Scottish Sheriff Court Decisions

SHERIFFDOM OF LOTHIAN AND BORDERS AT LIVINGSTON

 

 

 

Case No. A34/11

JUDGEMENT of SHERIFF SUSAN A CRAIG   in the cause   CUMBERNAULD HOUSING PARTNERSHIP LIMITED Pursuer against JANICE LEARY Defender __________

Livingston, 10 October 2013

The Sheriff, having resumed consideration of the cause, repels the Defender's second, third, fourth and fifth pleas in law; sustains the Purser's second plea in law and grants decree for payment by the Defender to the Pursuer of the sums of (one) NINE THOUSAND AND THIRTY FIVE POUNDS AND TWENTY ONE PENCE (£9,035.21) together with interest at 8% per annum from the date of citation until payment; (two) SEVEN THOUSAND SEVEN HUNDRED AND FIFTY THREE POUNDS AND SEVENTY ONE PENCE (£7,753.71) together with interest at 8% per annum from 21 December 2012 until payment; (three) ONE THOUSAND SIX HUNDRED AND NINETY FIVE POUNDS AND SIXTY ONE PENCE (£1,695.61) together with interest at 8% per annum from 21 December 2012 until payment; (four) TWO HUNDRED AND NINETY SEVEN POUNDS AND FIFTY FOUR PENCE (£297.54) together with interest at 8% per annum from 21 December 2012 until payment; (five) ONE THOUSAND NINE HUNDRED AND SIXTY FOUR POUNDS AND THREE PENCE (£1,964.03) together with interest at 8% per annum from 28 June 2013 until payment; (five) FOUR HUNDRED AND SIX POUNDS AND SIXTY EIGHT PENCE (£406.68) together with interest at 8% per annum from 28 June 2013 until payment; and (six) ONE THOUSAND TWO HUNDRED AND NINETY POUNDS AND FORTY THREE PENCE (£1,290.43) together with interest at 8% per annum from 28 June 2013 until payment; reserving meantime the question of expenses to be determined at a date to be hereafter fixed;

 

 

Sheriff

 

 

 

Note

Introduction

[1]     This was a proof in an action for payment in respect of a number of invoices rendered by the Purser to the Defender. The invoices were for management fees and, separately, common repairs in respect of a number of properties owned by the Defender in an estate of houses in which the Pursuer is landlord for the majority of the properties. The Pursuer carries out factoring / management duties on the estate as well as repairs to commonly owned areas.

 

[2] By way of Joint Minute it was agreed that the invoices that formed the subject matter of the action had been rendered to the Defender. Parties were also agreed about the amounts of the invoices and the fact that they were unpaid by the Defender. What was in dispute was, in effect, whether the sums were due and resting owing by the Defender. It was the Defender's position, put short, that the Purser was only entitled to charge "at cost", that is to say actual cost, and put the Purser to its proof that the sums narrated in the invoices were indeed at cost.

 

[3] The matter had already proceeded to debate and by interlocutor of 29 March 2012 the Pursuer's first plea in law had been repelled and a proof allowed. There had thereafter been substantial amendment and matter proceeded before me on the basis of the Amended Record number 26 of Process.

 

[4] When the matter called for proof Ms Gibson, for the Pursuer, explained that she sought to lead evidence from her witnesses, Adrian Waddell and Alf Egan, by way of the affidavits lodged in process. It was her position that the Pursuer was entitled to present its evidence in whatever fashion it chose (provided that it was competent) and that the technical and detailed nature of their evidence would be best given by way of affidavit.

 

[5] The motion was opposed by Mr O'Hanlon who argued that the Defender was prejudiced in that she would be deprived of the opportunity of cross examining the witnesses and therefore the court would not be in a position to make an assessment about what reliance, if any, could be placed on their evidence.

 

[6] As the submission progressed Ms Gibson explained that both Mr Waddell and Mr Egan were present and that she only sought to take their evidence in chief by way of affidavits; they could still be questioned by Mr O'Hanlon. On that basis and on the basis that Mr O'Hanlon agreed that affidavit evidence was competent, the objection was withdrawn.

