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Cite as: [2005] ScotSC 58

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Graeme Fraser & Company v. Donaldson [2005] ScotSC 58 (08 September 2005) SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT INVERNESS

A671/03

		JUDGEMENT of SHERIFF PRINCIPAL SIR STEPHEN S T YOUNG Bt QC
		in the cause
		GRAEME FRASER & CO
		Pursuers and Respondents
		against
		LYNNE DONALDSON
		Defender and Appellant

Act: Mr Robert McDonald, solicitor, Stronachs, Inverness

Alt: Party

Inverness: 8^th September 2005

The sheriff principal, having resumed consideration of the cause, refuses the appeal and adheres to the interlocutor of the sheriff dated 11 March 2005; finds the defender and appellant liable to the pursuers and respondents in the expenses of the appeal 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; quoad ultra remits the cause to the sheriff to proceed as accords.

Note

[1] In this case the pursuers and respondents are chartered accountants. They sought decree against the defender and appellant for payment of the sum of £1,638.25 with interest and expenses. This sum of £1,638.25 was said to be the outstanding balance of an account in the sum of £2,338.25 which the pursuers had rendered to the defender in respect of professional services. It was not in dispute that the defender had paid £700 towards the account.

[2] The legal basis of the pursuers' claim was focused in their first plea-in-law which read:

The pursuers having rendered services to the defender in terms of the parties' contract and being entitled to reasonable remuneration therefor quantum meruit and the sum sued for being reasonable all as condescended upon the pursuers are entitled to decree as craved.

The pursuers tabled two further pleas-in-law directed to the relevancy of the defences. For present purposes it is unnecessary to repeat these at length.

[3] In response to the pursuers' claim the defender tabled two pleas-in-law. These read:

The pursuers not having provided services to the order of the defender as condescended upon decree should be refused and the defender assoilzied from the crave of the initial writ.

The pursuers having reached agreement with the defender in respect of the amount of their charges are not entitled to decree in the sum sued for.

[4] In support of her second plea-in-law the defender incorporated the following averments in her answer 2:

On receipt of the initial writ in this action the defender telephoned Graeme Fraser to discuss the amount of the outstanding balance due and it was agreed between the said Graeme Fraser and the defender that the total charges would amount to £1200. The said Graeme Fraser was asked to confirm in writing the terms of the agreement between the parties on three separate occasions during the telephone conversation but he refused to commit the agreement to writing but stated that "he was a man of his word". The defender issued a cheque for £710 representing the balance due of £1200 plus VAT in accordance with the agreement which she had reached with the said Graeme Fraser.

[5] In article 2 of the condescendence the pursuers admitted that the defender had telephoned Graeme Fraser after service of the initial writ to discuss the outstanding balance of their fees. But otherwise they denied the defender's averments in answer except insofar as coinciding with their own averments. They explained and averred that:

On or about 4 December 2003 the defender telephoned Graeme Fraser and discussed with him the outstanding balance of the pursuers' fees. Graeme Fraser agreed to accept a further payment of £1400 in full and final settlement of his outstanding fees, interest and judicial expenses. On 4 December 2003 the defender wrote to the pursuers tendering a cheque for £710 in settlement of the pursuers' claim. The defender's letter did not accurately record the agreement of the parties.

[6] In due course a diet of debate was assigned to take place on 2 November 2004. Both parties were represented before the sheriff that day by their respective solicitors. The outcome of the hearing was that the sheriff pronounced an interlocutor in the following terms (sic):

The Sheriff, on joint motion Discharges the diet of Debate assigned for today, and on the Defender's motion of consent Repels the Pursuers second and third plea in law and the Defenders first plea in law; on the Pursuers motion of consent Ordains the Defender to lead at the Proof; allows parties a proof of their respective averments and assigns as a diet 17 January 2005 at 10.00 a.m. Within the Sheriff Court House, The castle, Inverness; orders the expenses of today's diet to be expenses in the cause.

