Scottish Sheriff Court Decisions

Act:  Mr McNairney, Advocate for the appellants instructed by

Andrew Haddon & Crowe, Solicitors, Hawick

Alt: Santoni, Solicitor for the respondents

EDINBURGH, 25 April 2014

The Sheriff Principal having resumed consideration of the cause, allows the appeal;  recalls parts 2, 3 and 4 of the interlocutor of 18 November 2013;  remits the cause to the commercial sheriff to determine further procedure;  finds the respondents liable to the appellants in the expenses occasioned by the appeal;  allows an account of expenses to be given in and remits same when lodged to the Auditor of Court to tax and to report;  finds no expenses due to or by in respect of the motion to allow the appeal albeit late and certifies the appeal as suitable for the employment of junior counsel.

(signed) Mhairi M Stephen

NOTE:

1. The action at the instance of Caduceus Investments Limited against Border Property Development Limited is a long running commercial litigation in the Borders.The pursuers Caduceus sue for implement of missives entered into between the parties in respect of various properties in Hawick.The pursuers are the purchasers and the defenders/appellants are the sellers.Alternatively, they crave damages based on the difference between the current value of the properties and the price to be paid in terms of the missives.These proceedings commenced in 2008 and the appeal lies against the sheriff’s interlocutor of 18 November 2013 which recalls the sist and grants decree in terms of the motion lodged on behalf of the pursuers (7/1 of process).

    

2. On 22 January 2014 I heard a motion by the appellants (Border Property) to allow the appeal to be lodged late.At that hearing I heard submissions relating to this cause and also relating to the extract of the decree of 18 November 2013 which appeared to be an incompetent extract firstly as it had been extracted early and secondly the extract on the face of it wrongly states that it is a decree in absence.

    

3. There were other facts and circumstances which pointed towards the appeal court exercising its discretion to allow the appeal late.The other factors included:-
   1. Both sides have contributed to delay in this long running saga.
   2. The action had been sisted on a number of occasions. The court proceedings are characterised by inactivity.Neither party appeared keen to progress this action to a conclusion.
   3. The motion for decree was intimated to solicitors who had not acted for the defenders in these proceedings.

       

4. Following my decision to allow the appeal, to be lodged late, the sheriff prepared a note which is dated 31 January 2014. It is No 15 of process.The sheriff correctly records that the first part of the motion sought to recall the sist and re-enrol the cause for further procedure. He considered that the further procedure included the grant of decree in terms of the remainder of the motion.There is no indication in the sheriff’s note on what basis he decided to exercise his discretion to grant decree.He makes no reference to the nature of these proceedings or the defence.

    

5. I make the following observations with regard to the procedure in this action since it was raised in February 2008.
   • March 2008 skeletal defences are lodged.
   • 24 July 2008 options hearing – discharged and the cause continued for settlement.
   • At the continued hearing on 7 August 2008, no adjustment having been made to the pleadings, the cause is sisted.
   • September 2010 the sheriff ex proprio motu fixed a procedural hearing to enquire as to the progress of the action and agrees to allow the cause to remain sisted.
   • The sist was recalled on 22 October 2012 by the sheriff ex proprio motu and a procedural hearing assigned for 20 November 2012.Between 20 November 2012 and 12 March 2013 the cause is continued on a number of occasions for a variety of reasons including monitoring payment; settlement and clarifying instructions.On 12 March 2013 the cause is once again sisted.

      

6. In the course of these proceedings both parties have been represented by a number of firms of solicitors. There appear to have been discussions between the parties solicitors with regard to a minute of agreement setting out terms of settlement by virtue of which the defenders would make payments to the pursuers.Certain payments appear to have been made. A loan agreement is also mentioned.It does not appear that any agreement was formally signed by or on behalf of either of the parties.Draft agreements are now lodged.

    

7. The pursuers changed agents around the autumn of 2012. Messrs Freelands who now represent the pursuers took on the agency.Messrs Davidson Chalmers withdraw from acting for the defenders on 12 November 2012 and they intimate this to the pursuers’ agents (and, I presume, the court).

    

8. In October 2013 there is correspondence between the pursuers’ solicitors and Messrs Stevenson & Johnston of Langholm the Conveyancing Solicitors acting for the defenders, who indicate that they have instructions to implement the missives.

