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You are here: BAILII >> Databases >> Scottish Sheriff Court Decisions >> Towns v. Insurance Direct (Underwriting) Ltd [2005] ScotSC 85 (01 December 2005)
URL: http://www.bailii.org/scot/cases/ScotSC/2005/85.html
Cite as: [2005] ScotSC 85
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SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT ELGIN
A211/03
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JUDGEMENT of SHERIFF PRINCIPAL SIR STEPHEN S T YOUNG Bt QC in the cause DAVID S TOWNS Pursuer and Respondent against INSURANCE DIRECT (UNDERWRITING) LIMITED Defenders and Appellants
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Act: Mr R A Smith QC, instructed by Lefevre Litigation, Edinburgh
Alt: Mr M E McKay, advocate, instructed by CMS Cameron McKenna (Scotland) LLP, Aberdeen
Elgin: 1st December 2005
The sheriff principal, having resumed consideration of the cause, allows the appeal and recalls the interlocutor of the sheriff dated 7 July 2005; repels the defenders' first plea-in-law and also the pursuer's second plea-in-law to the extent that it refers to fraud on the part of the defenders; sustains the defenders' second plea-in-law quoad fraud and loss of stock and excludes from probation the following averments of the pursuer:
- In article 1 of the condescendence the words "fraudulent or".
- In article 3 of the condescendence the words "From about June 2001 the defenders asserted that the insurance policy had been underwritten by Assitalia Limited, 117 Fenchurch Street, London".
- In article 4 of the condescendence the words "et separatim fraud", the words "Separatim the defenders dishonestly or recklessly and fraudulently for their own gain and to the pursuer's loss represented to the pursuer that he was insured and induced him to pay premium and not to continue his existing insurance or arrange alternative insurance when they well knew that no insurer was bound to indemnify him. By their fraud the defenders caused the pursuer loss, injury and damage. The defenders persisted in their fraud by representing to the pursuer and to Assitalia Limited that Assitalia Limited were bound to indemnify the pursuer, that the pursuer's policy had been incepted with Assitalia's authority on 30 May 2000 and had been amended on the pursuer's instructions on 14 June 2000 with the effect of altering the apparent inception date of the policy in the defenders' computer records" and the words "the fraud et separatim".
- In article 5 of the condescendence the words "At the time of the fire there was a stock of wines, beer and spirits in the premises which was worth about £3,000" and the words "et separatim the fraud";
quoad ultra before answer and under reservation of the defenders' second plea-in-law allows the parties a proof of their respective averments; finds the pursuer liable to the defenders 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; certifies the cause (including the appeal) as suitable for the employment by the pursuer and the defenders of senior and junior counsel respectively; and remits the cause to the sheriff to proceed as accords and in particular to determine all questions of liability for the expenses of the debate before him on 18 February and 1 April 2005 upon the basis that he ought thereafter to have excluded from probation the foregoing averments in support of the pursuer's case of fraud against the defenders as well as the averment in relation to the stock worth about £3,000.
Note
[1] In this case the pursuer and respondent was at all material times the proprietor of licensed premises in Lhanbryde, Morayshire. He sues the defenders and appellants for payment to him of the sum of £388,000 with interest and expenses to compensate him for the losses said to have been sustained by him after the premises had been severely damaged by fire on 20 August 2000. There are various grounds upon which he maintains that the defenders are liable to him. For the purposes of this appeal it is necessary to notice only one of these grounds, namely that there was fraud on the part of the defenders. This is reflected in the pursuer's second plea-in-law which reads:
- Separatim the pursuer having suffered loss, injury and damage through the negligence et separatim the fraud et separatim negligent misrepresentation of the defenders is entitled to reparation from them therefor.
[2] The defenders tabled a preliminary plea directed to the relevancy and specification of the pursuer's averments in the following terms:
- The pursuer's averments regarding the defenders being irrelevant et separatim lacking in specification, the action should be dismissed so far as directed against them.
