SHERIFFDOM OF TAYSIDE CENTRAL AND FIFE AT DUNDEE

 

Court Ref: B1028/11

 

JUDGEMENT

of

 

JOHN K MUNDY, Esquire, Advocate

Sheriff of Tayside, Central and Fife

 

in the cause

MESSRS J & E SHEPHERD Pursuers

against

PAUL DAVID LETLEY

Defender

____________

Act: Milne

Alt: Glass

 

DUNDEE, March 2012

The Sheriff, having resumed consideration of the cause, and having heard submissions on the parties' preliminary pleas; before answer, Allows the parties a proof of their respective averments; reserves all questions of expenses and appoints the parties to be heard thereon on a date to be afterwards fixed.

 

 

NOTE

 

Introduction

 

[1] These are proceedings at the instance of the pursuers against the defender for breach of interdict brought by way of a summary application. The matter has been appointed to a debate on the preliminary pleas of the parties.

 

[2] On 10 June 2011 this Court granted interim interdict against the defender in the following terms:

"...ad interim interdicts the Defender during the period of one year from 1^st June 2011 from canvassing or soliciting the custom of any person, firm or company with which he had dealings during the period of partnership of the firm or who was in the period of twelve months prior to the termination of the subsidiary Agreement".

It is accepted that the interdict was served on the defender on 13 June 2011 at the premises of Pavillion Properties. Within these proceedings the pursuers complain that the defender has acted in breach of that interdict. They ask the Court to find him in breach and to visit upon him "such a punishment as to the Court shall seem just."

 

[3] At debate the pursuers were represented by Mr Milne, solicitor, and the defenders by Mr Glass, solicitor. Mr Glass submitted, under the first plea-in-law for the defender, that the pursuers' averments in articles 2, 4, 5 and 6 of Condescendence should be excluded from probation leaving the averments in Answer 7 as the only substantive averments to go to proof. On the other hand Mr Milne for the pursuers sought decree de plano in terms of their first plea in law, to the extent of the matters referred to in Article 7 of Condescendence, and for a finding in breach of interdict in that respect. He sought an order ordaining the defender to appear at the bar of the Court in respect of breach of interdict. If I was not with him in this respect, he sought a proof or alternatively proof before answer on the whole averments.

 

Background

[4] The pursuers are a firm of chartered surveyors carrying on business in Dundee. The defender was a partner in the pursuers' firm until his expulsion on 1 June 2011. He was a fixed profit sharing partner and as such worked under the instruction of the principal partners in the firm. He had been a partner in the firm for over 20 years. The pursuers operated as part of their business a property letting department providing residential and management services to a number of clients. The defender headed that department. It appears that at some point prior to June 2011 the pursuers proposed to transfer the operation of this department to third parties, Direct Lettings Limited, a company with a registered office in Nottingham. I think it is reasonable to assume from the pleadings that the defender was not happy with this proposal. In the event, a transfer of the department and property management business was agreed between the pursuers and Direct Lettings Limited with an effective date of transfer of 1 June 2011. This appears to be the backdrop to the defender's expulsion on that date.

 

[5] There was a contractual provision in a "subsidiary agreement" (referred to in the interlocutor of 10 June 2011) and entered into between the parties containing a prohibition against soliciting or canvassing customers and it is agreed that the relevant provision is accurately reflected in the terms of the interlocutor. This agreement was not produced in this process.

 

The pleadings

 

[6] In Article 2 of Condescendence, the pursuers aver that the defender sought to encourage a number of the pursuer's clients to withdraw their business from the pursuers and to transfer to a business called Pavillion Properties ("PP"). Those clients included First & London Scottish Real Estate LLP ("First London"), Caledonian Properties LLP ("Caledonian") and RNP Properties ("RNP"), and other named clients. It is averred that the tenants of the named clients were informed by the defender that the management of their properties would transfer to PP with effect from 1 June 2011 and that all rent was to be paid to PP. It is averred that this conduct on the part of the defender continued after the service of the interdict. Reference is made letters from PP to tenants dated 18 May and 4 June 2011 which were incorporated in the pleadings. The pursuers aver that the defender has operated as a property agent from subjects occupied by PP. While the defender admits that he has been operating as a property agent, he explains that he has been doing so on behalf of PP, a company operated by a Ms Sally Cameron. There is clearly a dispute between the parties as to his role within that business. The pursuers say that PP is the trading name of Dundee Lettings Limited, that the defender's name appears on PP's website as a founding member of the business and that he has held himself out as a director/employee. The defender avers that, while he assists Ms Cameron in the operation of the company (which he refers to as Pavillion Properties Limited) he is neither a shareholder, a director nor an employee.

