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Cite as: [2005] ScotSC 43

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Superdrug Stores Plc v. Network Rail Infrastructures Ltd [2005] ScotSC 43 (26 July 2005)

SHERIFFDOM OF GLASGOW AND STRATHKELVIN

SE368/04

JUDGMENT

SHERIFF PRINCIPAL ALASTAIR L STEWART, QC

in causa

SUPERDRUG STORES PLC

Pursuers;

against

NETWORK RAIL INFRASTRUCTURE LIMITED

Defenders:

__________

Act: S Nicoll, Advocate, and Parratt, Advocate, Instructed by Fyfe Ireland W.S.

Alt: Jamieson, Advocate, Instructed by MacRoberts, Solicitors

Glasgow 26 July 2005. The Sheriff Principal, having resumed consideration of the appeal, Answers questions of law 2, 3, 4, 8, 9 and 10 in the affirmative; Answers questions of law 1 and 14 in the negative; Declines to answer the remaining questions; Refuses the appeal; Adheres to the Sheriff's interlocutors complained of; Finds the pursuers and appellants liable to the defenders and respondents in the expenses of the appeal; Allows an account thereof to be made up and remits the same, when lodged to the auditor of court to tax and report; Certifies the appeal as suitable for the employment of junior counsel.

NOTE

Introduction
[1] This is an appeal from the decision of the sheriff following a preliminary proof in a summary cause. The action arises from the tenancy of shop premises of which the pursuers and appellants (hereinafter referred to as "the appellants") are the tenants and the defenders and respondents (hereinafter referred to as "the respondents") are the landlords. The action has been brought by the appellants in terms of the Tenancy of Shops Act 1949, section 1.

[2] In terms of section 1(1) of the 1949 Act a tenant who has received notice of termination of a tenancy may '.......... not later than the expiry of twenty-one days after the service of the notice ............ apply to the sheriff for a renewal of his tenancy'. Section 1(7) of the Act (as substituted) provides that an application under the section shall be made by way of a summary cause within the meaning of the Sheriff Courts (Scotland) Act 1971.

[3] The preliminary proof was held to determine whether the appellants' application to the sheriff had been made timeously. The parties agreed that if the application was made on 16 December 2004 it was timeous, but that if it was made after midnight on that date it was out of time. The sheriff held that the application had not been made until 17 December 2004. He therefore found that it had been made too late and dismissed the action. It is against that decision that the present appeal is taken.

The sheriff's findings in fact
[4] Findings in fact 1 to 14 are not relevant to the subject matter of this appeal. The succeeding findings are in the following terms omitting inessentials:-

"15. At some time in the course of the afternoon of 16 December 2004 Mr John Donnelly, an employee of ..... the pursuers' law agents ......tendered to a Summary Cause clerk the summons in the action and also a partially completed Form E200 in respect of that summons. A Form E200 may be used to pay the court fees if the firm presenting the initiating writ has a credit charging arrangement with the office of the Sheriff Clerk.

16. The clerk thereafter referred the case to a more senior colleague ..... Mrs Caroline Bain. The purpose of the referral was to allow Mrs Bain to check the terms of the summons. ...

17. She checked the summons to confirm that the pursuers' solicitors had completed it in accordance with the requirements of the Summary Cause Rules. As she did so she saw that someone in the department had stamped the first page of the summons with the pro forma stamp of the Sheriff Clerk's office marked 'Lodged' and dated 16 December 2004.

18. The summons complied with at least the minimum requirements of the Summary Cause Rules as to the form of the summons and the content of its accompanying statement of claim. Glasgow Sheriff Court was the court seized of jurisdiction over the intended action.

19. As she read the summons Mrs Bain noticed from paragraph 2 of the crave and paragraph 10 of the statement of claim that the termination date of the tenancy in question would occur on 7 January 2005. With that in mind she asked Mr Donnelly if he required a shortened period of notice because if so the summons would have to be placed before a sheriff.

20. Mr Donnelly replied that he could not appear before a sheriff. ...

21. Mr Donnelly thereupon made a telephone call ......... During that call he passed his phone to Mrs Bain. Mrs Bain spoke to a male who she assumed was a qualified solicitor in the office of the pursuers' law agents ....