    

9. A letter of 1 November 2013 from Messrs Freelands, the Solicitors for the pursuers to Messrs Stevenson & Johnston is of some importance.That letter gives intimation of the motion to recall the sist and re-enrol the cause for further procedure.The letter states:

   “We had arrange to have the case sisted when it last called on 12 March 2013.  We enclose herewith a Motion to Recall the sist and to re-enrol the cause for further procedure. The real point is the way in which the action should be resolved”.

    

   The pursuers’ position, according to this letter, is that they want the case brought back into court and further procedure determined.  It then goes on (second page) to make reference to the agreement as far as Messrs Freelands understand it in the absence of the earlier files.  They state:

   “We presently do not have Lindsays files and we are awaiting these to be sent to us so that we can consider the position.  The parties did not actually sign the agreement and again we are not clear why this did not take place”.

    

   They go on to mention that payments were made by the defenders to the pursuers for approximately 22 months.  The letter then states:

   “Accordingly, subject to seeing Lindsays files it would appear that our clients are entitled to decree for breach of the Compromise Agreement to settle litigation for the difference of the sums already paid of £59,148.76 and the sums due to be paid of £161,314.80 being £102,166.04 together with £25,000 being the final payment.”

    

   Crucially the letter goes on to ask if the defenders’ Conveyancing solicitors are in a position to agree that is the sum for which decree should be granted.  They again refer to the motion enclosed and state:

   “If that matter is not to be agreed then potentially the motion may require to be dismissed and we would have to either amend the present proceedings or initiate minute proceedings to confirm the terms of settlement between the parties.”

    

   The writer signs off by stating “other issues may become clearer when we have had sight of Lindsays files”.

    

   This is an important but curious letter.  Clearly the writer is not in possession of the pursuers “former solicitors” file and is therefore not in possession of the full facts upon which he can base any amendment or motion for decree.

    

10. The motion (7/1) is in four parts:
    1. seeking recall of the sist and further procedure;
    2. to grant decree in terms of the alternative second crave in the sum of £127,166.04;
    3. to find the defenders liable in expenses; and
    4. to dismiss the remaining craves.

       It is that motion the sheriff requires to consider when it is presented to him in chambers, unopposed.

       APPELLANTS’ SUBMISSIONS

11. Mr McNairney for the appellants based his submissions on the amended note of appeal.The note of appeal as now amended contains three grounds of appeal or propositions which suggest that the interlocutor must be recalled.Firstly, the pursuers’ motion for decree No 7/1 of process (parts 2 and 3) is incompetent.Secondly, that the sheriff had erred in law in granting the motion and by granting decree in favour of the respondents. There is no basis in the pleadings for granting decree for the amended crave sought by the respondents.Thirdly, even if the motion is competent and the sheriff was entitled to consider granting decree the sheriff erred in the exercise of his discretion by so doing.The interests of justice pointed towards the appeal being allowed. The interlocutor or at least parts 2, 3 and 4 of the interlocutor of 18 November 2013 should be recalled and the cause remitted to the sheriff for further procedure.

     

12. The appellants’ first ground of appeal relates to the competence of the motion.Mr McNairney argued that the motion 7/1 of process is incompetent.It is incompetent having regard to this being a defended action.The respondents’ craves in the initial writ relate to implement of missives which failing damages.There are other craves relating to interdict, expenses etc that are of no significance in this appeal.As is noted in Chapter 14 of Macphail on Sheriff Court Practice there are limited ways in which a defended action may be disposed of without proof.There is no question of this being an agreed or joint motion for decree on the basis that a settlement or agreement had been reached.The sheriff’s decision to grant decree was akin to a decree by default. Rule 16 of the Ordinary Cause Rules deals with decrees by default but Rule 16 does not provide an exhaustive list of situations where default may arise.The sheriff is entitled to grant decree by virtue of the exercise of the inherent jurisdiction of the court (Newman Shopfitters Limited v M J Gleeson Group PLC 2003 SLT 83).Decree by default commonly passes when a party fails to appear or be represented at a diet of the court that he requires to attend.In this appeal the appellants’ failure or default is a failure to lodge opposition to a motion.Otherwise, the appellants cannot be criticised. They have not caused any delay or perpetrated an abuse of process.There have, of course, been considerable dealings between the parties in these proceedings which have been sisted almost continuously since proceedings commenced in February of 2008.

