations. Eventually the defender lodged a motion to have the sist recalled. At first the pursuer's solicitors sought to oppose that motion as the pursuer was still seriously ill, and consideration of the motion was continued from 4 June 2004 until 2 July 2004. By that date the motion was no longer opposed, and it was granted with the usual timetable being set. Defences were to be lodged by 16 July and an options hearing was fixed for 13 September.

At the calling of the motion on 2 July the pursuer was represented by a local correspondent acting on behalf of her principal agents, who were a firm of Glasgow solicitors. This correspondent wrote to the principal agents informing them of what had happened. This letter, which gave the relevant dates, was received by the principal agents, but the date of the options hearing was not entered into their court diary. It was from this simple error that the unfortunate consequences flowed which resulted in the dismissal of the cause.

In the office of the pursuer's solicitors the pursuer's case was being dealt with by one of the partners, Mr Foster. To assist him Mr Foster had a qualified assistant and two secretaries. There was a system of dealing with diary entries which had three lines of defence. First, when correspondence (such as the letter from the Edinburgh correspondent) came into the office, it was given to a secretary for her to enter dates in the diary. Secondly, detailed file and diary checks were carried out each month. These checks were normally done by the qualified assistant. Thirdly, every Wednesday, unless overridden by court appearances or some emergency, Mr Foster himself received all files for a period of six weeks ahead. The present case, unfortunately, slipped through the net.

The failure was at stage 1 of he process. When the correspondent's letter came into the office one of the two secretaries was on holiday. It had to be assumed that the remaining secretary failed to enter the date of the options hearing into the diary because of pressure of work. Thereafter there should have been two diary checks carried out before the date of the options hearing, but neither was done. This was because the qualified assistant was suffering from a depressive illness. She was in hospital for two weeks in June 2004. She then returned to work as both she and her doctors thought that it would be beneficial for her to do so. Her employers agreed that her return to work would be on the basis that, if things became too much for her, she would be able simply to go home. In fact there were some days when she did not feel fit to attend work at all, and there were other days when she was unable to work for a full day. This put other people in the office under great pressure. Then the assistant was on holiday from 23 August until 6 September.

Mr Foster himself was unable to carry out the diary checks because of sheer pressure of business. He took two days' holiday in July, and there were also two public holidays during that month. There were only six days in July when Mr Foster was not in court. Mr Foster was also covering a branch office part time as the person normally in charge of that office was on holiday. Mr Foster was on holiday for the first two weeks of August. Thereafter he had further heavy commitments both in court and elsewhere.

The result of all these factors was that the stage 2 check on the case was never carried out. The stage 3 check on Wednesdays depended on a case actually being in the diary, and, as this had not occurred here, this stage was irrelevant.

Counsel referred me to two letters dealing with the action, dated respectively 9 and 10 September 2004, which had been faxed by the defender's solicitor to the pursuer's agents for the attention of Mr Foster. He pointed out that 10 September was the last business day prior to the options hearing in the case. On both these dates Mr Foster had been in court. When he returned from court on 10 September there were clients waiting to see him. He therefore did not see the faxed letters.

There had been no wilful disregard of the rules by those acting for the pursuer. The initial mistake had been compounded by a combination of illness, holidays and pressure of business. When the defences were intimated to the pursuer's solicitors they had written to the pursuer herself. The pursuer had not responded. The case had then in effect dropped out of sight.

The pursuer's solicitors were guilty of two defaults: a failure to lodge a record; and a failure to appear at the options hearing. In terms of Rule 16.2 of the Ordinary Cause Rules the sheriff had a discretion as to how such defaults should be dealt with. The factors which the sheriff should take into account were detailed in Macphail's Sheriff Court Practice (2^nd edition) (hereinafter referred to as "Macphail") at paragraphs 14.09 and 14.10.