[3] In article 2 of the condescendence the pursuer avers that he purchased the premises in or about January 1999 and insured them through a firm of insurance brokers. He avers that he renewed this cover in January 2000 and that shortly after this renewal the defenders telephoned him and offered to quote for alternative, cheaper insurance. It is said that they quoted a substantially lower premium than he was already paying and that he accepted this quotation and asked the defenders to arrange for cover. He avers that he wished there to be a short period of overlap between the existing policy and the new policy, so that there was no danger of him being uninsured for a short time. He says that it was his intention to cancel his existing policy once the insurance arranged by the defenders was in place. Further on in article 2 the pursuer avers:
...... on 14 June 2000 and in any event after 30 May 2000 the defenders agreed to effect insurance for the pursuer. On 21 June the pursuer cancelled his existing insurance in reliance on the defenders' representation that they had arranged insurance for him. The defenders caused or permitted the inception date of the pursuer's insurance to be entered in their computer system and in the records bearing to be computer printouts submitted to Assitalia Limited to support claims for payment as 30 May 2000. The said entries were incorrect as the defenders knew or ought to have known. Assitalia Limited had withdrawn the defenders' delegated underwriting authority with effect from and after 30 May 2000. If the defenders had informed the pursuer that they could not arrange insurance he would have continued his existing cover. He would have been indemnified for the risk that eventuated.
(In the course of the appeal it was agreed that the references here and in article 4 to 30 May 2000 should have been to 31 May 2000).
[4] In article 3 of the condescendence the pursuer avers:
By letter dated 14 June 2000 ...... the defenders confirmed that they had accepted the pursuer's instructions to start cover from 14 June 2000; and that the insurance policy document, schedule of cover and full employer's liability certificate would be issued within 7 days of receipt of the pursuer's completed proposal form and payment. The said letter is incorporated for its terms. On 5 July 2000 the pursuer signed and subsequently returned to the defenders the proposal form and the premium instalment plan application form containing direct debit mandate. The defenders received payment of the premium. Starting on 16 August 2000 monthly premium instalments were deducted from the pursuer's bank account. The pursuer relied on the defenders' representations that they would and that they had insured his business and property. He cancelled his existing insurance and did not arrange alternative insurance. On 20 August 2000 the premises insured were severely damaged by fire.
[5] Further on in article 3 the pursuer avers that from "about June 2001 the defenders asserted that the insurance policy had been underwritten by Assitalia Limited, 117 Fenchurch Street, London". Then in article 4 the pursuer avers:
Separatim the defenders dishonestly or recklessly and fraudulently for their own gain and to the pursuer's loss represented to the pursuer that he was insured and induced him to pay premium and not to continue his existing insurance or arrange alternative insurance when they well knew that no insurer was bound to indemnify him. By their fraud the defenders caused the pursuer loss, injury and damage. The defenders persisted in their fraud by representing to the pursuer and to Assitalia Limited that Assitalia Limited were bound to indemnify the pursuer, that the pursuer's policy had been incepted with Assitalia's authority on 30 May 2000 and had been amended on the pursuer's instructions on 14 June 2000 with the effect of altering the apparent inception date of the policy in the defenders' computer records.
[6] A copy of the letter referred to in article 3 forms no. 5/3/9 of process. It is dated 14 June 2000, addressed to the pursuer and bears to come from the defenders. It is signed by Ms Alison Miller. So far as material it reads:
Dear Mr Towns
COMMERCIAL INSURANCE POLICY No. IDUL66576000531
With reference to our recent telephone conversation regarding your Business Insurance, please accept this letter as confirmation that we have accepted your instruction to start cover from 14 June 2000.
Your temporary certificate of Employer's Liability is enclosed, this certificate is valid for a period of 14 days from the inception date shown on the certificate.
Your Insurance Policy Document, Schedule of Cover and full Employer's Liability Certificate will be issued within 7 days of your completed proposal form and payment .......
.......