     

13. The challenge to the competence of the respondents’ motion relates to part 2 of the motion seeking decree in an amended alternative crave 2 for which there is no basis in the pursuers’ pleadings.Part 2 of the motion seeks decree for a sum calculated solely on the basis that the appellants have breached the terms of a settlement or loan agreement, neither of which had never been finalised or formalised between the parties.There are no averments on the part of the pursuers to support that basis of claim nor is there a plea in law in support of that claim. There is no crave for breach of an agreement to settle.The letter from the respondents’ solicitors dated 1 November 2013 which effectively intimates the motion makes that abundantly clear.A calculation is contained in the letter (second page).The writer of that letter clearly acknowledges the difficulties in proceeding with the case on that basis.Amendment or a minute would be required specifying the basis for this further amended crave.Accordingly, the motion is incompetent as there is no case based upon breach of a loan agreement or breach of settlement terms.

     

14. The second leg of the appellants’ argument related to the manner in which the sheriff dealt with the motion and as Mr McNairney suggested the “internal inconsistency” between part 1 and the remaining parts of the motion.Part 1 of the motion sought recall of the sist and further procedure.To do justice between the parties the sheriff ought to have appointed a hearing to allow parties or certainly the pursuers to address him.The sheriff had failed to address the underlying pleadings in considering the terms of the motion.The sheriff had failed to consider the propriety of disposing of this defended action by way of motion.The motion was not an intelligible disposal of the action in light of the pleadings.Additionally, Mr McNairney reminded me that the motion had been intimated to a firm of solicitors who were not acting for the appellants in the court process.These solicitors had referred the letter of 1 November 2013 and motion to the defenders as the issues raised in the motion were outwith their area of expertise or knowledge.They had been dealing solely as the appellants’ conveyancing solicitors.Accordingly, a question arises as to whether the motion was indeed properly intimated to the appellants.

     

15. Thirdly, in granting decree in terms of the motion did the sheriff properly exercise his discretion?Having regard to the terms of the sheriff’s note the only conclusion that can be drawn is that the sheriff did not exercise his discretion at all.The sheriff ought to have followed the approach set down by Sheriff Principal Macphail in Canmore Housing Association v Scott 2003 SLT 68. The sheriff had no material on which to exercise his discretion and a fair reading of the sheriff’s note appears to indicate that he simply granted the motion because he was asked to do so.Accordingly, on any or all of the three grounds argued the appeal should be allowed and the interlocutor recalled.On the matter of expenses, I was asked to award expenses in favour of the appellants. Not only was the respondents’ motion incompetent, it was known by the respondents’ solicitor to be incompetent or at least problematic and premature.There was no rule in “default” appeals that the defaulting party, even if successful, should bear the expenses of the appeal.Mr McNairney noted that the cases where expenses were awarded against the successful appellant arose as a result of a concession on the part of the appellant. There is no rule to the effect that the defaulting appellant should bear the expenses.In that regard I was referred to the cases of Coatbridge Health Studios Limited v Alexander George & Company (Investments) Limited 1991 SC 342 and Hyslop v Flaherty 1933 SC 588. In this case the appeal was necessary to correct the inherent difficulty occasioned by the respondents’ motion.A finding of no expenses due to or by either party in respect of the appeal procedure was the appellants’ secondary position on expenses.I was asked to sanction the cause as suitable for employment of junior counsel having regard to the value of the case and the novelty of certain issues arising on appeal particularly the classification of decree.

     

    RESPONDENTS’ SUBMISSIONS

16. Mr Santoni for the respondents was careful to point out the background to the action and the parallel settlement proposals which had been taking place between the parties whilst the cause was sisted.I was informed that the respondents were, in effect, negotiating to buy the appellant company. The main assets of the appellant company are the properties subject to the Missives.It appears that negotiations surrounding that purchase foundered however, I was referred to a draft settlement agreement and also a loan agreement between the parties albeit neither agreement had been executed.Nevertheless, the appellants had made payments in terms of the loan agreement which, according to Mr Santoni, were clearly indicative of an agreement to settle which the appellants were seeking to extricate themselves from.In other words the appellants were in breach of their obligations under the settlement agreement.