The sheriff's note at pages 1 and 2 indicated that he had failed to exercise his discretion. He stated that he had no alternative but to dismiss the action. It should have been obvious to the sheriff from earlier interlocutors that the pursuer had previously been represented by solicitors and that they had taken an active part in the continuation of the motion to recall the sist. The sheriff appeared to regard the only alternative to dismissal as being adjournment until later in the day. In fact he could have adjourned the hearing until a later date, which would have been intimated to the pursuer's solicitors, or he could have asked the sheriff clerk to make inquiries. If he had taken either of these courses he would have heard an explanation for the defaults. This would have provided him with material which would have enabled him to decide whether or not to exercise his discretion in favour of the pursuer. At the foot of page 2 of his note the sheriff actually stated that, if the information which was contained in the note of appeal had been available to him on the day of the options hearing, he would not have granted decree by default..

In his note the sheriff appeared to say that the fact that the action was now time-barred was not a factor which would make it more or less appropriate to dismiss the action. In fact, the effect of dismissal on such an action was a very important factor to which weight should have been given. Counsel referred me to Price v Fernando (Sh. Ct) 1995 SCLR 23, a decision by Sheriff Principal Risk, and especially to what the learned sheriff principal said at pages 26, 27 and 28 He also referred me to the commentary on the case at page 29. In the present case the sheriff had failed to apply the correct test and had ignored factors which he should have taken into account.

In his note the sheriff apparently said (at the foot of page 3) that the exercise of discretion was a matter for the appeal court rather than for the court of first instance. In Macphail, however, it was stated that a court of first instance should apply the same principles as an appeal court. The case should have been continued to enable the pursuer's solicitors to appear in order to explain the situation.

Counsel then referred me to a number of authorities. These were: Saleem v Hamilton District Licensing Board 1993 SC 175; McGowan v Cartner (Sh. Ct) 1995 SCLR 312; 1996 SLT (Sh. Ct) 10; Colonial Mutual Group (U.K. Holdings) Ltd v Johnston (Sh. Ct) 1995 SCLR 1165; Secretary of State for Trade and Industry v Stephen 2003 SLT (Sh. Ct) 29; and Canmore Housing Association Ltd v Scott 2003 SLT (Sh. Ct) 68. He submitted that on the basis of that line of authority the sheriff's approach had been flawed. He had failed to give weight to the effect which dismissal would have on the pursuer's claim. He had said that he had no alternative to dismissal because he had no information. That ignored the latest line of authority. The two most recent cases referred to were binding on the sheriff as they were decisions of the sheriff principal of this sheriffdom.

In these circumstances the matter was open to review by the sheriff principal. In any event, even if this was not correct, it was open to the sheriff principal to exercise his discretion in favour of the pursuer.

Counsel referred me to a number of further authorities. These were: Wanderers World Ltd v Marco's Leisure Ltd 2000 SLT (Sh. Ct) 79; M'Kelvie v Scottish Steel Scaffolding Co. Ltd 1938 SC 278; Graham v Wylie & Lochhead, Second Division, 17 November 1949, unreported, referred to in Differ v G.K.N. Kwikform Ltd 1990 SLT (Sh. Ct) 49; DTZ Debenham Thorpe v I Henderson 1995 SC 282; Group 4 Total Security v Jaymarket Developments 1996 SLT (Sh. Ct) 61; De Melo v Bazazi 1995 SLT (Sh. Ct) 57; and Macphail, paragraphs 14.11 and 14.12.

Counsel invited me to distinguish De Melo where there had been a whole catalogue of errors and where the court held that there was prejudice to the defender. In the present case there had been only the one error, viz the failure to enter the date of the options hearing in the diary. And here any prejudice to the defender caused by allowing the appeal was far outweighed by the prejudice to the pursuer caused by having the action dismissed. In any event, in the Court of Session the pursuer's appeal in De Melo had been allowed of consent, and it was therefore doubtful to what extent that case was really authority.