Yours sincerely,
(Sgd) Alison Miller
A copy of the temporary certificate referred to in the letter is attached to it. It indicates that the date of commencement of the insurance policy was 14 June 2000, that the policyholder was the pursuer, that the insurers were Trenwick International Limited and that the defenders were the issuing intermediaries. (In passing, I may perhaps observe that it appears from answer 3 that the explanation for the reference here to Trenwick International Limited was that this company was to underwrite the employer's and third party liabilities under the policy while Assitalia Limited was to underwrite the remaining sections of the policy).
[7] In due course a debate took place before the sheriff. In support of their second plea-in-law counsel for the defenders submitted, inter alia, that with regard to the pursuer's case averring fraud the terms of the letter of 14 June 2000 gave rise to no inference of deliberate or reckless deception and that in his averments the pursuer had failed to identify the person responsible for the alleged fraud. On the basis of this and other submissions the sheriff was invited to sustain this second plea-in-law and to dismiss the action. In response counsel for the pursuer submitted that he had averred sufficient for a case based upon fraud - the letter of 14 June 2000 constituted the representation that the pursuer had effective insurance cover from that date, Assitalia Limited had on 30 May 2000 terminated the defenders' authority to contract on their behalf, of which the principals and staff of the defenders must be deemed to be aware, whereby there was no effective cover with Assitalia Limited or any other insurer, and the pursuer did not learn the true position until after the occurrence of the fire.
[8] In the result by interlocutor dated 7 July 2005 the sheriff sustained the defenders' second plea-in-law only to the extent of excluding from probation an averment by the pursuer about loss of stock (with which this appeal is not concerned) and quoad ultra before answer and under reservation of this plea allowed parties a proof of their respective averments. The sheriff dealt with the pursuer's case based on fraud at pages 10 and 11 of his note in the following terms:
For a claim based upon fraud, the averments of fraud must be specific (McBryde, Contract, 2nd Edn., 14-53). Fraud consists of a false representation, made knowingly or without belief in its truth or recklessly, with the intention of causing and actually causing damage or economic loss to a pursuer by reliance thereon. (Stair, 1, 9, 9; Boyd & Forrest v Glasgow & South Western Railway, 1912 SC (HL) 93). Counsel for (the defenders) had contended that their letter of 14 June, 2000, to Mr Towns did not indicate fraud. When it is examined in isolation that is doubtlessly correct. That is only part of the picture, however. That letter has to be considered against (the defenders') having had its authority to contract as agents for Assitalia terminated by Assitalia on 30 May, 2000, (according to Mr Towns' averments). These facts in conjunction, if proved, are capable of giving rise to an inference of fraud in the absence of exculpatory explanation, and so cannot be categorised as irrelevant.
[9] Opening the appeal, counsel for the defenders submitted that I should allow the appeal, recall the interlocutor of the sheriff dated 7 July 2005 to the extent of sustaining the defenders' second plea-in-law in regard to the pursuer's averments anent fraud and excluding them from probation accordingly and quoad ultra allow a proof before answer under reservation of this plea. In addition, counsel submitted that I should at this stage repel the pursuer's second plea-in-law to the extent that it referred to fraud on the part of the defenders. Counsel drew attention to a number of authorities and in particular a passage in the judgement of Lord Macfadyen in Stewart Buchanan Gauges Limited v Bec (Scotland) Limited (Court of Session, 19 January 2001, unreported). At paragraph [14] his Lordship stated:
[14] It seems to me that, in identifying the tests which averments of fraudulent misrepresentation must pass, it is worth making the distinction between relevancy and specification. So far as relevancy is concerned, to make a case that a contract was induced by fraudulent misrepresentation, the pursuer must in my opinion set out in averment (i) the representation that was made, (ii) that the representation was false, (iii) that the maker of the representation knew when he made it that it was false (or acted recklessly, in that he did not know and was indifferent to whether it was true or false), (iv) that the maker of the representation, if not the defender, was one for whose actings the defender was in law answerable, and (v) that the pursuer was induced by the representation to enter into the contract in question. So far as specification is concerned, the authorities in my view justify the conclusion that when fraud is alleged, a high standard of specification is required. It seems to me that it is appropriate to bear in mind that the rule requiring pleadings to be specific is founded in fairness. The party against whom any allegation is made is entitled to have fair notice in the other party's pleadings of the substance of the allegation. Where the allegation is of fraud, the courts have applied that rule of fairness particularly strictly. But, in my view, even in a case of fraud, a defender is not entitled to complain of lack of specification if the pursuer's pleadings give him what in the circumstances amounts to fair notice of the allegation. He cannot, through reliance on the authorities about the high standard of specification required in cases of fraud, demand that the pursuer's averments go into more detail than is necessary to give fair notice of the case. Subject to that point, however, it must in my view be borne in mind that the strict standard of specification will be applied to each of the essential elements of the case identified above.