 

[7] The averments in Article 2 also make reference to the defender's other business interests. He is one of two designated partners in two Limited Liability Partnerships (LLPs) - First London and Caledonian - both referred to above as clients of the pursuers. The defender avers that as a designated partner he had the authority to make decisions regarding amongst other things the management of rental properties owned by the LLPs. He is also a partner RNP (referred to above) along with his estranged wife Julie Letley. The pursuers aver that this business relates to 52 properties jointly owned by the defender and Julie Letley. They have called upon the defender to produce a partnership agreement or most recent set of accounts explaining how the rental income is split. The defender also owns properties with various other named parties. He is a shareholder in two named companies.

 

[8] Article 3 of Condescendence contains formal averments as to the interdict obtained and service.

 

[9] Article 4 of Condescendence refers to RNP. As indicated, RMP owned approximately 52 properties, and prior to the defender falling into dispute with the pursuers, these properties were managed by the pursuers. Reference is made to a meeting on 8 July 2011 at the office of the pursuers' agents, held to explore a possible resolution of the difference that had arisen between the parties and to agree what clients were to remain under the management control of the pursuers. It is averred that a letter was received by the pursuers from Mrs Letley (although it is not said when) expressly stating that the 52 properties were not to be transferred to PP and also that Ms Sally Cameron of PP acknowledged on or about 23 May 2011 that the properties jointly owned by the defender and his wife were not to be transferred to PP. It is further averred that at the meeting of 8 July 2011, it was agreed between the parties that the properties of Mrs Ketley, First London, Caledonian, RNP, various entities involving Sally Keenan, Kidd Properties and Riverside Properties were to remain with the pursuers until such time as the parties reached a suitable resolution and reference is made to e mail broadly setting out the position which is incorporated in the pleadings. The pursuers aver that the defender has failed to adhere to the terms of the e mail and has instead sought to solicit and canvass the business of the pursuers. They aver that the defender has sought to withdraw business from the pursuers in which the defenders had an interest either as an individual with joint ownership, a partner in a firm or director or shareholder in a limited company. They aver that "he failed to separate his obligations to the Firm and interests as a client of the Firm." After reciting the terms of the interdict, the pursuers aver that the defender "has continued to breach the terms of the interdict. It is immaterial that the Defender has sought to remove business from the Pursuers in which he has an interest. These various entities were clients of the Pursuers regardless of whether the Defender had authority to make decisions on behalf of these entities. This purported authority does not preclude the Defender from being in breach of the Interim Interdict as he still sought to solicit and canvass the business of the Pursuers."

 

[10] The defender's averments in Answer 4 dispute the terms of what was agreed at the meeting on 8 July 2011. Reference is made to e mail correspondence which is not incorporated in the pleadings. It is averred that at the meeting, when discussing RNP, the defender indicated inter alia that "his wife throughout the whole period of ownership of the property had no involvement in their management and little interest in the properties other than the income they generated." In response the pursuers admit what was indicated in this respect and go on to aver that, in the absence of any agreement to the contrary "Mrs Letley is entitled to 50% of the income derived from the portfolio regardless of whether she was in involved in their management throughout the period of ownership."

 

[11] In Article 5 of Condescendence, the pursuers aver that a letter was sent by PP to a tenant ("MM") of RNP on or around 23 July 2011 confirming that the management of the property had been transferred to PP. The letter was on PP headed notepaper and signed by Sally Cameron. The terms of the letter are incorporated in the pleadings. Further, they aver that Mrs Julie Letley received two separate text messages from another tenant of RNP ("EP"), the first on 26 May 2011, before the interdict, and the second on 6 July 2011, after service of the interdict. The first states inter alia: "...Paul Letley came here on Monday with a letter from Pavillion Property advising me that they would be managing this property from 1 June. However, Shepherd sent a letter today saying that if I transferred the rent to any other party...I would be treated as being in default. Please advise me..." The second message on 6 July states inter alia: "...I have received another letter [from] P Letley informing me that you will be transferring to Pavillion Properties please tell me if ok..." The pursuers also aver that the defender had threatened to commence eviction proceedings against MM and EP under cover of letters of 16 September 2011, tenants who had continued to deal with the pursuers, and that he harassed them in an attempt to solicit business. Both letters, which are incorporated in the pleadings, were on PP headed notepaper and bear to be signed by the defender. In relation to RNP, it is averred that Mrs Letley wanted the management of the joint properties to remain with the pursuers. It is also averred that Sally Cameron of PP acknowledged in a local newspaper article dates 23 May 2011, prior to the interdict, that the RNP portfolio was to remain under the management of the pursuers. Reference is made again to the meeting on 8 July 2011 at which it is said that this was to be the case. It is averred that the actions of the defender are in breach of the interdict. In answer the defender avers that the transfer of the said business was instructed by him as a partner in RNP, that he neither canvassed nor solicited the transfer and that the actings do not amount to a breach of interdict.