22. The gist of her discussion with that person was that she asked him if the pursuers' law agents wanted a shortened period of notice because if so they would need someone to go before a sheriff.

23. There then followed a discussion about whether the law agents could get someone to court before 4.00 pm. That time was when normal business for the day concluded. After that time only exceptional and emergency applications would be dealt with that day.

24. The person Mrs Bain spoke to indicated that if she thought that such a hearing was required the law agents would be unable to get someone to appear before a sheriff by 4.00 pm but would be able to do that the following day and that it was likely that someone would be coming in the next day.

25. Mrs Bain did not say to the law agents that the summons had to go before a sheriff. She left that decision to the law agents.

26. After the call ended Mr Donnelly took the summons away.

27. On 17 December 2004 a solicitor from the pursuers' law agents brought the summons back to the Summary Cause department. The summons was placed before a sheriff to consider the pursuers' request to shorten the period of notice. Having heard from the pursuers' solicitor he granted that request to the extent of shortening the period of notice to seven days.

28. After that hearing Mrs Bain completed the administrative features of authenticating the summons. She changed the date on the pro forma stamp that had been fixed to the first page of the summons from '16' to '17' in black ink and initialled that change. She also completed the section on the stamp relating to 'Fee paid' and in particular added '£39', 'E200' and the number '480690'. The sum of £39 was the correct court fee for the summons. The number '480690' was the number on the Form E200 which accompanied the summons. The pursuers' law agents had completed the Form so far as they were required to do and had dated it 16 December 2004. A colleague of Mrs Bain, Miss McColligan, had completed the sheriff clerk's part of the Form on 17 December 2004. Mrs Bain added in her own hand the return day and the calling date in Box 6 of the summons. To do so she had to cross out the erroneous dates Miss McColligan had entered earlier that day.

29. That same day the summons was entered in the Register of Summary Causes ... Thereafter the summons was returned to the pursuers' law agents.

30. 17 December 2004 was the date of first deliverance of the action.

31. The summons was thereafter served on the defenders with an allocated return day of 30 December 2004 and calling date of 6 January 2005.

32. The pursuers applied to the sheriff beyond the period of time prescribed in the Act".

[5] The sheriff also found in law (1) that the pursuers applied to the sheriff beyond the period of time prescribed in section 1(1) of the Tenancy of Shops (Scotland) Act 1949, and (2) that the action was accordingly barred by passage of time.

The grounds of appeal
[6] The appellants lodged a note of appeal containing six points of law on which they wished the appeal to proceed. These were:-

"1. The sheriff erred in law in dismissing the action.

2. The sheriff erred in law in holding that the pursuer had applied outwith the time laid down in s. 1(1) of the Tenancy of Shops (Scotland) Act 1949.

3. It having been agreed that an application made on 16.12.04 would have been within the time allowed and it being accepted that the pursuers' summons was stamped as lodged with the stamp of the sheriff clerk and dated on 16.12.04, the sheriff erred in law in holding that the pursuer had not applied timeously.

4. The action now proceeding on the basis of the same summons, in the same form, as then presented on 16.12.04, the sheriff erred in law in having regard to matters occurring thereafter.

5. The sheriff erred in law in having regard to irrelevant considerations in having regard to what was said and what was not said in the course of the telephone call on 16.12.04 referred to at para [48 of the stated case] and the sheriff erred in law in having regard to what the sheriff regards as having been done or not done subsequently.

6. The sheriff erred in law in having regard to irrelevant considerations and at variance with the evidence in basing his decision at para [49 of the stated case] on the fact as asserted by the sheriff that Mr Donnelly left the sheriff clerk's department and took the summons with him and that the next day 'the pursuers' returned the summons to the office of the sheriff clerk - when there was no such evidence before the court.

I think that grounds 5 and 6 might have been more happily phrased. Their import is not immediately apparent.

[7] At the hearing on adjustments the appellants proposed thirteen questions of law based on the foregoing grounds of appeal. These were accepted by the sheriff. I have to say that I have found the meaning of several of these questions so obscure as to make it impossible for me to answer them. I shall comment further on the form of these questions at a later stage in this note. The questions were are follows:-

"1. On the facts found in Finding-in-Fact 17 that the summons was received by the sheriff clerk's office and stamped marked 'Lodged' and dated on 16 December 2004, did the sheriff err in law in holding that the pursuers had not applied timeously in terms of the Act?