 

[7] Ms Gibson's motion having been granted the proof proceeded. Ms Gibson referred to the affidavits. It would be fair to say that it had been expected that Mr O'Hanlon would then seek to examine both or either of Mr Waddell and Mr Egan but he did not. Instead he proceeded take evidence from one witness, Alexander Walker, who I was told was the defender's partner, both "in business and in life". I then heard submissions.

 

[8]            Having heard the evidence and submissions, I made the following findings in fact.

 

Findings in fact

 

Matters not in dispute

[9] The Pursuer is Cumbernauld Housing Partnership Limited, a company incorporated under the Companies Acts (Company No. SC203999) having its registered office at 7 Freeland Drive, Priesthill, Glasgow, G53 6PG.

 

[10] The Pursuer is a Registered Social Landlord registered with the Scottish Housing Regulator under the Housing (Scotland) Act 2001 (registered number 309). The Pursuer is also a registered charity registered with the Office of the Scottish Charity Regulator in terms of the Charities and Trustee Investment (Scotland) Act 2005 (Charity Number SC034903).

[11] The Defender is Ms Janice Leary.

 

[12] The Defender is the heritable proprietor of 19 properties in a development in Cumbernauld (the "Cumbernauld development"), of which there are a total of around 1,130 private owners. The properties owned by the Defender are:

 

a. 11D Mossgiel Road, registered under title number DMB64092;

b. 11H Mossgiel Road, registered under title number DMB62522;

c. 11A Kyle Road, registered under title number DMB51562;

d. 8A Ellisland Road, registered under title number DMB58338;

e. 8D Ellisland Road, registered under title number DMB49554;

f. 9G Ellisland Road, registered under title number DMB49759;

g. 9H Ellisland Road, registered under title number DMB7842;

h. 1F Tarbolton Road, registered under title number DMB19916;

i. 5C Tarbolton Road, registered under title number DMB51682;

j. 10H Tarbolton Road, registered under title number DMB35514;

k. 19B Tarbolton Road, registered under title number DMB31492;

l. 97 The Auld Road, registered under title number DMB32085;

m. 19E Glenhove Road, registered under title number DMB3003;

n. 41C Glenhove Road, registered under title number DMB75848;

o. 55H Glenhove Road, registered under title number DMB34311;

p. 182C Glenhove Road, registered under title number DMB19628;

q. 118 Glenacre Road, registered under title number DMB11130;

r. 174 Glenacre Road, registered under title number DMB14638; and

s. 11 Sandyknowes Road, registered under title number DMB38981.

[13] The land certificate for each property owned by the Defender contains the following provision:

 