 

[12] In Article 6 of Condescendence, the pursuers aver that the defender sought to solicit and canvass the business of Caledonian and First London by presenting a business case to members of both LLPs at a meeting on 16 June 2011 to tender for the business to be transferred to PP in clear contravention of the terms of the interdict. The defender answers that he was requested to do so by the members of the LLPs and makes averments providing background to that. He avers that he advised the LLPs of the proposed sale of the pursuers' letting department to Direct Lettings Ltd and of his preference as a partner that the business should not be moved to that company having regard to their pricing structure and the fact that they were not a local company. The defender avers that generally, all decision relating to properties owned by the LLPs were decisions of the designated partners, including himself, but that after the interdict was granted, he advised the pursuers that he would take no further action in respect of the management of the properties until such time as the partners of the LLPs had met to discuss matters. The defender avers that he was invited to attend the meeting on 16 June in London. The meeting had been arranged prior to the defender's knowledge of the proposed transfer of the pursuers' property management business. In the event, it is averred that the defender was not required to present his proposals at the meeting. In response the pursuers aver that the defender has been advised by a Mr Nigel Grinyer (another designated partner) on behalf of both LLPs that the management was to remain with the pursuers for the foreseeable future while the equity partners considered their options. It is averred that the pursuers have not received any verbal or written communications from the LLPs that the management of their properties was to be transferred elsewhere.

 

[13] There are further averments in Article 6 regarding a property in Perth Road, Dundee, one of a number owned by the LLPs. It is averred that on 13 September 2011, the defender e mailed the pursuers to advise that PP had found a new tenant for the property and would be collecting the rent. The previous tenant had been moved out and the defender procured the deposit and rent from the new tenant. It is averred that the LLPs did not give their authority and that the defender was acting without the authority or knowledge of the equity holders. The defender answers that the former tenant approached him directly and indicated she was terminating the tenancy and an alternative client presented at the defender's offices. He avers that he made arrangements as a partner of the LLP with authority.

 

[14] In Article 6, reference is also made to Giles Insurance Brokers Ltd as the appointed insurance brokers of the pursuers and that the pursuers benefited from commissions as a result of policies brokered by them. The insurance for the property portfolios of the LLPs were brokered by Giles. It is averred that on 3 October 2011, the defender secured the insurance of the property portfolios via PP and that the pursuers have been deprived of commission as a result. The defender avers in answer that the defender as partner in the LLPs was in the habit of arranging insurance through Giles.

 

[15] Article 7 contains averments to the effect that the defender sought to solicit the custom of landlords of two named properties in Dundee, currently managed by the pursuers. Each property was in the joint ownership of three named persons including SK. Reference is made to an e mail by the defender to SK dated 26 June 2011. The e mail states that other joint owners "would prefer [the properties] to be managed by my new company Pavillion Properties as opposed to Direct Lettings. There are obvious benefits of lower costs...I am not allowed to solicit from my former clients and have no wish to, most will be leaving Direct Lettings of their own accord." The pursuers aver that the e mail amounts to canvassing and soliciting in breach of the interdict. In answer the defender avers that he was approached by the other joint owners who indicated their wish to transfer the management of their various properties to the agency of PP and that the e mail was to advise SK of their wishes.

 

Submissions

 

[16] For the defender, Mr Glass submitted that the pursuers required to aver three distinct matters: (1) that the date of any alleged breach fell after the date of service of the interim interdict on 13 June 2011, and prior to the expiry of the contractual period on 31 May 2012; (2) that the defender had canvassed or solicited the custom of a person, firm or company and (3) that such person, firm or company had dealings with the defender during the period of the partnership with the pursuers.

[17] He submitted that in cases of breach of interdict, which were quasi criminal in nature, the relevant standard of proof was beyond reasonable doubt (Gribben -v- Gribben 1976 SLT 266). While having regard to the Civil Evidence (Scotland) Act 1988, corroboration was not required, there must be clear and distinct averments of breach and he relied in this respect on the case of Byrne -v- Ross 1992 SC 498.