2. On his interpretation of the Act and his construction of what constituted an 'application to the sheriff', and having regard to the terms of the parties' joint minute, should the sheriff have proceeded any further in his consideration of the evidence and in particular should he have taken cognisance of the evidence of Mrs Bain?

3. If, being satisfied that the act of authentication will always be after an 'application to the sheriff', was the sheriff correct to consider any of the evidence led at the preliminary proof relating to what occurred on 17 December 2004?

4. Was the sheriff correct to consider any of the evidence led at the preliminary proof in relation to payment of court dues and the evidence in relation to methods of payment all as relative to the events of 17 December 2004?

5. Esto the sheriff was correct to consider any of the evidence led at the preliminary proof, was he right to consider any of the evidence led in connection with the events of 17 December 2004, if he had accepted that nothing turned on the summons remaining in the custody of the sheriff clerk, the application having been made to the sheriff by the completed act of presentation of the summons?

6. Was the sheriff right to conclude that whether anything turns on the removal of a summons between presentation and re-presentation or authentication will be determined in each case in accordance with its own merits or was he correct following his previous reasoning that once the presentation has been made sufficient to amount to an 'application to the sheriff' then in terms of the Act the events thereafter are strictly irrelevant?

7. Was the sheriff correct in the circumstances to place any reliance on the evidence of Mrs Bain in determining what is purely a matter of statutory interpretation and further, given his analysis of the 'first issue' up to paragraph [35] (sc of the stated case) even though he accepted portions of Mrs Bain's evidence as reliable, was he correct to consider that that evidence was relevant in the matter for determination before him?

8. Was the sheriff right to conclude that the adminicles of evidence referred to in paragraph [36] (sc of the stated case) fall to be in any way assessed in the issue of determining the date of an 'application to the sheriff' following his previous reasoning?

9. Was the sheriff correct in law to find that the pursuers and appellants had applied to the sheriff beyond the period of time prescribed in the Act given his findings on what constituted an 'application to the sheriff' in terms of the Act and further was he correct in law therefore to consider that the action was time-barred?

10. Was the sheriff right to reach the conclusion on the balance of probabilities that the pursuers and appellants made their application to the sheriff on 17 December 2004 having already formed his view in his opinion on what consisted of an 'application'?

11. Was the sheriff right to attempt to divine the intentions of the party seeking to make the application without hearing from them in evidence, in construing the language of the Act?

12. Was the sheriff right to consider that what the pursuers' and appellants' agents thought, felt or conceived the time limit was, was of itself determinative in law of what constituted an application to the sheriff in terms of the Act?

13. Was the sheriff correct to conclude that in terms of the Act, it is possible to make an application to the sheriff in two stages or as a single act?"

[8] The respondents took advantage of the terms of Summary Cause Rule 25.1(5)(b) to raise a point of law which they wished to argue at the appeal. This resulted in the following question of law (no. 14):-

"Did the sheriff err in law in deciding that authentication of the summons did not determine the date upon which an application is made to the sheriff for the purposes of section 1(1) of the Act?"

The sheriff's reasons for his decision
[9] The sheriff did not accept the respondents' argument that it was the date of authentication which must be treated as the date of the application's being made to the sheriff. However, he was of opinion that no application had been made on 16 December. What had happened then was in effect a nullity. The summons which had been presented on that date was withdrawn and a new summons (albeit the same document) was presented on the following day.

Submissions for the appellants

[10] Mr Nicoll took me through the findings in fact. Findings 1-14 were uncontentious.

[11] Findings 15-26 dealt with the events of 16 December. Finding 15 was derived from the joint minute entered into between the parties at the preliminary proof. Finding 17 was derived from the evidence and the ex facie appearance of the summons itself. The stamp dated 16 December referred to in that finding was the beginning and end of the matter from the appellants' point of view. The remaining findings dealing with the events of 16 December related to the issue raised by the sheriff clerk of the possibility of reducing the period of notice, which would require the matter to be brought before a sheriff. Finding 15 demonstrated that the appellants had initiated proceedings by presenting the summons and paying the court dues. The appellants had tendered payment on 16 December. The actual date of payment was immaterial. That was a matter of housekeeping for the sheriff clerk. That could not regulate the timeous or non-timeous making of the application. The appellants had made the application by coming to court with proceedings in the appropriate form.

