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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> PS Independent Trustees Ltd & Ors v. Kershaw & Ors [2008] ScotCS CSOH_78 (23 May 2008)
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Cite as: [2008] CSOH 78, [2008] ScotCS CSOH_78

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OUTER HOUSE, COURT OF SESSION

 

[2008] CSOH 78

 

A416/04

 

 

 

 

 

 

 

 

 

 

 

OPINION OF LORD GLENNIE

 

in the cause

 

PS INDEPENDENT TRUSTEES LIMITED and OTHERS

 

Pursuers;

 

against

 

DAVID KERSHAW and OTHERS

 

Defenders:

 

­­­­­­­­­­­­­­­­­________________

 

 

 

Pursuers: Clark, Q.C.; Biggart Baillie

First & Second Defenders: Cunningham; CMS Cameron McKenna

Third Defenders: Brodies

Fourth Defender: John MacLennan, Party

Fifth Defender: Mackenzie; Morton Fraser

 

23 May 2008

 

INTRODUCTION

[1] This opinion arises out of a further discussion on the Procedure Roll in this action. For those who are interested, the subject matter of the proceedings is explained in my earlier Opinions dated 9 March and 10 July 2007 (respectively 2007 CSOH 50 and 2007 CSOH 122). Since the second of those Opinions, there has been a further lengthy amendment process at the instance of the pursuers. At the beginning of this hearing I granted leave to amend in terms of the Minute of Amendment and Answers all as adjusted to that date. The Procedure Roll discussion took place on the basis of the Record as so amended. In its present amended form the Record runs to over 150 pages, though this includes passages which have been deleted during the amendment process, it having been anticipated (wrongly, as it turned out) that, since the motion to amend was opposed, there would be a detailed consideration of individual proposed amendments. By the end of the hearing it became apparent that the pursuers required to make further small amendments to incorporate schedules of loss upon which they wished to rely and I granted them leave so to do.

[2] The debate leading to my decision of March 2007 was at the instance of the third, fourth and fifth defenders ("the trustees"), who were all at various times trustees of the Blyth & Blyth Pension Scheme ("the Scheme"). I held the claims against the third defender to be irrelevant, as a result of which the pursuers are no longer continuing at all against the third defender. So far as concerns the fourth and fifth defenders - to whom I shall refer as "the remaining trustees" - I held that both the contributions claim and the early retirements claim as pled against them were irrelevant. The pursuers have made it clear that they do not seek to reclaim that decision. I expressed the view in paras.[100]-[103] that the investments claim pled against them was not necessarily irrelevant, and I gave the pursuers an opportunity to amend to save it. In respect of the expenses claim as directed against them, I allowed a proof before answer.

[3] The investments claim and the expenses claim, therefore, remain potentially live as against the remaining trustees. However, the pleadings relative to all claims have undergone very substantial amendment and on the basis of that the remaining trustees now seek to exclude both the investments claim and the expenses claim from probation.

[4] The first and second defenders, respectively the Scheme Actuary and his employers, to whom I shall refer as "the actuary" or "the actuaries" as appropriate, took no part in the first debate, but seek at this stage to raise issues as to the claims made against them.

[5] In para.[30] of my Opinion of March 2007, I set out in full the conclusions to the Summons as they then stood. These have been substantially re-cast during the amendment process. They now read as follows:

"1. For payment by the first and second defenders jointly and severally to the pursuers of the sum of [£6,267,643] together with interest thereon at the rate of eight per cent a year from 30 April 2001, or such other date or dates as to the court shall seem proper, until payment.

2. Alternatively to Conclusion 1 hereof,

(i) For payment by the first, second, fourth and fifth defenders jointly and severally or severally to the pursuers of the sum of [£1,992,621] together with interest thereon at the rate of eight per cent a year from 31 May 2002, or such other date as to the court shall seem proper, until payment.

(ii) For payment by the first, second, fourth and fifth defenders jointly and severally or severally of the sum of [£223,168] together with interest thereon at the rate of eight per cent a year from 31 May 2002, or such other date as to the court shall seem proper, until payment.

(iii) For payment by the first and second defenders, jointly and severally, of the sum of [£2,444,000] together with interest thereon at the rate of eight per cent a year from 31 May 2002, or such other date as to the court shall seem proper, until payment.

Only conclusions 2(i) and (ii) now assert any liability on the part of the remaining trustees, and those are on the basis that their liability is joint and several with that of the actuaries. Conclusion 2(i) arises from the investments claim while conclusion 2(ii) arises from the expenses claim.

[6] I propose first to consider the arguments between the pursuers and the actuaries and then go on to deal with those between the pursuers and the trustees.

 

THE CLAIMS AGAINST THE ACTUARIES

[7] The pursuers allege in Article 15 that the fund of which they were trustees sustained loss and damage as a consequence of the actuaries' breach of contract and/or fault and negligence. They aver that it was the first defender's duty as Scheme Actuary, in carrying out his duties and functions, to take reasonable care to exercise the degree of skill and care reasonably to be expected of an ordinary competent actuary holding himself out as competent to assume the role of the Scheme Actuary of a pension scheme such as the one with which the action is concerned. The second defenders are alleged to be vicariously liable for those breaches of contract or duty by the first defender, and it is not disputed that they will be vicariously liable for any such breaches as may be established against the first defender.

[8] The pursuers' claims against the actuaries were originally advanced under the same heads as were those against the trustees, viz.: the contributions claim; the investments claim; the early retirements claim; and the expenses claim. In the Amended Summons, the investments claim is no longer pressed as against them. That leaves, as against the actuaries, the contributions claim, the early retirements claim and the expenses claim.

[9] The contributions claim: The summary of the contributions claim set out in paras.[9]-[14] of my Opinion of March 2007 provides the broad background for an understanding of the way the claim is put against the actuaries. The trustees are required to obtain advice from the Scheme Actuary in respect of the minimum funding requirement ("MFR") for the Scheme; and, depending upon that advice, are themselves under certain duties in relation to the funding of the Scheme by the employer. The main factual averments are in Article 8. In their present form, now directed solely against the actuaries, those averments have been considerably amplified but for present purposes it is not necessary to set out the additional material in any detail, save to say that they include averments that the first defender knew that the company (the employer) could not make contributions to the Scheme at the recommended rate. The criticisms of the actuaries under this head are focused in Article 16. It is said that the first defender had a duty to advise the trustees for the purpose of the trustees' setting of employer contribution rates to the Scheme;

"and in the exercise of the said duty (i) not to put forward a Schedule of Contributions which required contributions from the Company which they knew or ought to have known could not be met, and (ii) to advise the trustees that he had given the Company advice to the effect that it could avoid, by indefinite postponement, the making of its lump sum contributions."