"It shall be in the option of the superiors to act as factors in any or all of the said blocks of flats and, in the event of the superiors' exercise of such option, their powers in the exercise of such office shall be in their sole discretion and the feuars' rights referred to in this and Conditions Fifteenth and Sixteenth of these presents shall not apply. In the event of the superiors declining to act as factors the respective proprietors of the dominium utile of the dwelling houses in each of the said blocks of flats shall appoint one of their own number or any other person to act as factor and to take charge of the management of each of the said blocks of flats and shall pay him the usual remuneration for his services which shall be payable by the said proprietors of the dwelling houses in the proportion of an equal share in respect of each house owned by such proprietor; the factor shall be entitled during the continuance of his appointment (primo) to order to be executed any repairs, renewals, painting or decoration of such parts as are owned in common or any part thereof; (secundo) to make any regulations which may be considered necessary (but consistent with the provisions of these presents) with regard to the preservation, cleaning, use or enjoyment of such parts as are owned in common or any part thereof, all of which regulations shall be binding on all of the feuars of said dwelling houses whether consenters or not; (tertio) to decide upon the said insurance policy or policies as required by condition sixth of these presents and any change in regard thereto, and to determine any risks to be insured against other and those particularly herein before mentioned, and the amount or amounts by which the said insurances shall from time to time be increased or reduced (but subject to the provisions hereof) and the amounts of any other risks which he may determine to insure against, and (quarto) to collect from the feuars the proportions payable by them respectively of (a) the said insurance premiums, (b) the said expenses and charges for work done and services rendered and the remuneration of the factor and (c) any other sums for which the feuars or any of them may become liable in terms of or in furtherance of, the provisions herein contained or the provisions of the few contracts to be granted by us or our successors to the respective feuars and the factor shall be entitled to make payment of the said premiums, expenses, charges, remunerations and others in one sum to the insurance company or to any other person or person entitled to receive payment therefore; and in the event of any of the feuars failing to make payment of their respective proportions of said premiums, expenses, charges, remunerations or other sums for which they become respectively liable within fourteen days after payment of the same is demanded by the factor, the factor shall (without prejudice to any other rights and remedies of the other feuars) be entitled to sue for and recover the same in his own name from the feuars or feuars so failing together with all expenses incurred in connection therewith; declaring that the factor shall at all times be bound to act in accordance with the instructions of the feuars of the majority of the dwelling houses provided such instructions do not conflict with the obligations contained in the title deeds; further considering that, as the factor will require to advance the sums necessary to meet the cost of common repairs and common footlays, the feuars shall, on obtaining entry, deposit with the factor for each dwelling house owned by such feuar the sum of Fifty Pounds Sterling, or such other sum as may be agreed between the factor and the majority of the feuars, to form a fund from which the cost of the said common repairs and other common outlays may be met, and in the event of any of the said feuars selling any dwelling house belonging to him, her or them, such feuar will be entitled to recover the sum deposited with the factor under deduction of any proportion of the cost of the said common repairs and other common outlays due in respect of such dwelling house." (emphasis added)

 

[14] The Pursuer is the heritable proprietor of around 1,730 properties in the same development in Cumbernauld which are rented out to tenants at social or affordable rates.

[15] By virtue of being a Registered Social Landlord the Pursuer is required to provide certain services to its tenants in addition to the provision of accommodation.

 

[16] The buildings in the development (of which the Defender's properties form part) have common parts which serve both the tenants and private owners.

 

[17] The Pursuer is responsible for managing both the tenanted properties and the privately owned properties.

 

[18] The Pursuer provides a factoring service to the privately owned properties, which includes the properties owned by the Defender.

 

[19] The Pursuer is entitled to recover from the Defender the cost of common repairs carried out by the Pursuer.

 

[20] A management fee is charged to the private owners, including the Defender, for providing the factoring services.

 

[21] The management fee charged by the Pursuer to the private owners, including the Defender, is "at cost".

 

[22] The tenants pay a service charge for repairs and maintenance including the upkeep of communal areas.

 

[23] The Pursuer has issued to the Defender a number of invoices which invoices include the management fee charged for each of the Defender's properties. The services for which these invoices have been rendered have been provided by the Pursuer to the Defender. The management charges included within those invoices, which total £9,035.21, have not been paid by the Defender.

 

[23] The Pursuer has issued to the Defender invoices for services which have been provided by the Pursuer to the Defenders for the period 1 March 2011 to 30 September 2012. Those invoices include management charges totalling £7,753.71 which the Defender has failed to pay.

 

[24] The Pursuer has issued to the Defender invoices for repairs which have been carried out to areas owned in common by the Defender for the period 1 March 2011 to 30 September 2012. Those invoices include sums for common repairs totalling £1,695.61 which the Defender has failed to pay.

 

[25] The Pursuer has issued to the Defender the invoices for close painting common repairs which have been carried out to areas owned in common by the Defender. The Defender has failed to pay those invoices which total £297.54.

 

[26] The management fee for 2007/08 was charged at £158.50 per property for that year.

 

[27] The management fee for 2008/09 was charged at £173.08 per property for that year.

 

[28] The management fee for 2009/10 was charged at £189.34 per property for that year.

 

[29] The management fee for 2010/11 was charged at £195.96 per property for that year.

 

[30] The management fee for 2011/12 was charged at £206.74 per property for that year.

 

[31] The management fee for 2012/13 was charged at £206.74 per property for that year.

 

Matters not agreed or in dispute

 

[32] The Purser is the factor of the Cumbernauld development, in accordance with the title deeds. It is the registered factor in accordance with the Property Factor (Scotland) Act 2011.