[10] Counsel for the defenders submitted that the pursuer's pleadings on the issue of fraud were irrelevant for two principal reasons. In the first place the pursuer had failed to make averments in relation to two essential elements in a case of fraudulent misrepresentation, namely (a) the identity of the individuals said to have been party to the fraud, fraud being a personal act, and (b) that the maker of the particular representation relied upon knew, when the representation was made, that it was false or acted recklessly in that he or she did not know, and was indifferent to, whether it was true of false. And in the second place the averments which were to be found in the pursuer's pleadings in regard to the making of the representation relied upon by him did not bear the inference that that representation had been fraudulent. In addition, counsel submitted that these averments were lacking in specification in that they did not give the defenders fair notice of the following matters, namely (i) the identity of the perpetrator or perpetrators of the fraud, (ii) the identity of those who acquiesced in the fraud and permitted it to be carried out, (iii) the means by which the fraud was carried out, it being unclear whether the pursuer relied upon a single act or a course of conduct, (iv) the documents said to support the allegation of fraud, and (v) how these documents were relied upon by the pursuer. Counsel submitted in particular that, on the assumption that the fraudulent misrepresentation in this case consisted in the sending of the letter dated 14 June 2000, the pursuer's averments were irrelevant and lacking in specification in that there was no averment that the author of the letter, namely Ms Alison Miller, knew that what she had said in the letter was untrue nor were there otherwise sufficient averments to justify an inference of fraud on her part.
[11] In response, counsel for the pursuer drew attention to the well known comments of Lord Normand in Jamieson v Jamieson 1952 SC (HL) 44 at page 50, viz.: "The true proposition is that an action will not be dismissed as irrelevant unless it must necessarily fail even if all the pursuer's averments are proved. The onus is on the defender who moves to have the action dismissed, and there is no onus on the pursuer to show that if he proves his averments he is bound to succeed" (and see Lord Reid to the same effect at page 63). Counsel accepted that in order to plead a relevant case of fraud it was necessary for a pursuer to set out averments in relation to the five points identified by Lord Macfadyen in Stewart Buchanan Gauges Limited. Counsel accepted in particular that it was necessary for a pursuer to identify in his pleadings the author of the fraudulent misrepresentation and he acknowledged that in the present case the author could only have been Ms Alison Miller, she having been the person who signed the letter dated 14 June 2000 which had been sent to the pursuer. Counsel suggested (and I did not understand counsel for the defenders at the end of the day to dispute) that the pursuer had set out sufficient averments in relation to points (i), (ii), (iv) and (v) of Lord Macfadyen's formulation. Counsel concentrated accordingly on point (iii), namely that the maker of the representation knew when she made it that it was false (or acted recklessly, in that she did not know and was indifferent as to whether it was true or false). Counsel drew attention to the familiar passage in the judgement of Lord Herschell in Derry v Peek 1889 14 AC 337 at page 374 which reads:
First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shown that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made.