     

17. Mr Santoni referred me to a course of correspondence between the parties.It is clear that both parties had used various solicitors to attempt to negotiate resolution of their dispute either to implement the missives or to ensure that the loan agreement terms were implemented.Mr Santoni considered that this information was highly relevant to the terms of the motion.He maintained that his firm had corresponded with the only solicitors he knew to be acting for the appellants and therefore he was entitled to intimate the motion to that firm of solicitors even if they had had no involvement in the court proceedings.Mr Santoni alerted me to the nature of the defences.They were purely skeletal in nature.Certain adjustments to the defences are proposed in the event that decree is recalled.The pursuers and respondents were entitled to seek decree in the terms they did on the basis that there was a clear agreement to settle which had been breached by the appellant.The sheriff was entitled to have regard to the fact that there was no real defence to the action the defences being purely skeletal.There was discussion of the terms of Mr Santoni’s letter of intimation of 1 November 2013 which sought the agreement of the appellants’ solicitor to settle on the basis that the sum of £127,166.04 would be paid by the appellants to the respondents.Mr Santoni took the view that the appellants’ failure to oppose the motion was tantamount to acquiescence and the sheriff was therefore entitled to grant decree as he did.

     

18. On the question of expenses Mr Santoni made two submissions.Firstly, there had been a failure on the part of the appellants to ensure that the motion was opposed. Had opposition been lodged this would have ensured that there was a calling of the case or a hearing in court.Messrs Stevenson and Johnston had advised the appellants of the nature of the motion and the appellants themselves had undertaken to deal with the matter of the motion.They had failed to do so and it was their failure that had prompted the need for an appeal.In these circumstances expenses should be granted to the pursuers and respondents as the appellants had been responsible for the difficulties they found themselves in by failing to oppose the motion.Mr Santoni’s secondary position on expenses was that there should be no award of expenses due to or by.

     

19. Mr Santoni reminded me that in the event that the appeal is allowed it would be necessary to reinstate the interim interdict granted in February 2008 against disposal of any of the properties.

     

    DECISION

20. When the sheriff granted decree in terms of the pursuers’ motion he disposed of this defended action without proof in the absence of any joint motion or joint minute proposing settlement of the cause.The motion was not consented to.It was simply not opposed.It is now clear that the failure to mark opposition was an omission on the part of the appellants.Following the withdrawal of the appellants’ previous solicitors, Messrs Davidson Chalmers, no other solicitors had intimated an interest in these proceedings on behalf of the appellants to the sheriff clerk in Jedburgh.

     

21. Chapter 14 of Macphail deals with disposal of a defended action without proof under the headings of:
    1. Decree by default
    2. Abandonment
    3. Settlement and
    4. Summary Decree.

                   In the circumstances of this case it is only decree by default that has relevance.  Decree by default is the closest category to the method of disposal in this case which was by decree granted on an unopposed motion in defended proceedings by the sheriff in chambers.  The appellants failure to mark opposition cannot be categorised as a default it was an omission and is not indicative of consent.

        