Various other duties are averred in detail. They include the following:

"It was his duty to give advice to the Trustees which was consistent with the aim, stated in the SIP, of having sufficient assets to exceed MFR liabilities by an adequate margin. As was or ought to have been obvious to him, he had a clear and significant conflict of interest. He advised the Company how to delay, minimise or avoid MFR contributions. He advised the Company that a means of mitigating the MFR deficit was to increase the normal retirement age for members of the Scheme to 75 for all of their benefits even though it only applied to one month's benefit accrual. It was his duty to advise the Trustees that increasing the pension age (for example to normal retirement date of 75) could not and would not reduce the actual liabilities which the Scheme had to its members in respect of entitlements up to the date of the change in NRD, as it did not have retrospective effect. It was his duty to advise the Trustees of the implications for the financing and solvency of the Scheme of the changes to the Schedule of Contributions from monthly contributions to substantially reduced monthly contributions and substantial lump sum payments which could be postponed. It was his duty not to put the interests of the Company before the interests of the Trustees."

There is then this passage:

"The first defender knew or ought to have known at the latest by 31 March 2001 that because of the inability of the Company to make the required contributions the Scheme would not be able to meet its liabilities. It was his duty to advise the Trustees at that time that the Scheme should be wound up. He knew or ought to have known that, if he did not so advise, the scheme's investments might well decline in value, and early retirements might well occur and expenses might well be paid from the scheme. In each and all of said duties he failed. No actuary of ordinary competence exercising reasonable care and skill and providing the services of Scheme Actuary to a pension scheme would have failed in the said respects. But for his said failures the loss and damage hereinafter condescended upon would not have occurred. In relation to his conduct as Scheme Actuary for the Scheme, the first defender was charged, in terms of the Faculty of Actuaries Disciplinary Scheme, with being guilty of professional misconduct. On about 26 October 2007, the Faculty of Actuaries Disciplinary Tribunal Panel found that eight of the charges of professional misconduct were proved. In relation to contributions, it was found proved that the first defender failed to deal appropriately with a potential conflict of interest between the Trustees and the company when providing advice following the April 2000 valuation. It was also found proved that the first defender failed to advise the Trustees to consider other options when considering the changes to the Schedule of Contributions and to the Normal Retirement Date, and in so doing he failed to ensure that the Trustees' interests were protected. It was also found proved that the first defender failed to advise the Trustees of the effect of changes to the Schedule of Contributions on the financing and solvency of the Scheme."

Article 16 then goes on to answer the averments made by the defenders.

[10] The early retirements claim: The background to the early retirements claim as presented against the trustees is summarised, sufficiently for present purposes, in paras.[21]-[23] of my Opinion of March 2007. As directed against the actuaries, the claim is focused in Article 18 of the Amended Summons in the following terms:

"... the first defender had a duty to warn the Trustees of the implications, including that the MFR deficit would be increased by some £995,000, for the Scheme of allowing early retirement on their full benefit entitlements under the Scheme Rules by the third, fourth and sixth defenders. It was his duty to take account of and advise the Trustees as to the impact on funding of the Scheme of the said early retirements. It was his duty when advising the Trustees on the reasonableness of the proposed revised contribution rate by the Company of £230,000 per annum to take account of the impact of said early retirements on the fund. In each and all of said duties he failed. No actuary of ordinary competence exercising reasonable care and skill and providing the services of Scheme Actuary to a pension scheme would have failed in the said respects. But for his said failures the loss and damage hereinafter condescended upon would not have occurred. In its findings on about 26 October 2007, the Faculty of Actuaries Disciplinary Tribunal Panel found, in relation to the said early retirements, that it was proved that the first defender had failed to advise the Trustees on the implications of their actions with regard to allowing early retirements."

[11] The expenses claim: The background to the expenses claim as presented against the trustees is summarised in paras.[26]-[28] of my Opinion of March 2007. Complaint is made of their decision in May 2002 to repay administrative expenses to the Company from the Scheme at a time when the Scheme was in substantial deficit. The amount repaid between May and November 2002 was £223,168. It is said that a significant portion of this sum repaid to it was used by the company to pay professional fees to the actuaries. It is averred (in Article 14) that the first defender was aware that the company and the second defender (his employers) each had a direct financial interest in relation to expenses. It is averred that the first defender gave advice broadly to the effect that it would be appropriate for the Fund to repay the expenses to the company. The complaint is that the first defender did not make clear to the trustees what assumptions about the level and incidence of expenses he was making in giving that advice; nor did he disclose the actuaries' financial interest in the repayment of expenses about which he was giving advice. It is said that he put the interests of the actuaries and the company ahead of those of the trustees. The alleged breaches of duty in these respects are focused in Article 19 where it is said that the first defender had a duty to advise the trustees: (a) of the consequences of their actions in respect of refunds of expenses; (b) of the implications for the Fund of refunding expenses; and (c) that the effect of the refund of expenses would be further to reduce security of benefits of Scheme members. Further, it is alleged that it was his duty to make clear what assumptions about the level and incidence of expenses he was making when giving the advice about payment of expenses; to disclose his employers' (i.e. the actuaries') financial interest when giving such advice; and not to put the interests of the actuaries and the company before those of the trustees. In each of those duties it is averred that the first defender failed and that but for that failure the loss and damage condescended upon would not have occurred. The pursuers then go on to make reference to the findings of the Faculty of Actuaries Disciplinary Tribunal Panel. They aver that the Panel found

"in relation to expenses, that it was proved that the first defender failed to state clearly what assumptions he was making when giving advice concerning payment of expenses ... It was also found proved that the first defender had failed to disclose his employers' financial interest when giving advice about the repayment of expenses. It was also found proved that the first defender had failed to deal appropriately with a conflict of interest between the Trustees and the Company when providing advice about the Scheme expenses."