[33] Scottish Homes were formally the landlords of the social rented housing in the Cumbernauld development. Scottish Homes provided the factoring services to the private owners within the development in accordance with the title deeds.

[34] In 2000 the tenants voted to transfer ownership of the rented properties from Scottish Homes to the Pursuer.

[35] In accordance with the title deeds a new factor can be appointed if a majority of proprietors (tenants or owners) on a block by block basis elect to appoint a new factor. As the title deeds also provide that a tenant vote secures a majority in each block it was unnecessary for the private owners to vote on the appointment the Pursuer as factors as the tenant vote was sufficient. The effect of the tenant vote in 2000 was that the management responsibility for the provision of the factoring services to the private owners transferred to the Pursuer.

[36] The Pursuer employs a factoring team which provides a management service to the private owner occupier and private landlords. The team is headed by Adrian Waddell. Inter alia Mr Waddell is responsible for overseeing the calculation of the management charges made in respect of the management services.

[37] Those calculations are based on the Purser's budgeted costs for any year. Invoices rendered to the private owner occupiers and private landlords are calculated on that basis. Invoices are paid on that basis. That is the Pursuer's usual remuneration for the management services it provides.

[38] In respect of the each of the invoices rendered to the Defender and which remain outstanding the management fee was calculated in accordance with the Pursuer's usual remuneration, that is to say, on the basis of budgeted costs.

[39] The total management fees unpaid by the Defender is £18752.95, comprising £9,035.21 in respect of invoices the period from April 2007 to September 2010, £7753.71 in respect of invoices for the period March 2011 to September 2012 and £1964.03 in respect of invoices for the period October 2012 to March 2013.

[40] The Pursuer is entitled to payment of those sums by the Defender.

[41] The Pursuer is entitled to recover from the Defender the cost of common repairs carried out by the Pursuer.

[42] Although the Pursuer has carried out a number of repairs to properties owned in common with the Defender and issued invoices in respect of those repairs, invoices remain outstanding. The total amount of the common repairs unpaid by the Defender is £3690.26 comprising £1695.61 in respect of invoices for March 2011 to September 2012, £297.54 in respect of an invoice for August 2012, £404.68 in respect of invoices for October 2012 to March 2013 and £1290.43 in respect of an invoice for June 2012.

[43] The Pursuer is entitled to payment of those sums by the Defender.

Submissions for Pursuer

[44]         It was Ms Gibson's submission that in the absence of any attempt to cross examine either Mr Egan or Mr Waddell I was entitled to find proved all the matters spoken to in their respective affidavits. I could take little from the evidence of Mr Walker, she submitted, in that he did not speak to the critical issue, that is to say, whether the invoices as rendered to the Defender were calculated on the basis of budgeted cost. All his evidence amounted to was having a series of invoices and accounts put to him for him to read out figures and then assert that he did not understand the calculation. However, argued Ms Gibson, no attempt had been made to cross examine the witnesses who had spoken (by way of affidavit) to those calculations. Mr Walker's inability to understand the calculations was neither here nor there provided that there was evidence before the court, as there was, that they were calculated in accordance with the Pursuer's usual remuneration, she submitted.

[45] Taking me through each of the proposed findings in fact and directing me to the evidence in support thereof if was Ms Gibson's submission that I should find the Purser entitled to charge its usual remuneration for its management fee; that its usual remuneration was its budgeted costs; and that I should grant decree in accordance with Craves 1, 2 and 5.

[46] Separately, submitted Ms Gibson, as the Defender has led no evidence about the common repairs and as it was a matter of admission that the Pursuer was entitled to recover those costs from the Defender I should grant decree in accordance with Craves 3, 4, 6 and 7.

[47] Finally, submitted Ms Gibson, interest and expenses should be granted as craved.