[12] Under reference to paragraph [6] of the judgement of Lord Drummond Young in Smillie v Olympic House Limited 2004 SLT 1244 counsel for the pursuer submitted that it was enough that he should aver sufficient to allow the inference to be drawn that Ms Miller knew that the statement in her letter dated 14 June 2000 to the effect that cover would start from that date was untrue or at least had no honest belief in its truth. Counsel pointed out that, according to the pursuer's averments, the defenders' authority to write insurance policies on behalf of Assitalia Limited had been withdrawn on 31 May 2000 and yet on 14 June 2000 Ms Miller had written to the pursuer implying that there was such authority. The letter, said counsel, was therefore fraudulent in light of the earlier withdrawal of authority. Counsel suggested that Ms Miller must at least have been reckless as to whether or not the statement made by her in the letter of 14 June 2000 was true or not. If she had not checked before she wrote the letter to confirm that she had authority to issue insurance on behalf of the defenders then she could not have had an honest belief in the truth of what she had said in the letter. Counsel suggested that the true question was whether the facts and the circumstances averred by the pursuer, if proved, could not make any contribution to the process of proving the requisite degree of knowledge on the part of Ms Miller. Here he referred to a passage in the judgement of Lord Macfadyen in Stewart Buchanan Gauges Limited at paragraph [32] where his Lordship stated:
The pursuers offer to prove that the representations were false. It is not, in my view, possible to say at this stage that there is no scope for direct evidence of that fact. The case that the representations were false therefore cannot in my view be said to require averment of individual circumstances from which falsity can be inferred. Insofar as such circumstances are averred, the question at this stage is whether it can be said that those circumstances, if proved, could not make any contribution to the process of proving that the representations were false. In my view that cannot be affirmed.
[13] In my opinion the critical question in this appeal is whether, if the pursuer proves all that he offers in his averments to prove, there would be sufficient material before the sheriff to allow him to draw the inference on a balance of probabilities that, when she wrote the letter of 14 June 2000, Ms Miller knew that the statement therein that cover would start from 14 June 2000 was false or alternatively that she made the statement recklessly, without caring whether it was true or false and with no honest belief in its truth. In other words, if the pursuer proves all that he offers to prove, would the sheriff thereafter err in law if he found it proved that there had been fraud on the part of Ms Miller?
[14] I have already set out the averments of the pursuer in relation to this issue. In short, he offers to prove that Assitalia Limited had withdrawn the defenders' delegated underwriting authority with effect from and after 31 May 2000 and that at some stage (whether before or after the sending of the letter dated 14 June 2000 is not clear) the defenders "caused or permitted the inception date of the pursuer's insurance to be entered in their computer system and in the records bearing to be computer printouts submitted to Assitalia Limited to support claims for payment as (31 May 2000)". It is said that these entries were incorrect as the defenders knew or ought to have known. It is said further that from about June 2001 the defenders asserted that the insurance policy had been underwritten by Assitalia Limited and that the defenders dishonestly or recklessly and fraudulently represented to the pursuer that he was insured "when they well knew that no insurer was bound to indemnify him ..... The defenders persisted in their fraud by representing to the pursuer and to Assitalia Limited that Assitalia Limited were bound to indemnify the pursuer, that the pursuer's policy had been incepted with Assitalia's authority on (31 May 2000) and had been amended on the pursuer's instructions on 14 June 2000 with the effect of altering the apparent inception date of the policy in the defenders' computer records".
[15] To my mind the striking feature of all these averments is that they are silent on the question what Ms Miller knew or ought to have known or even to have enquired about when she wrote to the pursuer as she did on 14 June 2000. Thus, there is nothing to suggest that she knew or ought to have known on 14 June 2000 that Assitalia Limited had withdrawn the defenders' delegated underwriting authority with effect from and after 31 May 2000. Indeed, if she did know this, it is hard to understand why she should then have written to the pursuer a fortnight later saying that cover would commence on 14 June 2000. Nor is there anything to suggest that, when she stated in the letter that cover would begin then, she had acted recklessly in making this statement, without caring whether it was true or false and without any honest belief in its truth. And again there is nothing to suggest that she had any part in the fact, as averred by the pursuer, that from about June 2001 the defenders asserted that the insurance policy had been underwritten by Assitalia Limited. Nor is there anything to suggest that she knew or ought to have known about the matters averred by the pursuer in article 4 of the condescendence to the effect that, after the letter of 14 June 2000 had been sent, the defenders had persisted in their fraud by making various representations to the pursuer and to Assitalia Limited as narrated there.