[12] Some of the averments concerning the findings of the Disciplinary Tribunal Panel were picked up and relied upon by the fourth and fifth defenders in their pleadings. I need not set them out. Mr Cunningham, who appeared for the actuaries, provided me with a full list of references; and the points he made apply equally to all of these references.

[13] Mr Cunningham presented his arguments under reference to a Note of Argument and under a number of headings. I take each point in turn.

(i) Averments relating to the Disciplinary Scheme of the Faculty of Actuaries

[14] Mr Cunningham sought to exclude from probation all the averments relating to the findings by the Disciplinary Tribunal Panel. He argued that they were not relevant to the issues in the action. The disciplinary proceedings were governed by the Disciplinary Scheme of the Faculty of Actuaries. The purpose of proceedings under that Disciplinary Scheme was quite different from that of civil proceedings in court. Disciplinary proceedings were brought out of concern for the public interest. The test for misconduct under the Disciplinary Scheme was not the same as that for professional negligence set out in Hunter v Hanley 1955 S.C. (H.L.) 200. He took me to the Scheme itself and explained the various stages of the complaints process. He submitted that the Panel was not a purely specialist panel. He emphasised that witnesses were not compellable in disciplinary proceedings. He suggested that if the findings of the Disciplinary Tribunal Panel were to be relied on at proof, that might lead to a close examination of the charges, the processes before the panel and other relevant matters, all of which would considerably extend the length of the proof.

[15] I accept that the findings of the Disciplinary Tribunal Panel are not determinative in a civil proceeding against the actuaries. I also accept that the issue before the Disciplinary Tribunal Panel is, to some extent, different from that which is before the court in a civil negligence action. However, I note that Rule 1.6 of the Disciplinary Rules defines misconduct as inter alia

"any conduct by a Member ... in the course of carrying out professional duties or otherwise constituting a failure by that member to comply with the standards of ... competence or professional judgment which other Members or the public might reasonably expect of a Member having regard to any advice, guidance, memorandum or statement of professional conduct, practice or duties which may be given and published by the Faculty ... and to all other relevant circumstances."

Whilst this definition does not mirror precisely the test in Hunter v Hanley, it clearly overlaps with it. It seems to me inevitable, therefore, that criticisms of the first defender by his peers under a formal system of adjudicating upon complaints will be referred to in evidence in any proof. It may, for example, be used to cross-examine any expert witness called by the first defender. Mr Cunningham accepted that the Disciplinary Scheme itself might well be relevant at the proof as helping to show what was required of an actuary. If that is so, it must surely be relevant, albeit not decisive, to ascertain what findings have been made about his alleged shortcomings and on what basis. On that basis it is sensible, though it might be argued that it is not strictly necessary, that the pursuers should refer in their pleadings to the findings of the Disciplinary Panel on which they rely; otherwise they might be at risk of having relevant evidence excluded or cross examination stopped for lack of record. The averments give notice of the line to be taken by the pursuers. I see no reason why those averments should be excluded from probation.

 

(ii) Relevancy and Specification Generally

[16] Under this heading, Mr Cunningham raised a number of discrete points of relevancy and specification. For example, he argued that in certain passages in the pleadings the pursuers had failed to give adequate specification in support of their averments of what the first defender knew, how he is said to have acquired such knowledge, or what he ought to have known and why. Other passages of which he complained dealt with other matters. I need not set out any of these passages in detail. As the argument developed, it became clear that these were really points about fair notice rather than relevancy. In this context, Mr Cunningham referred me to the test of fair notice propounded by Lord Guthrie in Morrison's Associated Companies Ltd. v James Rome & Sons Ltd 1964 SC 160 at 190. I considered each of these points carefully, but I am satisfied in respect of each of them that fair notice is given in the pursuers' averments of these points, sufficient notice, in other words, to enable the actuaries fully to anticipate the case made against them and to attempt to meet it. I do not propose to say more about these matters.

 

(iii) Early Retirements (as a head of loss)

[17] Next, Mr Cunningham submitted that the claim against the actuaries for the loss resulting from the early retirements was irrelevant. The passage complained of is a passage in Article 25 to the following effect: had the actuaries given the advice which they ought to have given concerning contributions, and had the trustees followed such advice (as, in all the circumstances, they would have had to do, or at any rate would have done), the Scheme would have been wound up in April 2001, the losses caused to the fund would not have occurred; in particular, upon the Scheme being would up, no early retirements would have been permitted unless they were cost neutral, and the cost to the fund of the early retirements that were allowed would have been avoided. Mr Cunningham pointed out that since the case against the trustees in respect of early retirements had now been deleted, the pursuers no longer made any averments that the trustees should have withheld their consent to the early retirements; and he said that there were no averments that the trustees exercised their discretion on the question of early retirements unlawfully, whether in bad faith or merely unreasonably. It follows, so he said, that the actuaries too cannot be held liable for any loss arising from the (ex hypothesi lawful) grant of early retirement.

[18] It seems to me, and I think this became clear during the course of argument, that this rather misses the point. The fact that the trustees are no longer criticised for the decisions which they made in respect of early retirements does not mean that the decisions were correctly made, since the trustees could only be found to be liable if they acted with gross negligence or recklessness (to adopt and paraphrase the phraseology used in the pursuers' case). Still less does it mean that there cannot be legitimate criticism of the actuaries' advice upon which, it is said, they acted.

[19] In any event, the averments with which Mr Cunningham takes issue here are not the averments of breach of duty in respect of allowing early retirement, which form the subject of a separate head of claim, but are averments of loss flowing from the actuaries' alleged breach of duty in respect of contributions. As I have already mentioned, the claim in this respect flows from the contention that if the actuaries had given proper advice in respect of the contributions to the Scheme, that would have led to the Scheme being wound up in April 2001 and a number of things which happened after April 2001 - including the early retirements in April and May 2002 - would not have happened. The absence of any criticism of the trustees for allowing early retirements fortifies rather than undermines the causative link. On this basis, it does not matter whether any breach of duty is alleged against the actuaries in respect of the trustees' decision to allow early retirements since this is not what this part of the claim is concerned with.