[12] In his approach to the case the sheriff had misapplied the law to the facts and reached the wrong result. An 'application' was something done by the appellants and matters arising subsequent to that could be characterised as matters of housekeeping or process management by the court.

[13] Findings 27-32 dealt with events of 17 December. These were not relevant looking to the correct interpretation of the statutory provisions.

[14] Finding 27 was not justified. There was no basis for the finding that the summons was brought back as there was no evidence that it had been taken away.

[15] Finding 28 showed that the sheriff clerk had altered the original form of date stamp. This was irregular and could not be allowed to be of any moment to a process that was already under way by that stage. Whatever the sheriff clerk may have purported to do, it could not be effective to alter the existing position. What was placed before the sheriff was a summons stamped as having been lodged on 16 December. The reason why the date was changed from 16 to 17 December was neither explained nor explored. The fact of the change, the reason for it and the completion of the 'Fee Paid' part were only matters of housekeeping by the sheriff clerk and not matters relevant to the making of the application as contemplated by the statutory provision.

[16] The sheriff found that the Form E200 had been completed by the appellants' agents and dated 16 December. That confirmed that the appellants had, on 16 December, done all required of them in order to make an application. There was therefore no proper basis for the sheriff clerk to change the date. The summons had been lodged on 16 December and could not properly be described as having been lodged on 17 December. The sheriff had accordingly misdirected himself. He had come to the conclusion that there had been two separate acts of presentation, which could not be the case. There might well have been a separate act on 17 December in the form of placing the summons before a sheriff for a reduced period of notice, but this was not the making of an application as contemplated by the statute. The sheriff's finding was incompatible with a correct legal analysis of what actually took place.

[17] Findings 29 and 30 were irrelevant to the issue in the case. The date of registration and the date of deliverance were not the same as the date of application.

[18] Paragraphs 45-52 of the stated case set out the sheriff's reasoning for reaching the decision which he did. Paragraph 48 (in which the sheriff concluded that the appellants had not, on 16 December, requested a hearing before a sheriff in order to obtain a shortened period of notice) was speculation on the sheriff's part. It was not supported by the findings in fact.

[19] The sheriff had attempted to reconcile the irreconcilable because it was not possible to have a summary cause summons with two dates of presentation. Nothing had changed between what had been presented to the sheriff clerk on 16 December and what was placed before the sheriff on 17 December.

[20] Finding 15 was a sufficient basis to entitle the appellants to say that what happened on 16 December was a presentation on that date.

[21] The sheriff made no finding as to what happened to the Form E200 between 16 and 17 December. It was implicit in the findings in fact that that form must have remained with the sheriff clerk. There was no presentation of the form on 17 December. That had been done the previous day.

[22] The sheriff had been led into error by the mistaken view of the sheriff clerk that the summons had been lodged on 17 December. This had not been the view of the sheriff who had shortened the period of notice on 17 December.

[23] Even if the application had not been completed on 16 December that did not matter. It might be that there was a two stage process, begun on 16 December and completed on 17 December.

[24] The sheriff was wrong to conclude (as he did in the last sentence of paragraph 50 of the stated case) that the appellants 'withdrew' the summons on 16 December. The findings in fact did not justify that conclusion. For that to have happened the sheriff clerk would have had to cancel the date stamp on that date. That would have made it obvious to anyone what the situation was. As that was not done the application could not have been held to have been withdrawn. If the summons was not withdrawn on 16 December it could not (as stated by the sheriff in paragraph 51 of the stated case) be presented of new on 17 December. The sheriff's conclusion could accordingly not be supported.

[25] Counsel then turned to the terms of the 1949 Act, section 1(1). There was no direct authority on what was meant by 'apply', but there were authorities dealing with other statutory provisions which afforded some assistance.