The only avenues open to the pursuer if the decree of dismissal stood would be either to re-raise the action seeking to invoke the court's discretion in terms of the Prescription and Limitation (Scotland) Act 1973, section 19A, or to raise an action against her present solicitors on the ground of their negligence. An application under section 19A would be unlikely to succeed. A claim against the solicitors would be a claim of a different nature and would be less valuable than the present claim.

The pursuer's claim was prima facie good. It was not frivolous. It was true that the defenders had lodged a Rule 22 note challenging the relevancy of the pursuer's pleadings, but the pursuer had not adjusted her pleadings at all, and the initial writ had been prepared as a matter of urgency. The relevancy points could be met. In fact a minute of amendment had already been prepared. The pursuer's injuries were serious as was reflected in the amount of the sum craved. She had had to resign from the police and was now unfit for work.

If the appeal were to be refused the pursuer would for ever lose her opportunity to take the case forward. The default had nothing to do with her personally. Counsel referred me to Burtonport Fishermen's Co-operative v Unkles (Sh. Ct) 1994 SCLR 844 and in particular to the factors stated by the sheriff principal (at p. 846 B-E), under reference to Macphail (1^st edition) as being those to be considered when deciding whether to grant decree by default. He submitted that most of these factors operated in the pursuer's favour in the present case. The prejudice to the defenders if the appeal were allowed would be minimal. If the appeal were refused the defender would have a windfall advantage. The pursuer's solicitors were prepared to pay the expenses of the options hearing and of the appeal and any other expenses which the court considered appropriate.

On the whole matter the appeal should be allowed, the interlocutor of 13 September 2004 should be recalled and a new options hearing should be fixed. This could be at an early date, or a period for adjustment could be allowed. The pursuer's solicitors should be found personally liable in the expenses.

Mr Gardner, counsel for the respondent moved me to refuse the appeal and adhere to the sheriff's interlocutor. He justified this motion on two grounds: first that the reason for the default was more than just a minor mistake; secondly the pursuer's pleadings as they appeared on paper at present might not amount to a prima facie case. Counsel said that he would address me under five separate heads: (1) the factual background to the case; (2) the nature of the case; (3) the authorities governing the legal approach; (4) the application of the facts of the case to the legal approach; (5) a response to the previous speech.

1. The factual background.

The action was raised in September 2002 and was sisted in October 2002. Between June 2003 and November 2003 the defender's solicitor wrote on several occasions to the pursuer's solicitors asking them to confirm the position as regards progressing the case. The motion to recall the sist had been continued from 4 June 2004 to 2 July 2004 in order to allow the pursuer's solicitors to obtain instructions. On 2 July the sist had been recalled and the timetable for the case fixed. Defences were timeously lodged on 8 July. Counsel then referred to documents which had been produced for the appeal on behalf of the respondent. First was a letter dated 18 August 2004 from the defender's solicitor addressed to the pursuer's solicitors. This enquired whether the pursuer would agree to the case proceeding under the additional procedure. Secondly was a fax dated 9 September 2004 intimating the Rule 22 note. Thirdly, was a faxed letter dated 10 September 2004 reiterating the intention to move for additional procedure and seeking a mandate for recovery of the pursuer's medical records. This letter has the date of the options hearing clearly stated in the heading. Fourthly, a fax transmission sheet dated 10 September 2004, and fifthly a letter enclosing a further copy of the Rule 22 note, this letter being referred to in the fax transmission sheet. Counsel submitted that these productions disclosed several opportunities for the pursuer's solicitors to be reminded of the date of the options hearing. In addition the pursuer's solicitors had had the report from their Edinburgh correspondent following the recall of the sist as well as intimation of the defences. The receipt of defences in an ordinary cause action should ring alarm bells about timetabling. It was not only the options hearing that had to be taken into account but also the adjustment period. It was therefore not correct to say that the only error had been a simple failure to make a diary entry.