[18] Mr Glass submitted that the averments in Article 2 of Condescendence were irrelevant. There was a broad averment that the defender sought to encourage clients to draw their business from the pursuers and a number of these businesses were named. However, there were no specific averments to show how and when such actions took place, although the pursuers did aver that the defender advised tenants of certain clients that management "would" transfer to Pavillion Properties with effect from 1 June 2011. That seemed to suggest that any such actions took place prior to 1 June and accordingly prior to service of the interim interdict. There were letters referred to dated 18 May and 4 June, and again both these letters pre-dated the service of the interim interdict. He submitted that there were no relevant averments in Article 2 to justify a finding of breach of interdict and that they should be excluded from probation.

 

[19] With reference to Article 4 of Condescendence, Mr Glass referred to averments as to what may or may not have happened at the meeting on 8 July 2011. These averments were irrelevant in relation to any allegation of breach of interdict, as were the averments as to what a Miss Sally Cameron may or may not have acknowledged in May 2011. As already noted, it was averred that she had acknowledged on or about 23 May 2011 that the properties owned jointly by the defender and his wife were not to be transferred to PP. Further, the averments insofar as the entitlement of income from RMP portfolio were irrelevant. In essence submitted Mr Glass, Article 4 of the Condescendence failed to specify properly any breach of interdict in a precise and understandable manner. There was a general averment that the defender had breached the terms of the interdict but other than that there were no averments which gave fair notice and which should be admitted to probation.

 

[20] Mr Glass turned to Article 5 of Condescendence. He raised essentially three objections. Firstly, he indicated that the averments concerning the letters sent to a MM were irrelevant. These related to the actings of Sally Cameron and in general PP. The letter of 23 July addressed to MM and which was produced by the pursuers and incorporated into their pleadings was a letter written by a Sally Cameron on behalf of PP. It was not written by the defender and the pleadings did not seem to tie the letter or the despatch of it to the defender. Accordingly, it was irrelevant for the purposes of the current action. The same was true he said of the text message dated 26 May from EP which pre-dated the service of the interim interdict and to that extent was irrelevant for the purposes of establishing a breach. Further the text message would appear to suggest that any action on the part of the defender in transferring the agency of that particular property pre-dated the grant and service of the interim interdict.

[21] Secondly, Mr Glass made reference to a text message dated 6 July from EP and also letters dated 16 September sent to both EP and MM. There was no averment in relation to either EP or MM, submitted Mr Glass, that they were persons with whom the defender had dealings in the period of his partnership with the pursuers. The pursuers had accordingly failed to aver all the criteria required to meet the test of establishing a breach. The averments were accordingly irrelevant. Further, there were averments that the defender had harassed both MM and EP. In respect of MM there was an averment that this harassment was done with an attempt to solicit "the business" from the pursuers. There was no specification as to what "the business" was. In respect of EP the alleged harassment was said to be in an attempt to solicit the business of RMP. There was no averment to link the alleged harassment to establish either canvassing or soliciting. The pursuers did not offer to demonstrate how the attempt to recover rent from a tenant who is paying arguably to the wrong agent, amounting to soliciting or canvassing. The pleadings lacked clarity and fair notice and on that view they should not be admitted to probation.

[22] Thirdly, Mr Glass submitted that there was an argument regarding the interpretation of the relevant clause within the contract and how it manifested itself in the interim interdict granted. The clause in the contract of partnership was founded upon by the pursuers. Having regard to the principles of construction, any ambiguity in relation to the contractual clause fell to be interpreted contra proferentem the pursuers. Authority for this could be found in McBryde on Contract (2^nd Edition) at paragraphs 8-34 through to 8-39. Mr Glass submitted that the ambiguity that existed here was in the definition of what was canvassing and soliciting. The defender's position put crudely was that he could not canvass or solicit himself. Insofar as RMP was concerned he was a partner in that business and accordingly had the ostensible authority to make decisions on the part of the partnership. What was clear was that the defender as a partner and the absence of agreement with his co-partner (his estranged wife) had taken a view that the partnership letting management business of RMP should be transferred from the pursuers to PP. This was perhaps understandable in light of his falling-out with the pursuers. Mr Glass went on to submit that the defender, wearing his hat as a partner in the business of RMP, presumably should not be treated any differently than any other customer of the pursuers. Should a customer of the pursuers take an active step without being canvassed or solicited by the defender to transfer his business to the defender, then interim interdict would not strike against that. In other words, the interim interdict did not fetter the free will of any customer of the pursuer's who took a decision on his own (or at least not solicited or canvassed by the defender) to take their business away from the pursuer. As a customer of the pursuers' the defender had taken such a decision. He believed that having regard to the manner in which the RMP partnership worked (he had averred that his wife had no interest in the management of the properties) that it was part of his management responsibility to make such decisions. Dictionary definitions of soliciting would infer that one party would seek to propose or ask for something from another. Reference was made to the Oxford English Dictionary (online). That did not suggest a decision taken solely in the mind of one person and then acted upon by that person. The definitions clearly suggested an approach of some sort by one person to another with a view to getting a particular decision made by that other person.