22. Default is not restricted to the terms of OCR 16 where failure to attend or be represented at a diet may constitute a “default”.This chapter in Sheriff Court Practice together with two decisions of my predecessor Sheriff Principal Macphail more than adequately set out the court’s powers with regard to default.The case of Newman Shopfitters Limited v MJ Gleeson Group PLC 2003 SLT (Sh Ct) 83 considers the court’s inherent jurisdiction to bring to an end litigation.The court may exercise its jurisdiction in the public interest.There is a public interest that litigation should not be allowed to continue where there had been an inordinate delay and the pursuers had taken no steps to progress the litigation.The inherent power of the court is not restricted to delay but may include other abuse of process.The decision recognises the discretionary nature of the sheriff’s decision. Canmore Housing Association Limited v Scott 2003 SLT 68 emphasised the discretionary nature of the sheriff’s decision.The Sheriff Principal’s dicta at paragraphs 6 and 7 are entirely apt in dealing with the current appeal.That case involved the pursuers’ failure to appear at a peremptory diet fixed in respect of the defenders’ solicitors’ withdrawal from acting.The failure on the part of the pursuers to appear resulted in decree by default.In Canmore the appeal was allowed as the Sheriff Principal considered that the sheriff did not have sufficient material upon which to exercise his discretion to grant decree by default.The sheriff simply knew there was no appearance by or on behalf of the pursuers. He did not know the reason.This decision stresses the “interests of justice” considerations which should apply when the sheriff is considering whether to grant decree or not.The sheriff must make a reasoned decision in other words.Canmore sets out the approach which the court should take when considering granting decree.As I observed during the appeal this case involves a situation which, in my view, requires the sheriff to take particular care before granting decree as a paper exercise in chambers.In this case there had been no “default” as such in the sense that there had been no requirement for an appearance.There had simply been a failure to lodge opposition to the motion.It was incumbent upon the sheriff to have regard to the terms of the motion;whether it was a competent motion and whether it is a motion which in the absence of any further oral or written submission he could properly grant.It would be inequitable for a party in the situation which the appellants found themselves to be in a worse position than that of a party who was in default in terms of OCR 16.In terms of the Sheriff Principal’s decision in Canmore the sheriff in the default situation should “give the party further opportunity to appear, and this give himself an opportunity to reach a reasoned decision before pronouncing such a decree”.It is important that the sheriff approaches that discretionary power in a measured and reasoned manner otherwise if decree by default is granted without having the opportunity of considering the full and relevant facts as Sheriff Principal Macphail states:

    “There is a risk that an appeal court to which an explanation has been tendered may decide that the decree must be recalled in the interests of justice.  The action would then have to resume its progress after an interruption that might have been avoided.”

     

    In this case the sheriff’s note gives some indication of his approach to the motion.  In the second paragraph of the note the sheriff indicates that the motion had been checked by the sheriff clerk’s office to confirm that it had been properly intimated to Messrs Stevenson and Johnston, solicitors, Langholm.  As to the sheriff’s reasons for granting the motion he states:

    “As no opposition to this motion had been lodged, I granted decree as requested.  On granting decree I noted the first part of the motion which was to re-enrol the cause for further procedure and as the intimated motion was unopposed, that further procedure was to grant decree in terms of the remainder of the motion.”

     

    On the plainest reading of the sheriff’s note it appears that the sheriff considered that his function was simply to grant decree because it was requested and unopposed without considering the terms of the motion itself and the pleadings.  The sheriff does not appear to have regard to the advice given in Macphail Sheriff Court Practice 14.12:

    “Before granting decree by default in favour of a pursuer, the sheriff should examine the crave of the writ in order to ascertain that decree by default will be an appropriate and intelligible disposal.  If there are alternative craves, decree should be granted in terms of the primary crave and, if that is not implemented, the pursuer should move for decree in terms of the alternative crave.”

     

    In the present proceedings the motion is in terms of the second or alternative crave which on the face of the writ relates to damages.  One would expect there to be vouching in the form of valuations to justify damages on the basis claimed, that being the difference between the missive price and the actual value.  It is clear that the terms of the motion claim interest from a date prior to decree rather than from the date of decree as stated in the second crave.  Of course, what is evident from the submissions before me, is that the respondents’ intention was to seek decree for a sum of money based on a breach of a loan agreement in respect of which there are no averments, no crave and no plea in law in the initial writ.  The second part of the motion does not relate to the primary crave of implement nor even the second or alternative crave of damages.  On that basis the motion or at least parts 2 to 4 of the motion are incompetent there being no case and no basis for granting decree for breach of a settlement agreement.

     

23. The sheriff was dealing with an unopposed chambers motion.Rule 15.5 deals with “the hearing of motions”. 15.5(1) states:-

    “subject to paragraph (2), where no notice of opposition is lodged with the sheriff clerk within the period specified in Rule 15.3(1)(c), or ordered by virtue of Rule 15.2(4), the motion shall be determined by the sheriff in chambers without the appearance of parties, unless the sheriff otherwise directs.”