 

(iv) Quantum: Early Retirements

[20] Mr Cunningham raised a further point about the early retirements claim. The pursuers quantify their claim under this head as follows (in Article 25):

"In relation to early retirement of the third, fourth and sixth defenders, the loss suffered by the Scheme is represented by the market cost of purchasing the early retirement pensions in May 2002 and the loss of income which would otherwise have been generated by investing the sum in Government Securities and Corporate Bonds. Assuming normal health for each of the third, fourth and sixth defenders, life expectancy in accordance with standard actuarial tables, interest at 5% per annum, and life office profit at 2% of the capital value of the annuities, the open market cost to the Scheme of the early retirement pension in May 2002 for the third defender was £1,006,000, for the fourth defender was £678,000 and for the sixth defender was £498,000. The total loss as at May 2002 was therefore £2,182,000. Had the said sum been invested, as it would have been, in Government Securities and Corporate Bonds, it would have grown to £2,444,000 by October 2002. That is the sum alternatively concluded for in conclusion 2(iii) hereof."

Mr Cunningham questioned whether it was appropriate to take the market value rather than look at what actually happened. Quantification on a notional basis such as that was irrelevant. But he went further. The effect of the early retirements was not in any way to diminish the assets of the Scheme, he argued. All it meant was that the claims of the third, fourth and sixth defenders were given preference. It might be that other beneficiaries of the Scheme lost out in consequence of those early retirements but this did not mean that the Scheme itself had suffered a loss. If the trustees are not criticised for the way in which they exercised their discretion - and, on the basis of cases such as Board of Management for Dundee General Hospitals v Bell's Trustees 1950 S.C. 406 and Edge v Pensions Ombudsman [2003] 3 W.L.R. 79, they could not be criticised - how could the actuaries be criticised in respect of their advice which led the trustees to exercise their discretion in the way they did? And how could any loss to the Scheme be said to flow from the exercise by the trustees of their discretion one way or the other?

[21] The fact that the trustees are not, and possibly could not be, criticised for the way in which they exercised their discretion so as to prefer (in the events which happened) the claims of some persons over those of others does not, so it seems to me, mean that those who gave the advice on the basis of which the discretion was exercised in a particular way cannot be held accountable for the advice that they gave. If a trustee acts upon professional advice he may well escape being held liable in negligence himself; but the very fact that he is likely, without being criticised, to act in reliance upon that advice means that those who give the advice are liable to be held accountable for it. Accordingly, on that issue, I see no reason not to allow the claim to go forward.

[22] On the question of taking the open market cost of purchasing an annuity as the measure of loss, Mr Clarke QC, who appeared for the pursuers, argued that whilst that might not be the only way of assessing the loss, it was one possible way and a reasonable one at that. It was for others to knock it down. I accept this submission. The pursuers' claim advances a possible way of estimating the loss. Whether it is an appropriate way, still less the best way, cannot be decided until all the evidence has been led.

[23] As to the argument about there having been no loss to the Scheme, it seems to me that this argument focuses too narrowly upon the overall assets of the Scheme and not sufficiently upon the way in which the Scheme is administered. It is clear from the authorities that a trustee may be liable in certain circumstances for preferring one beneficiary over another. In a sense, it may be said that the Scheme has lost nothing by such conduct; yet it has never, so far as I am aware, been held that that prevents the trustees being held accountable for their, ex hypothesi, wrongful administration of the trust; and I did not see why they should not in such circumstances be held to account by persons who come in as trustees after them. If that is right, then actuaries or other professional advisers giving advice to the trustees, upon the basis of which the trustees make decisions, cannot be in a better position. In truth, the present trustees of the Scheme sue to ensure the proper administration of the Scheme and are as much concerned with the fact that, for example, one beneficiary is improperly preferred to another as with any overall reduction in the assets of the Scheme. However, I do not need to reach any final decision on the point. It is better that a final decision be taken after all the facts have emerged at proof.

 

Disposal

[24] For the reasons that I have given I shall allow a proof before answer of the whole of that part of the pursuers' case.

 

THE CASE AGAINST THE REMAINING TRUSTEES.

[25] As I have already indicated, only the investments claim and the expenses claim remain live as against the remaining trustees. Both have undergone very substantial revision since the previous time the matter came before the court. At this hearing both the remaining trustees sought dismissal of both claims as directed against them. Mr Mackenzie, who appeared for the fifth defender, presented his submissions first. Those submissions were largely adopted by the fourth defender, Mr MacLennan, who also made some additional submissions.

 

The investment claim

[26] In paras.[15]-[19] of my Opinion of March 2007 I summarised the investment claim as it then stood. The pursuers' case at that time was that the trustees had failed to follow advice from as far back as August 2000; and that they ought, by April 2001 at latest, to have addressed the mismatch between equities and fixed investments by instituting a programme to begin switching £6m of equities to fixed investments. It was also averred that the trustees had received an updated Investment Strategy Report by Buck Investment Consultants Ltd. ("Buck") dated 5 April 2002 which had recommended a reduction in the percentage holding of equities to 34%; and that on 22 April 2002 they had met and agreed "in principle" to reduce the percentage holding of equities to that figure (from 80%); but that they took no action to implement this decision. The loss was calculated solely on the basis that the trustees should have made the switch from equities to fixed investments in three tranches of £2m each on 1 April, 1 July and 1 October 2001, £1m of each tranche being put into government stock and £1m into corporate bonds.

[27] I held that, subject to two matters, the pursuers ought to be allowed a proof before answer on this case: see paras.[100]-[103] of that Opinion. Those two matters were (a) the "temporal question", i.e. difficulties caused by the date (26 April 2002) upon which the third defender ceased to be a trustee and the fifth defender became a trustee; and (b) the basis of the calculation of loss. As to the latter, I said this:

"The basis of calculation of the loss, based upon the three dates on which the trustees allegedly should have switched from equities into fixed interest securities, are (sic) not foreshadowed by any factual averments, for example as to the advice that the trustees were given, which would justify the assessment of damages on this basis. The calculation appears to be totally arbitrary."

I concluded that the trustees were not given fair notice of how the claim on quantum was put against them.