Submissions for Defender

 

[48] It was Mr O'Hanlon's submission that while he agreed that it was competent for the Pursuer's witnesses to give their evidence by way of affidavit evidence that I could place little or no weight on those affidavits as the witnesses had not be subject to the rigour of cross examination. I had not had the opportunity to assess the witnesses' demeanour so could not assess their reliability and credibility, argued Mr O'Hanlon. As he put it, it was disingenuous to suggest that their evidence was not challenged; it was challenged by Mr Walker.

 

[49] Mr Walker's had given evidence, said Mr O'Hanlon, that there was a contractual relationship between him and the Pursuer that it would only charge at cost. Cost was, said Mr O'Hanlon, actual cost and the Pursuer could not charge on the basis of budget cost.

 

[50] There then followed a lengthy submission, with reference to authority, on the issue of the requirements for the constitution of a contract and the principles for interpretation and construction contracts. In the course of those submissions however Mr O'Hanlon recognised that that was not a submission that it was proper for him to make, firstly because of the terms of the title deeds and, secondly, because of an absence of Record. In the interests of brevity I will not record the detail of the submission as it was an argument that Mr O'Hanlon, quite properly, departed from.

[51] Thereafter Mr O'Hanlon reiterated his submission that the only basis on which the Pursuer could charge was that of actual costs. There was insufficient evidence before me for the Pursuer to discharge the burden on it and the Defender should be assoilzied.

 

Grounds of Decision

 

[52] This was a case in which somewhat curious decisions were taken by parties in relation to the presentation of evidence. I had been persuaded that the Pursuer was entitled to give its evidence by way of affidavit evidence and had expected that those witnesses would then be cross examined. The Defender's position, in part at least, was that the Pursuer had not provided vouching for the basis on which the invoices were rendered. When she was given an opportunity to challenge that vouching it was not taken.

 

[53] Equally curious was the position adopted by the Defender. Initially at least the arguments advanced in submissions suggested an approach to the issues that had not been focused in the Record and which was legally flawed. Quite properly those submissions were not insisted upon but only after they were tested with Mr O'Hanlon and he accepted that they could not be advanced. It was however not really explained why it was thought that it was sufficient from me to hear only from Mr Walker (whose authority to give evidence about the Defender's position was never adequately explained given that she is not sued qua partner but as an individual) and then only to lead him through one set of accounts after another.

 

[54] Whatever the explanations for these matters I had no difficulty in determining that the Pursuer was entitled to the sums sued for, both the management fee and the common repairs costs. In relation to the first it was clear from the terms of the title deeds that it was entitled to its "usual remuneration" and that there was ample evidence before me that that was based on budgeted costs. I did not accept the position adopted by Mr O'Hanlon that I could not place reliance on the affidavits as the authors had not been cross examined. While that was true as a matter of fact the reason was that it was he who did not seek to cross examine the witnesses. This is, after all, an adversarial process and a party that chooses not to challenge the evidence of a witness can be taken to have accepted that evidence. Mr O'Hanlon had already agreed that it was competent for the evidence to be given by way of affidavit and therefore cannot properly maintain the position that I cannot rely on the evidence contained therein when he chose not to challenge that evidence. In the absence of challenge I saw no basis on which I should not accept the evidence of Mr Waddell and Mr Egan and I did so.

 

[55] Equally, for reasons touched on above, it was not sufficient for a witness simply to read figures out loud from a set of accounts, as Mr Walker was, in effect, asked to do without being questioned about those figures. That however made up much of Mr Walker's examination but amounted to little more than reading those figures in to evidence. It did not assist me with reaching an understanding of the issues in dispute.

 

[56] The Defender's position was even more difficult in relation to the sums sought by way of the common repairs. It was a matter of agreement that the Pursuer was entitled to charge for those repairs and had rendered invoices that had gone unpaid. Mr Walker was not asked any questions about those aspects of the claim and therefore there was no evidence before me to counter the evidence in the affidavits. For the reasons given that evidence is accepted.

 

[57] That being so I am satisfied that the Pursuer is entitled to be paid in respect of all the outstanding invoices and decree is granted as craved. Expenses of earlier procedure has been reserved and therefore I wish to be addressed by parties in relation to the question of expenses overall. Expenses are therefore reserved meantime.

 

 

 

 

 

Sheriff