     

    Part 1 of the motion invites further procedure.  I accept that there is force in the argument put forward on behalf of the appellants that there is a clear inconsistency between the terms of Part 1 of the motion and the following parts.  Of course, it is not at all uncommon for the sheriff to consider part 1 by recalling the sist and putting the case out for a hearing.  Given the requirement that the sheriff ought to have had regard to the nature of the motion and the underlying pleadings in order to determine the disposal of the defended cause and indeed, to determine exactly the basis upon which decree was sought, it would have been proper and reasonable for the sheriff to appoint the cause to a hearing to be addressed by parties or certainly by the pursuers as the proposer of the motion.  A brief perusal of the procedural history and the interlocutors would have indicated quite clearly that this was a longstanding action where there had been little, if any, apparent activity on the part of either party.  Obviously, the pursuer is the party who brings the action to court and who ought to have an interest in pursuing the action to a conclusion.  Although settlement has been referred to in the interlocutors this is not a joint motion and it is not a joint proposal to settle the action.  Further perusal of the process would indicate that the firm of solicitors to whom intimation was made had not been part of this court process.  The sheriff ought to have had regard to the fact that defences, albeit skeletal defences, had been lodged as long ago as March 2008.  If the sheriff was contemplating granting decree in terms of part 2 he must, of necessity, have required to consider what was to happen with the defences.  The pursuers’ motion was not a motion for summary decree in terms of Chapter 17 of the Ordinary Cause Rules.

     

24. The respondents’ position with regard to these proceedings appears to be that they wish to enforce an informal arrangement to settle on some basis which is separate and removed from the craves in this action.There is no formal agreement as to settlement.I accept that the course of dealings towards settlement must be frustrating however, it is clear that there are other factors at play which form no part of these proceedings.The respondents’ submissions regarding attempts to settle are therefore part of the background but not strictly relevant to the case as pled.Mr Santoni, for the respondents, agreed that the action lay in reserve to be used ultimately as a tool in the bargaining process between the parties.It is difficult for the respondents’ solicitor to argue that the sheriff was entitled in law to grant decree in terms of his motion standing the terms of his letter of intimation to the appellants’ conveyancing solicitors dated 1 November 2013.In that letter he represents firstly, that the respondents wish to bring the action back into court and assign a hearing for new procedure with a view to resolving matters.Thereafter in the passage to which I have referred at para 9 he presents a proposition that the case could settle on some basis quite separate from and different to the craves in the initial writ but reference to the sums paid in terms of the purported settlement agreement. The respondents’ solicitor acknowledges that this is a difficult proposition in law and would most likely be dismissed if insisted upon.Given the manner in which the motion was dealt with, (unopposed) this is most unfortunate as there is clear prejudice to the appellants.The appellants’ conveyancing solicitor is entitled to read this letter at its face value.It is clear that the respondents do not have all of the information and they do not have the previous solicitors’ file. It is very tentative.They have every reason to think that if they do not agree then the respondents will not be proceeding to ask the court to grant decree.The rules of court and procedure are designed to be a means to achieving justice between the parties.The parties are entitled to a just resolution of their dispute in accordance with their respective rights.There must be consideration of fairness and equity when judging where the interests of justice lie.Our system of justice will have regard to circumstances where, as appears to me in this case, one party is putting forward a proposition which he knows to be without a proper basis in law.The appellants’ failure to lodge opposition to the motion should not produce a result that unsound propositions are given the imprimatur of the court. Litigants are entitled to assume that the sheriff will carefully apply the law and exercise his discretion properly.As I have said, a party is entitled to rely on our system of justice providing a fair manner for resolving disputes. It would be wrong if I failed to have regard to circumstances where simply due to lack of opposition, the court had failed to recognise the legal issue and deal with it.I reject entirely the proposition that the lack of opposition is indicative of deemed consent.That must be a mis-statement of the law applying the decisions on decree by default to which I have applied mutatis mutandis to this situation.