[23] Reverting back to the averment in Article 4 Mr Glass submitted that it was interesting to note that the pursuers aver that the defenders sought to withdraw business from the pursuers in which the defender had an interest. The pursuers did not aver how this amounted to solicitation or canvassing. They did aver, however, that the defender had failed to separate his obligations to the firm and his interests as a client. Mr Glass submitted that the pursuers had failed to consider that the defender was entitled to act as any other client might do when removing his business.

[24] He submitted therefore that the averments in Article 5 of Condescendence were irrelevant; there was nothing in those pleadings which suggested that the act of canvassing or soliciting had been carried out. They should not be admitted to probation.

[25] Mr Glass then dealt with the averments in Article 6 of Condescendence. The pursuers made an averment in relation to two LLPs of which the defender was a partner. He said that the argument in relation to the definition of canvassing and soliciting applied equally in this case. The averments referred to the presentation of a business case by the defender to his other partners or members in the LLPs. The defender had made a positive averment that his invitation to do so on 16 June 2011 was at the invitation of the members of the LLPs. The pursuers, in their pleadings, indicated that they were unaware as to whose invitation the meeting took place. Mr Glass submitted that this was fatal. They required to positively aver there had been canvassing and solicitation on the part of the defender. In the current case they simply say that they did not know who asked for the case to be presented. He said that that would not do. In relation to the meeting of 16 June the necessary averments were not made to support a finding of breach of interdict, even if the averments were found to be true.

 

[26] Mr Glass then made mention of the averments in relation to a property in Perth Road, Dundee. As noted above. there are averments about a new tenant being found and that the defender was acting without the authority or knowledge of the equity holders. He submitted that that was an issue between the defender and his partners but was not an issue of breach of interdict. There were no averments regarding canvassing or soliciting. The defender in answer had made clear averments as to the circumstances and without the necessary averments on the part of the pursuers, there were no relevant averments of breach of interdict and they should be excluded from probation.

[27] Finally in relation to Article 6, Mr Glass referred to the pursuers' allegations in respect of appointed insurance brokers. It was agreed that the insurance of the LLP's property was instructed through Giles Insurance Brokers Ltd. The Pursuers did indeed benefit in the past from commissions. The defender as partner of both LLPs continued the instruction of Giles Insurance Brokers. He did so as he had always done, by advising the brokers of a claims history, valuations and so on, in respect of the properties. Again, said Mr Glass, the argument in relation to the restrictive meaning of canvassing and soliciting was relevant here. There were however no averments as regards canvassing or soliciting. There was an allegation that the pursuers had been deprived of commission but again that was not an issue insofar as breach of interdict was concerned. The averments were accordingly irrelevant.

[28] Turning to Article 7 of Condescendence, Mr Glass conceded that those averments were relevant insofar as they detailed an e-mail sent on 26 June to one of the pursuers' clients. They did not however confirm that SK was a person with whom the defender had dealings during the relevant one-year period prior to his expulsion from the pursuers' partnership. It was accepted however to be likely that these averments and only these in respect of the alleged breach would require to proceed to proof.

[29] In reply, Mr Milne for the pursuers submitted that the averments in Article 7 of Condescendence were largely admitted and that decree de plano should be granted in respect of those matters. He referred to the said e-mail dated 26 June 2011 and indicated this was as clear an example of soliciting as one could expect to see. He invited me to find a breach of interdict in relation to that matter and to ordain the defender to appear at a future date for such order as to punishment as the court thought appropriate. He indicated that the other averments challenged by the defender were sufficient for proof. I will return to his submissions in that respect.