2. Nature of the case

The pursuer's case was based on an averment that the police had knowledge of the propensities of the person who had caused the pursuer's injuries. Her whole case was perilled on this particular knowledge. Article 5 of the condescendence contained only a fleeting reference as to how this knowledge was obtained. On paper the case was woefully lacking in an explanation of how the police could possess this knowledge.

3. Legal Approach

Counsel accepted that where the error causing the default was minor and where there was a prima facie case, the court should be reluctant to deny a party an opportunity to present his or her case. However, there was a clear dividing line between, on the one hand, a minor error and, on the other hand, a total disregard for or a failure to have any proper regard for the rules of procedure. In the latter case the court should be reluctant to repone a party. Counsel referred me to Niven v Holmes 1979 SLT (Sh. Ct) 15 as an example of a case where the sheriff principal had upheld a sheriff's decision to grant decree by default. He also referred me to Stewart v McDaid (Sh. Ct) 1987 SCLR 342 in which Sheriff Principal Caplan (as he then was) said, "I think that the court has to be satisfied that the default was truly due to inadvertence rather than the deliberate employment of dilatory tactics or a total disregard for the need to comply with the regular procedures." In that case the sheriff principal upheld the sheriff's decision to grant decree by default on the part of the defender who had failed timeously to lodge defences and was able to produce only skeleton defences when the case called. Counsel submitted that in the present case the double default on the part of the pursuer's solicitors showed a total disregard for the normal rules of procedure. He referred me to M'Kelvie v Scottish Steel Scaffolding Co. Ltd 1938 SC 278 as authority for the proposition that, for a default to be excused, the defaulting party must have a prima facie case.

4. Application of the facts of the case to the legal approach

The options hearing was the cornerstone of sheriff court ordinary cause procedure. Any intimation that an options hearing is looming should ring alarm bells in a solicitors' office. Counsel took no issue with the explanation given as to how the series of errors came about, but a system which relied so much on an initial diary entry was not adequate. It depended on a person who was not a qualified solicitor taking the crucial initial step. Such a responsibility should not be delegated. Counsel conceded that his submission on the lack of a prima facie case was not his strongest point, but it was none the less questionable whether there was such a case.

5. Response to submissions for the pursuer

As the sheriff had observed, this was quite an exceptional situation. There was a double default. There was no precise authority in point.

The cases referred to be counsel for the pursuer dealing with summary applications should be distinguished from ordinary cause actions where a strict timetable existed and where the options hearing was the cornerstone. It was going much too far to suggest that the sheriff must always give a party an opportunity to appear (per Sheriff Principal Nicholson, QC in Wanderers World Ltd v Marco's Leisure Ltd 2000 SLT (Sh. Ct) 79 at 82B).

Counsel for the pursuer had misinterpreted the sheriff's note at pp. 2-3. The sheriff was explaining why he had chosen to dismiss the action rather than to grant absolvitor, not why he was choosing to dismiss rather than allow the action to continue. The sheriff did not have the information which was now available.

If the pursuer's appeal were refused, the pursuer's claim would not disappear as she would have a claim against her present solicitors. She would be likely to obtain some damages.

The interests of the pursuer and those of the defender had to be weighed against each other. If the appeal were allowed, the defender would be prejudiced because of delay, causing loss of evidence.

In a brief reply Mr Kelly pointed out that four of the five documents produced by the defender were dated 9 or 10 September 2004, the last two business days before the options hearing and days when Mr Foster was heavily engaged. The final document had not in fact arrived until after the options hearing.

The pursuer's case was not in fact perilled on special knowledge. There would also be a case based on statutory liability under the Police (Scotland) Act 1967, section 39. In any event the pursuer's solicitors had prepared a minute of amendment amplifying the pleadings. There was ample in the pleadings for a case of vicarious liability.