[7] At the proof on 17 January 2005 the parties were again represented by their respective solicitors. The defender duly gave evidence first at the proof and she was followed by the pursuers' Mr Graeme Fraser. Having heard submissions on the evidence, the sheriff made avizandum, and on 11 March 2005 he issued his judgement in terms of which he upheld the pursuers' first plea-in-law, repelled the defender's second plea-in-law, granted decree in favour of the pursuers in the sum of £1,638.25 with interest and found the defender liable to the pursuers in expenses as taxed.

[8] The sheriff made a total of fourteen findings in fact. For present purposes it is necessary to notice only those numbered 2, 3, 8, 9, 10, 11, 13, 14. These read:

2. The Pursuer issued a fee note to the Defender for £2,438.25 on 31 May 2003.

3. The Defender made a payment to account of the fee note in the sum of £700 in September 2002, said payment being made by a cheque for £300 and a cheque for £400.

8. In November 2003 the Defender received an Initial Writ from the Pursuer's solicitors in the sum of £1,638.25.

9. On 4 December 2003 the Defender telephoned the Pursuer regarding the Initial Writ received and offered to pay £1,200. The Pursuer, who was not in his own office at the time and did not have the file before him, asked the Defender how much the fee note was for. She indicated that it was for £1,600. The Pursuer said that he would accept £1,400. All figures mentioned were net of VAT. The Defender asked the Pursuer if he would instruct his solicitors not to proceed with the action and the Pursuer agreed to do that.

10. The Defender wrote to the Pursuer by letter dated 4 December 2003, enclosing a cheque for £710 being £1,200 plus VAT less £700 paid in September 2002. The Pursuer reported matters to his solicitors and did not cash the cheque for £710.

11. The Pursuer's solicitors wrote to the Defender by letter dated 10 December 2003 indicating that their client had not agreed to accept £710 in full and final settlement and that they had been instructed to take decree against the Defender for the full amount of £1,638.25 plus expenses of £255.20 unless payment was made by return.

13. The Pursuer's invoice dated 31 May 2003 is fair and reasonable remuneration for the work done.

14. There was no consensus or agreement between the parties occasioned by the telephone call of 4 December 2003.

(In passing, it is to be observed that there appear to be two errors in finding in fact 2. The fee note was for £2,338.25, not £2,438.25, and it was issued on 31 May 2002, not 2003. Likewise in finding in fact 13 the year should be 2002, not 2003. No point was sought to be made of these errors at the appeal).

[9] The sheriff explained the basis for his decision at pages 8/9 of his judgement in the following terms:

I did not consider that the evidence of the Defender was in any way credible or reliable. While she eventually conceded that her inability to pay the invoice was a reason for not contacting the Pursuer, I considered that that was the real reason as opposed to the complaint that she might have regarding the level of the fee. Given the earlier Interlocutor of 2 November 2004 repelling the Pursuer's second and third plea-in-law and the Defender's first plea-in-law, I was left to decide the Pursuer's first plea-in-law and the Defender's second plea-in-law. The Pursuer's first plea-in-law was that the services rendered in terms of the original contract was reasonable and given that they were entitled to reasonable remuneration quantum meruit I should grant decree. This was not argued against by the Defender in terms of the amount being excessive but the Defender argued that a new contract had been entered into following on the telephone conversation of 4 December and thereby the Pursuer was not entitled to decree in terms of the original invoice.

I did not consider that the telephone conversation of 4 December created a new contract. It was quite clear to me that there was no consensus between the Pursuer and Defender. I believed the Pursuer when he said that he would accept £1,400. I did not accept that the Pursuer had agreed to £1,200, which figure the Defender maintained that they had settled on. That in itself would enable me to revert to the original invoice and contract and of course the Defender was no longer arguing her first plea-in-law. In any event, having seen the invoice and the breakdown of charges which were spoken to by the Pursuer, such charges appear to me to be extremely reasonable. If that matter had still been a live issue I would have had no hesitation in holding that the charges were reasonable.