 

[30] In relation to his substantive argument, Mr Milne referred to the terms of the interdict itself which have been noted above. He accepted that there was a difficulty in the wording after the word "Firm" and before "or". He submitted that for the purposes of the debate it was sufficient to focus on the words from the interlocutor up to that point and it was therefore unnecessary to consider the words following. The issue therefore was whether canvassing or soliciting of customers with whom the defender had dealings during the course of the partnership had taken place during the currency of the interdict and he was not suggesting that there was any requirement to consider who may or may not have been a customer in the 12 months prior to the termination of the agreement on 1 June 2011 (which was one construction of the interdict).

[31] Mr Milne referred to the case of Baldwins (Ashby) Ltd -v- Andrew John Maidstone 2011 WL 2039796, a decision of his Honour Judge Simon Brown QC in the High Court of Justice (Queens Bench Division, Birmingham District Registry, Mercantile Court) dated 3 June 2011. [The Bailii citation is [2011] EWHC B12 (Mercantile)]. That was a case involving a dispute between a firm of accountants over clients. The defender sold his accountancy business in Ashby de la Zouch and the claimant alleged that the defendant had breached a 3-year covenant in the agreement protecting the goodwill in the company by "canvassing, soliciting or endeavouring to entice away" his former clients from them to another firm where he had commenced employment. In that case the meaning of "canvassing, soliciting or enticing away" was considered. Mr Milne made reference to paragraphs 9 and 10 of the Judgment referring to the objective of a restraint of trade clause being the protection of the value of goodwill. In paragraph 15 reference was made to the defendant's entitlement to compete for business with the claimants in the area and to undertake work for his previous clients if they solicited him to do so without his importuning them. As pointed out in that case (in paragraph 17) there was a dividing line between what was acceptable and what was not. At paragraph 18 of the judgment reference is made to Blacks Law Dictionary (9^th Edition) and the definition of "solicitation" as including "The act or an instance of requesting or seeking to obtain something" and "An attempt or effort to gain business." In paragraph 21 of the judgment reference was made to Equico Equipment Finance Ltd -v- Enright Employment Relations Authority, Auckland, New Zealand (17 July 2009) In that case the court discussed the meaning of "solicitation". The Court observed at paragraph [31] "It matters not who initiates the contact. The question of whether solicitation occurs depends upon the substance of what passes between parties once they are in contact with each other. There is solicitation of a client by a former employee if the former employee in substance conveys the message that the former employee is willing to deal with the client and, by whatever means, encourages the client to do so."

[32] Mr Milne submitted that the actions complained of in Article 7 of Condescendence represented a direct attempt to solicit business and so he invited me to find a breach established de plano.

[33] Mr Milne then responded to Mr Glass' criticisms of the pursuer's pleadings. He submitted that the pursuer's pleadings should be read as a whole in order to put the defender's actions in proper context. He submitted that what the pleadings disclosed was a course of conduct. Some actings averred pre-dated the service of interim interdict and therefore were not punishable. On the other hand some actings post-dated the service of the interdict and therefore were punishable as breaches of interdict. What the pleadings did was to paint a picture of the course of conduct.

[34] In relation to PP, the defender was associated with that entity as was clear from the excerpts from the PP website as at 11 August 2011 (2/1 of process). That website referred to the defender as one of the founders of PP along with Sally Cameron. In this context he also referred to correspondence from PP to a MM dated 23 July 2011 (2/6 of process) and from the defender to the same person on 16 September 2011 (8/5 of process).

[35] Mr Milne submitted in relation to the partnership RMP and the LLPs that the partnership in each case were separate legal personae and that therefore any canvassing by the defender was not canvassing of himself.

[36] He accepted the general observations of Mr Glass regarding the quasi criminal nature of the proceedings (Gribben) and the necessity for clarity in the pleadings (Byrne -v- Ross). Mr Milne submitted that his averments were all broadly relevant. On the other hand, he submitted that the defender's averments lacked candour. For example, in Article 2 of Condescendence, the defender is called upon to produce a partnership agreement or the most recent set of partnership accounts in relation to the firm of RMP, but that call has gone unanswered. He submitted that the averments relating to the insurance brokers, Giles, were relevant as evidence of breach of interdict.

[37] Mr Milne therefore submitted that the averments which were the subject of criticism were sufficient for proof (or proof before answer) and ought to be admitted to probation.

[38] In reply to Mr Milne's substantive submission, Mr Glass reiterated that the averments in Answer 7 were sufficient for proof. He referred to the averments in Answer 7 that the defender had been approached, which if proved would be a defence to the allegation of soliciting. He reiterated that there was no averment that Sally Keenan was a person with whom the defender had previous dealings. This lack of averment, it could be argued, was fatal to the pursuers, but, notably, Mr Glass indicated that he was not pressing that matter.