[26] The claim has now been substantially reformulated. The averment (in Article 10) that by August 2000 the trustees (and others) knew that the percentage of investments held in equities represented a high investment risk remains, as do the averments (also in Article 10) about the 5 April 2002 Report and the trustees' meeting of 22 April 2002 at which the trustees met and agreed - the words "in principle" are deleted - to reduce the percentage in equities to 34% but took no action to do so. But the averments of loss have changed. Against the actuaries it is said that had they given the advice which they ought to have given, the Fund would have been wound up in April 2001 and, in consequence, the investments in equities would have been required to be put into bonds at that time. The case against the trustees is now a case, alternative to that made against the actuaries, centred upon their failure to implement the decision of 22 April 2002. It is no longer contended as against the trustees that the switch from equities should have been made in three tranches in April, July and October 2001, or indeed that anything should have been done by the trustees in 2001. The case now put forward is that the trustees should have made the recommended investment switch from equities (to which they had agreed at their meeting of 22 April 2002) by 31 May 2002. A comparison is then made, as at 13 November 2002 (when the Scheme was eventually wound up), between the value of the investment portfolio as it was comprised at that time and the value it would have had if the recommended switch had been made on 31 May 2002. The resulting figure is £1,992,621, the sum claimed in the new conclusion 2(i).

 

The expenses claim

[27] The expenses claim as it was then formulated is summarised at paras.[25]-[29] of my Opinion of March 2007. At paras.[111]-[113] I concluded that the pursuers had pled enough to justify the allowance of a proof before answer. Since then, the pleadings have undergone extensive revision though, as against the remaining trustees, the case remains essentially the same. The case put forward by the pursuers is that in deciding whether the expenses of administration of the Scheme should be met by the fund - and in taking a decision that, in so far as the company had borne such expenses in the first instance, the fund should repay those to the company by setting off against sums due by the company to the fund - the trustees failed properly to consider whether such expenses could be met by the fund without prejudicing the benefits to be provided under the Scheme. In so doing, they acted with gross negligence consisting of a reckless disregard for the consequences of their acts and omissions. It is averred that, in consequence, the Scheme suffered loss in the sum of £223,168, the amount refunded to the company. The expansion of the pursuers' pleadings during the amendment process has been largely responsive to the averments made by the various defenders in their answers. In light of the new pleadings, the remaining trustees, as they are entitled to do, seek to argue anew that the claim is irrelevant. They found particularly on the admissions now made by the pursuers on record.

 

Submissions for the defenders

[28] Mr Mackenzie, for the fifth defender, submitted that the investments case was irrelevant for three reasons. First, the pursuers had failed to aver why a one-off switch ought to have occurred by 31 May 2002, and had therefore failed to aver a sufficient factual basis for the alleged duty on the trustees to procure that a one-off switch occurred by that date. The investment claim was based on an alleged failure to follow advice contained in the April 2002 report, which advice was accepted at the meeting of 22 April 2002. But nowhere in their pleadings do the pursuers aver that the trustees were advised that the switch should be made immediately or by 31 May 2002. They do not aver that the April 2002 report contained any advice regarding the timing of the switch and, since the investment case is perilled on the terms of that report and the trustee's acceptance of it, that omission renders the investment case irrelevant.

[29] Secondly, Mr Mackenzie argued that the pursuers did not offer to satisfy the necessary test upon which discretionary decisions could be called into question. The courts would only interfere with the exercise by trustees of their discretion on grounds akin to illegality or irrationality. The pursuers did not offer to prove that the trustee's failure to make the switch by 31 May 2002 could be so categorised. He referred me to Edge v Pensions Ombudsman [2000] Ch 602 and in particular to passages at pp.618-9, 626-631 and 636. The court in Edge emphasised the similarity of that test with the well-known test for judicial review, though it stopped short of equating the two. He also referred to certain Scottish authorities, in particular Board of Management for the Dundee General Hospitals v Sharp 1952 SC (HL) 78 at 87-8, 90, 92 and 95, and Joy Manufacturing Holdings Ltd. Pension and Life Assurance Scheme Trustees, Petitioners (Inner House, 29 January 1999, reported on other issues at 2000 SLT 843) at pp.9-13. In the Dundee General Hospitals case, Lord Normand at pp.87-8 was not prepared to say that the analogy with the test for what we now call judicial review was misleading, though both he, Lord Morton (at p.90) and Lord Reid (p.92) appear to have thought that the burden on a person seeking to interfere with the exercise of a discretion by trustees might well be heavier. Gloag & Henderson, The Law of Scotland, 12th ed., at para.42.12, state that the exercise of discretionary powers by trustees could not be reviewed by the court unless the trustees had "considered the wrong question, did not apply their minds, perversely shut their eyes to facts, did not act honestly, or the decision was so irrational that no sensible trustees could have made it"; and see also Mackenzie Stuart, The Law of Trusts, at pp.250-1 and Wilson & Duncan, Trusts, Trustees and Executors, 2nd ed., at para.24-83. Having accepted at their meeting of 22 April 2002 that a switch from equities to fixed interest investments should be made, the trustees required to exercise their judgement (based on advice they received about the market) as to when and how the switch should be made. There was no doubt a range of options open to them. Although it was averred (at p.58C-D) that a man of ordinary prudence exercising the requisite degree of diligence (i.e. that degree of diligence which a man of ordinary prudence would exercise in the management of his own affairs) would have followed and implemented the advice in the April 2002 report and would have done so by 31 May 2002, nowhere do the pursuers aver that no body of trustees acting reasonably would have failed to implement a one-off switch by 31 May 2002, nor were there any averments of fact to support such a case. The case against the trustees involved an allegation of bad faith and such a case required to be carefully and precisely pled. He reminded me, under reference to para.[90] of my Opinion of March 2007 and the cases mentioned there, that the pursuers' averments in support of such a claim required to be cogent, clear and precise. This was particularly so in light of the admissions on record made by the pursuers to which I refer in the next paragraph.