[16] In this context it is to be observed that the letter of 14 June 2000 indicates that the defenders had at that time at least three separate places of business, two in Dunfermline and one in Glasgow. At which of these places Ms Miller was employed is not clear. Nor is it clear from the pursuer's averments how many employees the defenders had at that time, what Ms Miller's status was as an employee of the defenders, how, where or to whom in their organisation the communication of the withdrawal of delegated underwriting authority by Assitalia Limited was made or why Ms Miller ought to have known about this. At best for the pursuer it seems to me that, if he proves all that he sets out to prove in relation to this issue, the sheriff might justifiably have his suspicions about her state of knowledge when she wrote the letter of 14 June 2000. But it is one thing to say this and quite another to say that the sheriff would be entitled in light of this material to draw the inference that there had been on the part of Ms Miller fraud as this is to be understood in light of the comments of Lord Herschell in Derry v Peek and of subsequent authorities to the same effect. In my opinion, if the sheriff drew such an inference he would fall into error and it follows, to borrow the language of Lord Normand in Jamieson v Jamieson at page 50, that the pursuer's case so far as it is based on fraud must necessarily fail even if all his averments in relation to this issue are proved. I have therefore excluded these averments from probation.
[17] In reaching this conclusion I am conscious of what was said by Lord Macfadyen at paragraph [32] of his judgement in the case of Stewart Buchanan Gauges Limited to which counsel for the pursuer referred me. But of course, as counsel for the defenders pointed out, his Lordship's comments were made against a background of far more detailed averments of fraud than are to be found in the present case. Moreover what Lord Macfadyen was considering in this part of his judgement was whether the averments in question were apt to prove that the representations relied upon by the pursuers in that case were false (as opposed to fraudulent). I quite accept that in the present case it is necessary to take an overview of the pursuer's averments in relation to the issue of fraud rather than to consider them individually. This is what I have sought to do and in my opinion, for the reasons already indicated, they are not sufficient individually or collectively to support a finding by inference of fraud on the part of Ms Miller.
[18] For the sake of completeness I should mention that counsel for the pursuer founded also on a passage in the opinion of the court delivered by Lord Kissen in Johnson v Gill 1978 SC 74. In that case the landlords and tenants of an agricultural holding entered into arbitration proceedings. The tenants subsequently raised an action craving the court to find that the arbiter had misconducted himself and to set aside his award. Counsel for the defenders drew attention to the absence in the pursuers' pleadings of certain averments in relation to the question upon what basis the arbiter's award came to be in the hands of his clerk and submitted that the pursuers had thus failed in their pleadings to focus clearly the critical issues of fact. At page 85 Lord Kissen stated:
Nonetheless, we appreciate the pursuers' difficulties from a practical point of view in averring facts relevant to their case, but which are not within their own knowledge but only within the knowledge of the arbiter and his clerk. We are of the opinion that the pursuers have averred sufficient to warrant an inquiry into the circumstances in which the clerk came to hold the arbiter's award at the material time.
Relying on this passage, counsel for the pursuer submitted that the court should adopt a lenient approach to the degree of specification required of the pursuer in his pleadings in relation to matters which were peculiarly within the knowledge of the defenders. Thus, as counsel put it, the full rigours of Lord Macfadyen's formulation of the averments necessary to support a case of fraud were not to be applied universally. But, as counsel for the defenders rightly pointed out, Johnson v Gill was not a case in which fraud had been alleged and in my opinion the authorities to which I was referred amply justify the opinion expressed by Lord Macfadyen at paragraph [14] of his judgement in Stewart Buchanan Gauges Limited "that when fraud is alleged, a high standard of specification is required". As counsel for the defenders also rightly pointed out, fraud is a criminal act and if a pursuer seeks to make a case of fraud against a defender the onus is fairly and squarely on him to set out distinctly in averment the facts and circumstances from which fraud may be inferred - see Macphail's Sheriff Court Practice (2nd Edn) at paragraph 9.30.