[39] As regards the terminology of the interdict, Mr Glass submitted that if there was ambiguity and it failed to be construed in favour of the defender under the contra proferentem rule. This would, he suggested, restrict the prohibition against soliciting to those with whom the defender had dealings in the 12-month period prior to the termination of the subsidiary agreement. This was a new submission and was not really developed in the context of the submissions that had already been made.

[40] Mr Glass clarified that the interlocutor of 10 June 2011 accurately reflected the terms of the contractual provision within the subsidiary agreement, which was a non-equity partnership agreement.

[41] With reference to the case of Baldwins, Mr Glass mentioned the reference the court made to paragraph [32] of the Judgment in Equico Equipment Finance Ltd to the effect that canvassing was synonymous with soliciting, and "Both words involve an approach to customers with a view to appropriating the customer's business or custom. I consider a degree of 'influence' is required. There must be an active component and a positive intention." He submitted that mere inference of breach of interdict was not enough and that there was nothing in the pleadings to draw the distinct issues together to form a course of action. He reiterated that clear and precise averments were required (Byrne v Ross). An example of the deficiency was the reference in the pleadings to Giles Insurance Brokers Ltd. The pursuers must offer to prove the breach of interdict, remembering that the standard of proof that was beyond reasonable doubt (Gribben).

[42] As regards the defender's interest in properties, it was open to the pursuers to have recovered documents to establish the precise arrangements. They had not done so.

Discussion

[43] The starting point in any discussion must be the terms of the interdict pronounced by this Court on 10 June 2011. The terms are worth repeating:

"ad interim Interdicts the Defender during a period of one year from 1^st June 2011 from canvassing or soliciting the custom of any person, firm or company with which he had dealings during the period of partnership of the firm or who was in the period of twelve months prior to the termination of the subsidiary Agreement."

[44] For present purposes I will assume that the partnership referred to in the interlocutor is the partnership of the defender in the pursuers J & E Shepherd. The meaning of the words "or who was in the period of twelve months prior to the termination of the subsidiary Agreement" are unclear. They are said to accurately represent the contractual provision in the subsidiary agreement. There is certainly an ambiguity and no doubt, when considering whether to grant interdict, a court should construe the contractual provision contra proferentem the pursuers. However, my task is to consider the arguments in the context of a breach of interdict, so I must look at the terms of the prohibition in terms of the court order. It is not for me to construe the contractual provision or conclude that one interpretation prevails over another. Looked at in that way, it seems to me that the interdict contains an express prohibition against canvassing or soliciting customers of the pursuers' firm with whom the defender had dealings during the period of his partnership. As it stands the last part of the interlocutor is meaningless and unenforceable. It may be that what was intended was that the defender would be prevented from dealing with those who were customers of the firm in the period of 12 months prior to the termination of the agreement, whether or not the defender had had dealings with them. However, it is not for me to speculate. Because of the use of the word "or" I am of the view that the interlocutor can be separated out and that the prohibition against soliciting customers with whom the defender had previous dealings is sufficiently clear and precise so that the defender is left in no doubt what he is forbidden to do (Murdoch -v- Murdoch 1973 SLT (Notes) 13, per Lord President Emslie).

[45] It is also clear from the authorities that, in proceedings for breach, which constitutes, if proved, a contempt of court, it is necessary in the interests of fairness that the allegations of breach should be clearly and distinctively averred (Byrne -v- Ross).

[46] In coming to my view of the averments, I have had in mind that it is not always easy to determine what is acceptable and what is not in the context of soliciting (Baldwins at paragraph 17) and the observations of the court in Equico Equipment Finance Ltd at paragraph [31]:

"It matters not who initiates the contact. The question of whether solicitation occurs depends upon the substance of what passes between the parties once they are in contact with each other. There is solicitation of a client with a former employee, if the former employee in substance conveys the message that the former employee is willing to deal with the client and, by whatever means, encourages the client to do so." [My emphasis]

[47] From the foregoing, it is clear that it is the substance of what occurs that is important and in doing so it is in my view necessary to see the alleged actings in their proper context. This includes a consideration of the whole picture, including what may have happened before the interdict was granted, rather than looking at certain actings in isolation, and I agree with Mr Milne's submissions in this respect. For example, what is disclosed in the averments may on one view, if proved, amount to a course of conduct. Clearly, however, any acts pre-dating the service of the interlocutor would not constitute a breach per se nor contempt and will not be punishable.