Accordingly I do not consider that the Defender has persuaded me that a new contract was entered into on 4 December. There being no consensus I Uphold the Pursuer's first plea-in-law and Repel the Defender's second plea-in-law and Grant Decree to the Pursuer in the sum of ONE THOUSAND SIX HUNDRED AND THIRTY-EIGHT POUNDS TWENTY-FIVE PENCE (£1,638.25) plus expenses.

[10] In her note of appeal the defender's grounds of appeal were stated as follows:

The Sheriff misapprehended a material fact of the action, namely, the Defender's ability to pay the Pursuers' invoice.

In misapprehending the Defender's ability to pay the Pursuer's invoice, the Sheriff erred in his assessment of the Defender's credibility;

The Sheriff failed to take into account or give relevant consideration to material parts of evidence including the fact that although the Sheriff held that the Pursuers agreed to accept £1,400 in settlement, the Defender had in fact paid £1,410.

[11] The solicitor who had lodged this note of appeal (who was not the solicitor who had represented the defender at the proof) subsequently withdrew from acting for the defender. I therefore fixed a peremptory diet for 26 April 2005 and on that date the defender appeared in person and stated that she wished to proceed with her appeal. She thereafter represented herself. She was sent the usual questionnaire by my secretary and she duly returned this indicating, inter alia, that she intended to refer to the notes of evidence and that these had not been extended and lodged.

[12] On 5 May 2005 on my instructions my secretary wrote to the appellant in the following terms:

Dear Madam

CASE NO: A671/03 - INVERNESS

Graeme Fraser & Co v Lynne Donaldson

On the form which you have returned to me you have indicated that you intend to refer to the Notes of Evidence at the appeal and that these have not yet been extended and lodged. You will therefore have to instruct the shorthand writer to extend these and the responsibility for payment of the cost of this will fall upon you in the first instance.

Provided that you can confirm to me within the next fortnight that you have instructed the shorthand writer to extend the Notes of Evidence, the sheriff principal will delay fixing a date for the hearing of the appeal until the Notes of Evidence are extended. As soon as this has been done you should send a copy of them to myself.

If I do not hear from you within a fortnight confirming that you have instructed the extension of the Notes of Evidence, I will advise the sheriff principal accordingly and I expect that he will proceed to fix a date for the hearing of the appeal without further delay.

I have sent a copy of this letter to the solicitor who acts for the pursuers and also the sheriff clerk at Inverness.

Yours faithfully,

[13] On 30May 2005 my secretary received a telephone call from the defender in which she stated that, because of a family bereavement, she had been unable to arrange for the extension of the notes of evidence for the appeal. Thereafter, on 27 June 2005 I assigned 19 August 2005 as a diet for the hearing of the appeal.

[14] On that date the pursuers were represented as before by their solicitor, and the defender represented herself. The notes of evidence had not been lodged and it was not suggested that the hearing of the appeal should be adjourned in order to allow this to be done.

[15] Opening the appeal, the defender presented various submissions in support of her three grounds of appeal. She had helpfully had these typed out, and a copy of them has been retained as no. 20 of process. In summary, she maintained that she had not been unable pay the pursuers' account, this had been excessive, there had been a lack of professionalism on the part of the pursuers and a variety of errors in the work carried out by them, there had been no proper complaints procedure, her efforts to negotiate with the pursuers had been ignored and following the telephone conversation on 4 December 2003 she had been left with no choice but to write to the pursuers enclosing a cheque for £710. At that time she had been recovering from viral fatigue and had been taking a holiday following the death of her father and in light of her concern for the health of her mother and there had been confusion on the part of Mr Graeme Fraser on various points in connection with telephone conversations between himself and the defender.