     

25. In my opinion there are a number of reasons why the decree must be recalled.Firstly, there is no basis in the pleadings to grant decree in terms of the second part of the motion;secondly, the sheriff ought to have enquired into the facts and circumstances before considering the grant of decree in a defended action.In other words, the absence of a contradictor did not infer that the motion was correct in law;followed upon an agreement to settle or was consent to.The procedural history is both relevant and peculiar.The pursuers and respondents have not advanced their action in five and a half years.The sheriff ought to have recognised that once the sist was recalled and in the absence of agreement or consent a hearing was required to consider the remaining parts of the motion standing the fact that the action is defended and having regard to the unusual procedural background.Had the sheriff perused the process it was clear the intimation had not been effected on the appellants but instead upon another firm of solicitors who had never featured in this process.Thirdly, even if the sheriff considered the matter of further procedure, as he says he did, and rejected the option of fixing a hearing, he then had to consider whether to grant decree as sought.In doing so he required to make a decision in the exercise of his discretion.That involves him weighing up the legal basis of the action and its craves together with any defences lodged.He knew that this was a defended cause and ought to have known that by granting decree he was bringing the action to a conclusion without permitting a proof.He was bringing it to a conclusion without further enquiry into the terms of the motion and in the complete absence of a joint minute agreeing settlement.The sheriff was, of course, entitled to take into account what he knew of the case from the interlocutors.He was aware that no opposition had been intimated and lodged.The lack of opposition does not take the sheriff very far at all.To infer consent from silence would be an error unless there was material available to allow the sheriff to do so.In my view, it would be wrong to place a party who had failed to lodge opposition to a motion in a worse position than the party who failed to appear at a diet due to a “diary error” or some other inadvertence.In the latter circumstances the recommended course is to give the defaulting party an opportunity to appear or explain which in turn will provide the sheriff with material on which he can make a reasoned decision.

     

26. The view expressed by Sheriff Principal Macphail, as he then was, does not suggest that this is a hard and fast rule.There will be circumstances where it is appropriate to grant decree by default immediately.However, the sheriff will have a basis for doing that for example, the serial defaulter who is delaying the action.Sheriffs are also familiar with the situation where parties have agreed settlement and the case is continued to another diet to allow settlement to be effected.Parties frequently fail to attend or be represented at the continued diet.The sheriff is entitled to grant decree of dismissal in such circumstances where it is reasonable to assume that the parties have effected settlement and for their own convenience have decided not to appear.

     

27. Finally, the inevitable conclusion to be drawn from the sheriff’s note of 31 January 2014 is that the sheriff did not weigh up the circumstances of the case at all and did not exercise discretion at all. Instead he simply granted decree in terms of parts 2, 3 and 4 of the motion “as no opposition to this motion had been lodged”.It goes without saying that the sheriff’s failure to consider the motion and exercise his discretion must vitiate his decision.Accordingly, these reasons and the interests of justice demand that the decree must be recalled.I will allow the appeal, recall parts 2, 3 and 4 of the interlocutor of 18 November 2013 and remit to the commercial sheriff to deal with further procedure in this case.

     

28. It may be difficult to categorise the nature of decree which the sheriff granted on 18 November.This appeal does not proceed simply on the appellants’ default however.There are substantial reasons for allowing this appeal.There is no legal basis in the pleadings for granting part 2 of the motion.Part 2 proceeds on a proposition which has no basis in the pleadings and therefore must be incompetent.It is accordingly, my view that there are clear reasons why the appellants should be allowed the expenses of the appeal. Expenses have to be viewed through the prism of the merits of the appeal. I propose to award expenses in favour of the appellants. However, I propose to make a finding of no expenses due to or by in respect of the motion heard on 22 January with regard to the late appeal.The lateness of the appeal was due to the appellants’ failure to take adequate steps to deal with the respondents’ intimation of the motion. This led to the appellants’ failure to lodge opposition to the motion.It is not explained why the appellants did not arrange to make enquiry with the sheriff clerk as to the outcome of the respondents’ application to the court on 18 November.On any view it was likely that the court would be looking towards further procedure and these are matters which the appellants failed to take steps to address.In these circumstances it appears reasonable that each party should bear their own expenses in respect of that part of the appeal process.I also certify the appeal as suitable for the employment of junior counsel.

     

29. Recall of part 4 of the interlocutor of 18 November 2013 will have the effect of reviving the interim orders previously made in respect of the third and fourth craves of the initial writ.This will restore the status quo and the interim protective orders granted on 8 February 2008.