[48] Turning to consider the specific criticisms of Mr Glass, I regard the averments in Article 2 of Condescendence as setting the scene and containing background to the obtaining of interdict.

[49] As regards to the challenge to the averment in Article 4 of Condescendence, I have considerable sympathy with Mr Glass's argument as to the averments relating to the meeting on 8 July 2011. What was agreed and whether the defender did not adhere to such an agreement is, it seems to me on the face of it to be irrelevant to the question of a breach of an interdict pronounced on 10 and served on 13 June 2011. However, it may be that such material might be relevant as background in the context of the whole picture, with potential implications as to punishment, should a breach be established. On the whole I consider that I cannot determine the relevancy of the averments here without enquiry.

[50] I now turn to the three objections raised by Mr Glass to the averments in Article 5. As regards the first, I have concluded that the averments are sufficient, if proved, to tie the defender into PP and while the first text of 26 May does pre-date the interdict, it is in my view relevant as to background. As to his second point, that there was no averment that EP or MM were persons with whom the defender had had previous dealings, it seems to me that it could be inferred from the correspondence, particularly the text of 26 May 2011 and the terms of the letters of 16 September 2011, which are incorporated in the pleadings, that the defender had previous dealings with those persons. Also, I regard the averments of harassment as being potentially relevant to the issue of soliciting. The third point related to the construction of the relevant clause of the agreement prohibiting canvassing or soliciting. I have already dealt with the argument of construction contra proferentem the pursuers. The principle does not in my view assist in the argument as to whether the defender was in effect canvassing or soliciting himself. It seems to me that this is a legal question which depends upon the facts, rather than a question of construction. I am not attracted by the argument that, as a partner of a customer firm, the defender would be incapable of canvassing because he would be in effect canvassing himself. It is quite clear that in the law of Scotland a partnership is a separate legal personality. In this respect I agree with Mr Milne's submissions. Whether there was soliciting depends upon the facts established by evidence at enquiry.

[51] Turning to Article 6 of Condescendence, and the averments concerning the presentation of a business case by the defender at a meeting of the LLPs on 16 June 2011, I consider that whether or not what transpired amounted to soliciting or canvassing is eminently a matter for proof. The fact that the pursuers meet the defender's averments as being not known and not admitted is not to my mind fatal to the pursuer's position. Whether canvassing or soliciting took place are matters of evidence. Similarly, it seems to me that whether the circumstances surrounding the change of tenancy of the property in Perth Road amount to a breach of the interdict depends upon the facts established by evidence. I am not convinced that it is solely an issue as between the LLPs and the defender. As regards the insurance brokers Giles, although perhaps not directly relevant to canvassing or soliciting, I consider that they may be relevant background to the alleged course of conduct. I consider an enquiry is appropriate in relation to these matters.

[52] In summary, there are averments in Articles 5 and 6 of Condescendence which, if proved, could amount to a breach of interdict. There are in addition the averments in Article 7 which Mr Glass accepted were sufficient for proof. Looking at the whole picture, I have come to the conclusion that an enquiry into the facts as averred in necessary before applying the law and that accordingly a proof before answer is appropriate in relation to the pursuers' averments.

[53] I wish to add that the way the pursuers' averments are set out is not ideal. It would have been better to clearly set out the averments directed at breach per se in a separate article or articles of condescendence prefaced by an averment of breach and followed by the particulars of the breach. This would have aided clarity. Having said that, I consider that the averments relating to alleged breaches of the interdict following service are sufficiently distinct and clear to merit enquiry.

[54] As regards Mr Milne's submission for decree de plano in relation to the averments in Article 7 of Condescendence, I have sympathy with his submissions on the matter having regard to the e mail to SK dated 26 June 2011. It is not immediately apparent that the defender's position in answer - being approached by the other joint owners of the properties and advising SK of their wishes - provides a relevant defence. However, I do not wish at this stage, to rule out the possibility of a defence on those averments. I have come to the view that the averments in answer are of doubtful relevancy. In that situation a proof before answer in relation to those averments is appropriate. In any event, it would in my view not be desirable in this particular case to separate out the issues in Article 7 from the rest of the case by excluding them from enquiry by the leading of evidence.

[55] Accordingly, I have concluded that that a proof before answer is appropriate on the whole averments, reserving the preliminary pleas. I consider that the issues of relevancy cannot be properly resolved without inquiry. I have pronounced an interlocutor which reflects my decision. It was agreed that expenses should be reserved in the meantime and I have appointed the cause to hearing on a date to be fixed.