[16] In response, the pursuers' solicitor pointed out that there had been no suggestion in the grounds of appeal or in anything said by the defender that the sheriff had erred in law. On the contrary, the suggestion appeared to be that he had not been entitled to make certain of his findings in fact. Under reference to Clarke v Edinburgh and District Tramways Company Limited 1919 SC (HL) 35 and Thomas v Thomas 1947 SC (HL) 45 he drew attention to the limited circumstances in which an appeal court may interfere with findings in fact made by a court of first instance. He pointed out that in any event in the present case the notes of evidence had not been produced by the defender notwithstanding that it had been her responsibility to do so. In this situation an appeal court had no option but to accept the sheriff's findings in fact unless there was something in his note that contradicted them.

[17] Turning to the defender's grounds of appeal, the pursuers' solicitor drew attention to the last sentence in the sheriff's finding in fact 5 where he had stated that the defender "did not pay any more of the account after September 2002 because she did not agree with the level of the account and she did not have the money to pay it". The pursuers' solicitor drew attention to various passages in the sheriff's note where he had summarised the evidence of the defender and of Mr Graeme Fraser and submitted that this evidence appeared to be consistent with what the sheriff had found in his finding in fact 5 so that I should not interfere with it. It followed that the first ground of appeal should be rejected, as should the second ground which fell with the first ground. As for the defender's submissions about the reasonableness of the pursuers' fee note, the pursuers' solicitor drew submitted that, following the interlocutor pronounced by the sheriff on 2 November 2004, the only issue at the proof had been whether or not the parties had reached an agreement as averred by the defender to the effect that the pursuers' total charges would amount to £1200. As appeared from his finding in fact 14, the sheriff had found that there had been no such agreement. In these circumstances the defender's submissions about the amount of the pursuers' fee note were of no relevance. As for her third ground of appeal, it was clear from his judgement that the sheriff had been aware that the defender had originally paid £700 to account of the pursuers' fees and had thereafter sent them a cheque for £710. In all these circumstances the appeal should be refused and the defender found liable to the pursuers in the expenses of the appeal.

[18] In a brief reply, the defender repeated some of her criticisms of the work carried out by the pursuers and the amount of their fee note. She said that she was extremely angry at how badly someone providing a service could treat her. She also stated that she would not be happy to pay the expenses of the appeal and explained that she had lost time off her business attending court.

[19] I have had no difficulty in concluding that this appeal should be refused. Subject to the minor details to which I have already drawn attention, in the absence of the notes of evidence (and given too the sheriff's assessment of the credibility and reliability of the defender's evidence) I do not consider that there is any basis upon which I would be entitled to interfere with the sheriff's findings in fact. On the contrary, I am bound by them. It was not argued, nor in my opinion could it have been argued, that these findings in fact did not support the sheriff's decision to grant decree against the defender for payment to the pursuers of the sum of £1,638.25, and in these circumstances the appeal must be refused.

[20] I should refer briefly to the grounds of appeal. The first was that the sheriff had misapprehended a material fact, namely the defender's ability to pay the pursuers' invoice. In the absence of the notes of evidence or any indication in his note that he had been under any misapprehension on this point, it is not open to me to hold that there was any such misapprehension on the part of the sheriff. It follows that this ground of appeal, and also the second ground of appeal which depends upon the first, must both be rejected. In any event it is not obvious to me why the defender's ability to pay the pursuers' invoice should have been a material fact in the context of the issues which the sheriff had to decide in light of the interlocutor dated 2 November 2004. As for the third ground of appeal, it is clear that the sheriff was aware that the defender had originally paid £700 to account of the pursuers' fees and had then sent them a cheque for £710 following the telephone conversation on 4 December 2003. So it cannot be said that the sheriff failed to take these matters into account.

[21] I see no reason in this case to depart from the normal practice that expenses should follow success and I have therefore found the defender liable to the pursuers in the expenses of the appeal.