[30] Third, Mr Mackenzie submitted that the pursuers' admissions contradicted and destroyed any such case. For example, between p.51B and 52B, the pursuers admit the following matters relating to the consideration which the trustees gave prior to the end of May 2002 to the question of switching investments: that (according to a report from Buck) at a meeting on 13 February 2002, EFM (who managed the fund for the trustees) advised them that they favoured equities over bonds for the following 12 months at least; that at that meeting on 13 February 2002 Mr Walbaum (the trustees' investment consultant) confirmed that Buck did not advise on timing but gave as his opinion that most commentators were suggesting that equities were likely to outperform bonds over the next 12 months, so that this might not be the right time to make a one-off switch from equities to bonds; that at the meeting of 13 February 2002 the trustees suggested delaying any switch until the equity market had risen to about 5600, a rise of about 10%; that no target date was set in the 5 April 2002 Report for implementation of the switch; that in the April 2002 Report advice was given, albeit that this was in the context of retiring members, that the trustees might prefer to take any additional disinvestments required from the sale of the equity portfolio and gradually reduce equity exposure over time; that, at the trustees' meeting of 22 April 2002, the trustees, having decided to implement the April 2002 Report, decided to adopt a passive management approach and to set up a meeting with Buck to advise on implementation; and that on 27 May 2002 the trustees confirmed the matching strategy (which, in this case, meant reducing the proportion of the investments held in equities). The pursuers also admit (on p.56) that Mr Walbaum, was not present at the trustees' meeting of 22 April 2002 and (on p.52) that the trustees were in contact with Mr Walbaum after May 2002; that on 13 June 2002 it was agreed between him (Mr Walbaum) and them that making the investment switch to achieve the appropriate mix "was an objective which was best achieved over a longer period of time"; and that as late as September 2002 in an

e-mail Mr Walbaum told the trustees that he looked forward to receiving instructions "in due course" regarding restructuring the investment portfolio "and again noted that Buck did not advise on timing". These admissions, he submitted, fatally undermined any case that the pursuers might wish to advance that no reasonable body of trustees acting with the requisite degree of care could have failed to effect the switch by 31 May 2002.

[31] On the expenses claim, Mr Mackenzie's argument for the remaining trustees is simple. The pursuers admit that historically the expenses had been repaid by the Scheme to the company; that the actuaries failed properly to advise the trustees on this matter (this being part of the case made against the actuaries); and that in reaching their decisions the trustees took advice and received approval from the actuaries. In light of those admissions, how can the trustees be said to have been negligent, let alone grossly negligent or reckless?

[32] There is a discrete point made by the fifth defender in relation to the expenses claim, namely that he became a trustee after the trustees had decided, on the basis of advice given by the actuaries, or at least to their knowledge, that in future the Scheme would pay such expenses. He submits that he cannot be held responsible for the actions of the trustees in implementation of a decision taken before he joined.

[33] Further, the trustees complained that they were given no fair notice of how the sum of £223,168 was made up. What payments were made, when and in respect of which expenses? Against what sums due from the company to the Scheme were the expenses set off? This was not just a fair notice point, where the relevant details would be clear in due course. It was an attack on the relevancy of the claim since unless such specification was given there was no factual basis for the allegation that the trustees were in breach of duty.

[34] The fourth defender, Mr MacLennan, adopted the submissions made by Mr Mackenzie. He made certain additional remarks by reference to the pursuers' case as pled against him. He noted that in Article 22 the pursuers aver that, in failing to make the switch of investments by 31 May 2002, he (and, from the time of his appointment, the fifth defender) "acted with gross negligence consisting of a reckless disregard for the consequences of their acts and omissions with regard to investment." However, he submitted, the allegations against him underpinning that averment were vague and wholly lacking in specification. It was very difficult to identify exactly what the pursuers say he did wrong or wrongly failed to do about the implementation of the decision taken by the trustees on 22 April 2002 to follow the recommendation in the April 2002 Report. A trustee is only liable for his own acts and omissions. The pursuers therefore require to aver the particular steps that he ought to have taken or ought not to have taken, and when and why and how it would have affected the outcome.

[35] Mr MacLennan pointed out that the pursuers plead (at p.48A-B) that after the meeting on 22 April 2002, the trustees took no action to implement the recommendation in the April 2002 Report; yet they admit, for example that the trustees set up a meeting with Buck to advise on implementation of the decision. It had to be borne in mind that he, as a trustee, might well have been open to an allegation of breach of duty if (assuming that he was able to do so) he had pushed through the implementation of the switch immediately after the meeting of 22 April 2002, without waiting to speak to Mr Walbaum, without waiting to see the benefits of passive management and without attempting to reduce EFM's fees for switching the investments. Further, the pursuers make no averments about what steps could or should have been taken to achieve the switch by 31 May 2002 even if the trustees had sought to implement their decision immediately after the 22 April meeting.

[36] Finally, Mr MacLennan advanced an argument in support of his plea of "all parties not called". The pursuers had been selective in only bringing some of the trustees before the court. This was, he said, impermissible.

 

Submissions for the pursuers

[37] In his response, Mr Clarke referred to a number of authorities of general application to the arguments before me. On the question of quantification of the investments claim, he cited Prudential Assurance Co. Ltd. v James Grant & Co (West) Ltd. 1982 SLT 423 to show that there might be many different ways in which a pursuer might legitimately seek to quantify his loss but it was not incumbent on him to enumerate them all in his pleadings. William S. Hood v George Mackay Fraser 1949 SC 24 was authority for the proposition that where all the relevant facts were known to the defender, there was a limit on what the pursuer could be expected to say. On the question of the liability of individual trustees, Mr Clarke cited Norrie and Scobie, Trusts, at p.146-7 for the proposition that, although each trustee was only liable for his own acts and intromissions, "trustees are assumed to act as a body, and this imposes a duty on each of them to oversee the actions of the others." This appeared also to be the position in England: see Parker and Mellows, The Modern Law of Trusts, 8th Ed. at p.776-8. That proposition was illustrated by cases such as Morrison v Miller (1827) 5 S 322, Clarke v Clarke's Trs 1925 SC 693, Sym v Charles (1830) 8 S 741, Home v Menzies (1845) 7 D 1010, Bahin v Hughes (1886) 31 Ch D 390 and Carruthers v Cairns (1890) 17 R 769. In Re Mulligan (deceased) [1998] 1 NZLR 481, a decision of the High Court of New Zealand, Panckhurst J discussed the separate responsibility of each trustee where there are co-trustees in a passage beginning at p.502. He explained that it was "elementary that a duty of diligence rests upon each trustee". That was illustrated, he said, by the law with regard to delegation and the approach to the issue of contribution between trustees. He concluded that "just as trustees must act together, they are liable together, for any breach of trust." Having cited with approval the remarks of Fry LJ in Bahin v Hughes, he went on in these terms:

"In my view, upon entering the office, each individual trustee has a separate responsibility to ensure that the terms of trust are carried out. It is not open for one trustee to defer to the wishes of another trustee in the absence of proper reasons for doing so."