The cases of Niven v Holmes and Stewart v McDaid referred to by counsel for the respondent did not arise from a situation where dismissal would result in a case being time barred. Counsel referred me to Macphail, paragraph 12.09 and to the reference to "serious injustice" in DTZ Debenham Thorpe v I Henderson. He referred me again to Price v Fernando and De Melo v Bazazi. The most important factor in the present case was the consequence for the pursuer if the decree of dismissal were not recalled.

The pursuer might have a remedy against her solicitors, but such a claim was usually less valuable than the original reparation action. In considering any settlement in such a case a pursuer's solicitor had to consider the risk in two actions rather than one. It would not be fair to the pursuer to force her to raise a fresh action because of her solicitors' fault.

In the passage in the sheriff's note dealing with why he considered dismissal to be the appropriate disposal he seemed to be saying that the should not take into account the consequences of such a disposal. That should in fact have been at the forefront of his mind.

There can be no doubt that the pursuer's solicitors have been sadly at fault here. I agree with what counsel for the respondent said, that a system which is so much dependent on a single diary entry leaves a good deal to be desired. I consider too that the solicitors are open to criticism for having failed to take steps to take account of absences from work of their staff and pressure of work on particular individuals. However, that does not necessarily mean that the consequences of the solicitors' defects should be visited on the pursuer personally. The question must be what is in the broad interests of justice.

I have reached a clear conclusion that these interests require that I should allow this appeal. If the decree of dismissal were to stand, the pursuer would be in a most invidious position. Her chances of raising a fresh action and successfully invoking section 19A of the 1973 Act would be minimal. While it is probable that an action against her present solicitors would eventually result in her obtaining an award of damages, this would be likely to be only after a very considerable delay. In my opinion, it would be unjust that the pursuer, who is herself blameless, should suffer because of her solicitors' errors.

I have a good deal of sympathy with the sheriff. He was presented with a situation where it might be thought that the pursuer's solicitors had lost interest in the case. They had not adjusted their pleadings, they had failed to lodge a record, and they were absent from the options hearing. It is easy to see why the sheriff acceded to the defender's motion for dismissal. However, I consider that the sheriff should have had more regard to the past history of the cause. It should have been reasonably apparent that the action had been raised because the time bar was fast approaching. The interlocutors make it clear that the pursuer was represented at the time of recalling the sist. Looking to the substantial sum craved and the nature of the action as well as the fact that the pursuer's solicitors as named on the process folder are a well known firm of Glasgow solicitors, the sheriff might perhaps have considered taking more steps than he did before granting dismissal. I have to say too that I think that the defender's solicitor might have been able to give the sheriff some indication to the effect that the defender had no reason to believe that the pursuer was not wishing to insist in the action.

I am very clearly of opinion that the sheriff failed to give sufficient weight to the consequences for the pursuer personally of his decision. While it is going too far to say that a sheriff should never grant decree of dismissal by default in a case where the time bar has passed, it is, in my opinion, a step which should be taken only after careful consideration and when in possession of all the available facts. As the sheriff here freely concedes, he was unaware of the facts which have been put before me. He goes so far as to say that, had he been aware of these facts, he would not have granted decree of default then and there but would have continued the case. He is to be commended for his frankness.

It is important that this case should be placed back on the rails as soon as possible. I have recalled the sheriff's interlocutor and directed that there should be a further options hearing after the parties have had a period of some four weeks in which to make adjustments.

So far as expenses are concerned, I have no hesitation in certifying the appeal as suitable for the employment of junior counsel. I benefited greatly from counsel's submissions on both sides of the bar. Counsel for the pursuer very properly accepted that those instructing him should be found personally liable in expenses. In my opinion it is appropriate that they should pay the expenses not only of the appeal but also of the options hearing. I have taken the rather unusual step in my interlocutor of finding the solicitors liable for payment of the expenses not only of the defender but also of their own client. It would not be fair that the pursuer herself or the Scottish Police Federation should be out of pocket because of the fault of the solicitors.