[19] Counsel for the pursuer submitted that, even if I were against him on the issue of fraud, I should not exclude from probation the averments in article 2 of the condescendence to the effect that the defenders had caused or permitted the inception date of the pursuer's insurance to be entered in their computer system and in the records bearing to be computer printouts submitted to Assitalia Limited to support claims for payment as 31 May 2000 and that these entries were incorrect as the defenders knew or ought to have known. Counsel submitted that these averments were relevant not only to the pursuer's case based on fraud but also his case based on negligence on the part of the defenders with the result that these averments should remain as part of the pursuer's pleadings whatever the outcome of the appeal. In response, counsel for the defenders accepted that in principle these averments might be relevant to other parts of the pursuer's claim against the defenders. But he submitted that they were in any event lacking in specification and so should be excluded from probation for this reason alone. He submitted that these averments failed to give fair notice to the defenders on various questions including what was supposed to have been done by them, by whom, who had acquiesced in whatever had been done and which entries and/or records were said to be of relevance to the pursuer's claim or were being relied upon by him. For my own part, and bearing in mind that their purpose will now be restricted to supporting the pursuer's claim based on negligence, I am persuaded that the pursuer has said enough here to give the defenders fair notice of what he hopes to prove in this context and I have therefore thought it right not to exclude them from probation.
[20] In addition to the authorities which I have already mentioned, I was also referred to The Royal Bank of Scotland plc v Holmes 1999 SLT 563, McBryde on Contract (2nd Edn) paragraphs 14-55/61, Walker on Delict (2nd Edn) pages 885/6, Smith & Houston Limited v Metal Industries (Salvage) Limited 1953 SLT (N) 73, Boyd & Forrest v Glasgow and South Western Railway Company 1912 SC (HL) 93, Wright v Cotias Investments Inc 2000 SCLR 324, R H Thomson & Co v Pattison, Elder & Co 1895 22 R 432 and Semple Cochrane plc v Clark 2003 SLT 532.
[21] It was agreed that the expenses of the appeal should follow success. The discussion outlined in paragraph [19] above occupied only a few minutes of the appeal and I have therefore found the pursuer liable to the defenders in these expenses. It was not in dispute that I should certify the appeal as suitable for the employment by the pursuer and the defenders of senior and junior counsel respectively and I am content to do this.
[22] In his interlocutor dated 7 July 2005 the sheriff reserved all questions of liability for the expenses of the debate before him and appointed parties to be heard thereon on 13 September 2005. In spite of this the defenders lodged their note of appeal on 19 July 2005. In my opinion it would have been better if they had waited until the sheriff had dealt with the expenses of the debate. Counsel for the defenders submitted that, in the event of success for them in the appeal, I should find no expenses due to or by either of the parties in respect of the debate before the sheriff. Counsel for the pursuer on the other hand submitted that I should remit the cause back to the sheriff to deal with the expenses of the debate before him. Alternatively, I should deal with these expenses on the basis that at the debate the pursuer had been substantially successful and that the submissions made to the sheriff in relation to the issue of fraud had taken up only a small part of the time occupied by the debate.
[23] I notice from the interlocutor sheets that the debate took place over two days and it is evident from his note that a number of important issues were canvassed before the sheriff in addition to the issue of fraud. It is very difficult for me to assess the relative time taken up by, or importance of, any of the individual issues canvassed during the debate and in the circumstances I think that the most sensible course would be to remit the cause to the sheriff to determine how these expenses should be dealt with but always on the basis that he should have decided the issue of fraud against the pursuer rather than, as he did, in his favour.