In a number of passages in that case, Panckhurst J emphasised the need to determine questions of breach of trust once all the evidence had been heard. In response to the fourth defender's submission of "all parties not called", Mr Clarke cited Croskery v Gilmour's Trs (1890) 17 R 697 as authority for the proposition that a beneficiary suing in delict for breach of trust did not require to call more than one of the trustees as a defender to the action.

[38] Turning to consider the criticisms made of the averments relating to the investment claim against the trustees, Mr Clarke pointed out that Article 8, although largely directed against the first defenders, contained averments about the background of the company's financial difficulties which were relevant to the claim against the trustees. The averments in Article 10 drew attention to the mismatch of investments. It is averred that at the meeting of 22 April 2002 the trustees accepted the proposal in the Report of 5 April to reduce the percentage holding of the Scheme's investments in equities to 34% with 66% being invested in bonds. The words "in principle" have been deleted because they do not appear in the minute of the meeting. Although the fifth defender only became a trustee on 26 April 2002, after the meeting, he was present at the meeting in his capacity of director. He had also been present at meetings of the trustees on 13 February and 4 March 2002 at which the matching of the Fund's investments was discussed. Mr Clarke pointed out that the fifth defender admits on Record that he was appointed a director of the company in January 2002 and that his duties as director included those of Scheme Administrator. It was artificial to approach the matter simply on the basis that the fourth defender did not become a trustee until 26 April 2002. His knowledge acquired as a director and Scheme Administrator had to be taken into account, even though he could not have acted as a trustee until his appointment as such. The minutes of the meeting of 5 April also record that the trustees agreed to implement the recommendations in the 5 April Report and state: "Instructions to be given to Buck Consultants on implementation". Against that entry the fifth defender's initials, "BWM", appear, indicating that he took responsibility for passing on those instructions. In those circumstances the case against the fifth defender as trustee from 26 April was fit to go to proof. The cases showed that in such cases all the facts required to be investigated. The pursuers aver that a man of ordinary prudence exercising the degree of diligence appropriate to the management of his own affairs would have followed and implemented the advice in the 5 April 2002 Report and would have done so by 31 May 2002. Mr Clarke referred me to para.[100] of my March 2007 Opinion. The pursuers were not saying that the trustees should have second-guessed the advice of their professional advisers. On the contrary, they should have followed and implemented that advice. The pursuers offer to prove (in Article 22) that from 26 April 2002 it would have taken no longer than until 31 May 2002 for the investment switch to be implemented. The trustees gave instructions for the decision to be implemented. The fifth defender, initially qua director, was to give instructions to Buck investments. The pursuers do not criticise that method of implementing the decision. When the trustees left the meeting, they had done all that they were meant to do at that time. However, the instructions were not given to Buck Investments. The fifth defender became a trustee and, on becoming a trustee, was aware that instructions had not been given to Buck Investments. The other trustees were saddled with that knowledge and, more generally, were liable for the failure to follow up their instructions so as to ensure that the necessary instructions were given to Buck Investments. Trustees cannot simply abdicate responsibility. The pursuers were offering to prove that, despite their knowledge of what needed to be done, the trustees did nothing. On a fair reading, the case pled against the trustees was one of inaction. All the circumstances indicated the need to act promptly and with urgency. As to why the decision should have been implemented within the time frame averred by the pursuers, that was a matter for expert evidence. Mr Clarke said that he did not take issue with the principles upon which a trustee's actings could be criticised. The pursuers alleged gross negligence and irrationality. This was shown by reference to how a man of ordinary prudence would have acted. The basic averment was that the trustees should have acted as would a man of ordinary prudence. Expert evidence would flesh out how a man of ordinary prudence would have acted and why.

[39] Mr Clarke referred to the various admissions on record upon which Mr Mackenzie had relied. He submitted that, taken overall, they did not contradict the pursuers' pleaded case, certainly not to the extent of ruling out the possibility of success at proof. Some of the admissions, he submitted, concerned advice or suggestions in February 2002, some two months before the meeting of 22 April 2002, and therefore did not touch the pleaded case. Other admissions related to advice or decisions in May, June and September 2002 which were much too late to affect the question of whether the trustees acted in breach of trust in taking or not taking steps in late April and early to mid May 2002 to implement their decision. The advice was "not all in one direction". Further, certain admissions as to the advice given in the 5 April 2002 Report related to advice given in a different part of the report; it was dangerous to seek to draw inferences from such passages taken in isolation when the Report itself was not incorporated into the pleadings. All these matters would, of course, be relevant in the context of an investigation of all the facts surrounding the advice given to the trustees, the decisions they made and the action they took or failed to take to implement that decision. But it was not sufficient to enable the court to say that the case should not be remitted to proof.

[40] As to the expenses claim, Mr Clarke submitted that I had dealt with the criticisms of this claim in paras.[111]-[112] of my earlier Opinion and should adhere to my decision on this aspect. The admissions relied upon did not preclude the possibility of the trustees being held liable. Admissions, for example, that the trustees "discussed" matters with the actuaries, or that the trustees "sent" certain information to the actuaries, were either wholly neutral or very weak. So also the admission that the independent trustee (the first pursuer) was party to the approval of the Scheme accounts for the year ended 31 March 2003, which accounts disclosed the treatment of expenses now complained of. The points of specification referred to were now met by the pursuers in a spreadsheet. That point therefore fell away.


Discussion

[41] I approach the matter, as before, on the basis of the principles set out in Jamieson v Jamieson 1952 SC (HL) 44. The court will not dismiss a claim or exclude a part of a claim from probation unless it is satisfied that the pursuer must fail even if he proves all the facts which he offers to prove. In considering what the pursuer offers to prove and the possible ambit of evidence which might legitimately be led at proof, it is desirable to adopt a liberal approach and give the benefit of any doubt to the pursuer. Bare averments of fact on record seldom give the full flavour of the evidence which might be adduced; and the court will be anxious not to exclude a claim from probation unless it is satisfied that the claim cannot possibly succeed even on the most generous view of what might emerge from the evidence in support of those averments. There are many cases where the nuances of fact as they emerge from the evidence are vital to the identification of the duties that are owed and the fleshing out of criticisms levelled against the defender. The case of R v Mulligan (deceased) shows that this is particularly true in the case of claims against trustees, and I take those warnings on board.