[26] Secretary of State for Trade and Industry v Josolyne 1990 SLT (Sh. Ct) 48 is a decision of Sheriff Principal Ireland in an application under the Company Directors Disqualification Act 1986, section 7, for disqualification of the respondent from being a director of a company. In terms of section 7(2) such an application (which in the sheriff court is in the form of a summary application) must, except with the leave of the court, be made within two years of the date upon which the company of which the person is or has been a director became insolvent. In this case the application was lodged in court within the two years period but was served on the respondent outwith that period. The sheriff principal held that the tempus inspiciendum was the date of lodging and not the date of service and that the application was accordingly not time-barred. At p. 49 I the learned sheriff principal states:

"What must be done within the two year limit under s. 7(2) is that the applicant must make an application to the court. When, as happened in this case, the solicitor for the Secretary of State presented the initial writ to the sheriff clerk ... then, according to the ordinary meaning of the words, he made an application to the court, and was within the time limit. Neither the act of the sheriff in making the order for service nor the service of the initial writ on the respondent can properly be described as the making of the application to the court. These are events which are consequential on an application which has already been made."

[27] Secretary of State for Trade and Industry v Normand 1994 SLT 1249 is a decision of Lord Sutherland in the Outer House. It is also concerned with an application under the Company Directors Disqualification Act 1986, section 7. In the Court of Session such an application is made by way of petition. Here the petition was presented within the two years time limit but the interlocutor granting a first order for service was not pronounced until after the expiry of that period. The Lord Ordinary, following the case of Josolyne, held that the application was not time-barred. His Lordship states (at p. 1251D):

"There is no doubt that in an ordinary action the date of commencement of the action is the date of citation of the defender. In an ordinary action, however, the court is not involved until such time as the summons is lodged for calling. That being so, the action cannot be commenced by some unilateral action on the part of the pursuer where no formal intimation has been made to the defender and where the court has not been involved. The position, however, is different in petition procedure. Under that procedure the petition is lodged in court and then ... the case will automatically be put before a Lord Ordinary in order that a first order may be pronounced. From the moment the petition is lodged the rest of the procedure follows automatically. I therefore find myself in complete agreement with Sheriff Principal Ireland when he says that the order for service and the service on the respondent are merely events which are consequential on an application which has already been made. Section 7(2) is concerned, not with the convening of a respondent into the process, nor with the commencement of an action as that is understood in ordinary procedure. What s. 7(2) is concerned with is an application to the court and it is the date of that application that is relevant. In my opinion, there can be no doubt whatever that under the ordinary meaning of words 'an application to the court' must be the date upon which the petition is lodged in court."

[28] Secretary of State for Trade and Industry v Lovat 1997 SLT 124 is a decision of the Second Division, also dealing with an application under the 1986 Act. Counsel mentioned it because the case of Josolyne is referred to with approval in the opinion of the court.

[29] Secretary of State for Trade and Industry v Campleman 1999 SLT 787 is a decision of Lord Johnston in the Outer House. Again it is a case dealing with an application under the 1986 Act. The Lord Ordinary held inter alia, following the cases of Josolyne and Normand that the application was made as soon as the petition was presented. At p. 789F-G he states:

"The general line of reasoning, with which I am in complete agreement, is that in respect of actions initiated by summons or initial writ, there is no conjoining of parties so as to involve the court's jurisdiction until the defender has been cited by service, which is a unilateral act effected by the pursuer upon obtaining the necessary warrant, be it from the sheriff court or under the signet. However, with regard to petitions they are directly under the control of the court from the moment they are presented. A conjunction is not necessary in the sense of delaying any power of the court until such time as the petition has been served. If that were not sufficient, it seems to me in any event as a matter of statutory interpretation that when an application is 'made' by petition that step is complete as soon as it is presented to the court."

[30] Borthwick v Bank of Scotland 1985 SLT (Sh. Ct) 49 is a decision of Sheriff Principal Caplan (as he then was) dealing with an application under the Tenancy of Shops (Scotland) Act 1949, section 1. The facts of the case are not directly relevant to the present case, but counsel referred me to it for certain dicta of the learned sheriff principal to the effect that the exact form in which an application is made may be irrelevant provided that it is clear what remedy is sought.

[31] Counsel also referred me to the terms of the Summary Application Rules 1999 and in particular to rules 2.6(1), (2) and (3) which refer to an application being 'lodged'.

[32] Counsel submitted that all these authorities supported his contention that the application had been made on 16 December and was therefore in time. He invited me to answer question of law 1 in the affirmative and remaining questions in the negative subject to certain variations in respect of questions 4 and 6. He conceded that there was no need to answer question 13 which I had indicated to him I found incomprehensible.

Submissions for the respondents
[33] Mr Jamieson began by stating that his submission fell into two parts: first, that an application was not made until the summons had been authenticated; secondly, if that were not accepted, on the basis of the evidence led before the sheriff it was clear that no application had been made on 16 December but that the application had been made on 17 December. He stated that he took no issue with any of the findings in fact nor with the inferences drawn therefrom by the sheriff nor with the sheriff's analysis of the evidence at paragraphs 46-49 of the stated case.

[34] Dealing with the first part of his submission, viz that an application was not made until the summons had been authenticated, counsel submitted that the Summary Cause Rules provided a system for dealing with summonses. There was no reference to 'tendering' in the Rules. He referred me in particular to rules 4.1, 4.2. 4.3 and 4.4. Looking to these rules the events of 16 December amounted to nothing at all. The fate of the summons on that date did not depend on anything done by the sheriff clerk. It depended entirely on what was done by the representative of the appellants' agents.

[35] Having regard to the structure of Chapter 4 of the Summary Cause Rules which dealt with the commencement of a summary cause action, authentication was a prerequisite, especially if the period of notice was to be altered. An application was made at the point of authentication because it was from that point that the rest of the procedure in the case followed.

[36] Counsel referred me to the note by Sheriff Peebles QC in the unreported case of Network Rail Infrastructure Ltd v Superdrug Stores PLC, Glasgow Sheriff Court 15 March 2005, a case between the same parties as the present and arising from the same tenancy agreement. At pp. 15 to 16 of his note the learned sheriff gives his opinion that authentication of the summons is the point where a party 'applies' to the sheriff in a case under the 1949 Act, section 1. In his opinion on appeal in the same case (Glasgow Sheriff Court 29 April 2005, unreported) Sheriff Principal Bowen expresses sympathy with that point of view.

[37] Counsel submitted further that payment of fees was an important matter in this connection. Mrs Bain had given evidence that without payment of a fee nothing could be done to process an application. Payment of fees was regulated by statutory instrument, viz the Sheriff Court Fees Amendment Order 2002. Counsel referred me to the case of Muir v Muir 1994 SCLR 182 (a decision of my own when sitting as a sheriff in Dundee Sheriff Court) as an example of a case where it had been held that lack of payment of a fee meant that no action could be taken. In the present case the findings in fact made it clear that payment of the fee took place on 17 December - the date on which the summons was authenticated. There was no payment of a fee on 16 December.

[38] It must be wrong to suggest that simply turning up at the counter of the sheriff clerk's office and tendering or presenting a document could take a person any way towards making an application. Counsel referred me to Macphail's Sheriff Court Practice (2^nd edition) at paragraph 1.23. Nothing could happen on 16 December because no payment had been made.

[39] Counsel then turned to the second part of his submission. Mrs Bain had been the only witness in the case. The rest of the evidence had been agreed by joint minute. Mrs Bain had been criticised by counsel for the appellants as having acted in an 'inappropriate' manner which had led the sheriff into error. It had never been put to Mrs Bain that she should not have altered the date on the summons. It had not been an issue at the preliminary proof that what had happened in that regard had been in any way inappropriate. Counsel for the appellants had submitted that, as a matter of law, it was not open to Mrs Bain to alter the date because this amounted to an alteration of the process. But until 17 December there had been no process.

[40] The evidence, as narrated in the findings in fact, was to the effect that the summons had been taken away on 16 December without anything having happened apart from a date stamp having been affixed to it. There had been no refusal to authenticate. Everything that had happened or not happened was the result of a decision taken by the appellants' law agents. If the period of notice had not been shortened the ish would have expired before the case called in court. That was no doubt why the appellants' agents decided to seek a shortened period of notice, but the decision to do so was theirs. The date '16 December' had been overwritten. Therefore for the purposes of this process the date of presentation was 17 December. Counsel for the appellants had suggested that the respondents were being opportunistic. In fact it was the appellants who were being opportunistic and clutching at straws.

[41] Counsel then dealt with the authorities referred to by counsel for the appellants. He submitted that, while at first blush they offered a considerable measure of support to the appellants' position, they could all be distinguished on their facts from the present case. None dealt with the specific issue in this case, viz the precise date when an application was made.