[42] However, I also take on board that a trustee is not to be held liable for mere negligence. Mr Clark did not take issue with the line of authorities cited to me by Mr McKenzie to the effect that the Court would not interfere with decisions taken by trustees except on grounds of illegality or irrationality. Accordingly, I do not need to decide whether the test is precisely equivalent to that applicable in the case of judicial review, as some of the cases seem to suggest, or whether the threshold is somewhat higher. In the present case that does not arise, since the pursuers, in offering to prove that the trustees acted knowingly and wilfully in breach of trust and/or with gross negligence consisting of a reckless disregard for the consequences of their acts or omissions, have themselves set the bar at a height which falls within or even at the higher end of that judicial review test. Mr Clark does not seek to argue that he can succeed by showing anything less than that; and Mr McKenzie does not suggest that the trustees would escape liability if conduct of that character were established.

[43] It is not possible to apply the Jamieson v Jamieson test without identifying the ambit of the evidence which might be allowed at proof. The only evidence which might come out is that for which adequate notice is given on record. Nor is it sufficient on record simply to apply a label to the conduct of the trustees which is sought to be impugned. There must be averments of fact capable of justifying that label and which will allow evidence to be led sufficient to support the case against them. In the present case, as has already been noted, the pursuers label the trustees' conduct as grossly negligent and reckless in its disregard of the consequences of their acts or omissions. That formula is repeated with minor changes in respect of each of the claims against the trustees. But such a label does not in itself contain any averment of primary fact. It is simply a legal label which the pursuers seek to apply to the trustees' actings so as to justify their contention that the trustees are to be held accountable in law for what they did. For the claim to be relevant there must be averments of fact which provide a basis upon which evidence could be led sufficient to establish that gross negligence or recklessness. This is where, so it seems to me, the pursuers' case runs into trouble.

[44] The case as it is now pled against the trustees is that, having decided at their meeting of 22 April 2002 to accept the recommendations made in the 5 April Report, they ought to have implemented that decision promptly so as to achieve the switch in investments recommended by the Report 31 May 2002 at latest. What material is relied upon in support of this? I have considered the pleadings carefully but can find nothing. The pursuers make no averments, for example, to the effect that the trustees were advised in that Report that they ought to affect the switch of investments promptly or without delay. Indeed, the pursuers admit that the Report contained no target date for implementation of the switch. Nor are there any averments of fact, for example by reference to the movements in the stock market or by reference to advice circulating at the time, which would form the basis for an inference that the trustees ought to have been aware of the need to move fast after their meeting on 22 April 2002. In paragraph [100] of my Opinion of March 2007, I noted that the pursuers' case, as it then stood, was based upon a proposition that the trustees ought to have accepted the advice of their professional advisors. That was in the context of the trustees not having taken any action to affect a switch for a very long period after advice had been given on a number of occasions. As the case is now formulated, the position is very different. It is the pursuers' case that the trustees accepted the advice of their professional advisors contained in the 5 April 2002 Report. That had always been part of their case, but previously its only significance had been that it was a belated acceptance by the trustees of the need to switch investments, the complaint at that time being that they should have switched investments during 2001. In the present formulation of the claim, it is the trustees' acceptance of the advice of their professional advisors which forms the basis of the complaint that they failed to act so as to make that switch within the following five weeks. But there is no averment of any advice from professional advisors to the effect that they ought to have recognised the need to make the switch within that time. Accordingly, the case as now put forward is very different from that which I had to consider earlier. Put shortly, there is simply nothing to justify the inference that the trustees ought to have acted so as to make the switch by 31 May 2002, still less to support the inference that in failing to do so they were negligent, let alone grossly negligent or reckless.

[45] Mr Clark submits that the court should not form a view at this stage. The allegations of gross negligence and recklessness will be fleshed out in the expert reports and the court should hear the expert evidence before forming a view. I note, however, that no expert reports have been lodged as yet. This is not a case, therefore, of the pursuer seeking to supplement averments on record by reference to a report or other documents lodged in process. The submission comes to no more than saying: wait and see what comes out. I have already referred to the defect in that submission, namely that, unless there are relevant averments on record, evidence will not be admissible. I do not see how an expert could be allowed to say that the trustees ought to have known of the need for urgency because, for example, of their knowledge of the way the market was moving, or because there was some consensus of opinion amongst commentators of which they ought to have been aware, unless it was averred on record that they had such knowledge or that there was such consensus. Without being able to refer to any such material, the expert report would be of no value.

[46] In my opinion, therefore, the investment case made against the trustees is irrelevant. I have come to this view without regard to most of the admissions upon which Mr McKenzie relied in his submissions. However, those admissions fortify me in that conclusion. Put shortly, those admissions confirm that the trustees were told both before and after the 5 April 2002 Report that Buck did not advise on timing. This ties in with the admission that the April 2002 Report did not set any time for implementation of the switch. To my mind, these admissions make it clear that no inference can be drawn that the trustees ought to have realised that the switch should be made promptly. Further, there is an admission that the trustees decided to adopt a passive management approach, and set up a meeting with Buck to advise on implementation of the switch; and that the trustees were subsequently in contact with Mr Walbaum. This negates any inference that the trustees simply sat back and did nothing. If the pursuers want to make a case that what they did was inadequate, they should say so and say why. Further, it is admitted that both in February and as late as September there was at least a view amongst those involved in giving investment advice that equities were going to out-perform bonds for a period of 12 months or more. Against this background it requires, so it seems to me, specific averments to make it clear on what basis the trustees can be said to have adopted a course of action which no reasonable trustee could have adopted. This is, as I have indicated, putting the bar at its lowest. Specific averments would need to be made to show a case of gross negligence or recklessness. As I noted at para.[90] of my Opinion of March 2007, the averments against the trustees amount, in effect, to a charge of dishonesty: see Armitage v Nurse per Millet LJ at 251F. Any such plea, whether characterised as dishonesty or simply as gross negligence or recklessness, requires careful and precise averments of fact. Those are wholly lacking in the present case.

[47] In my opinion the expenses claim falls to be dismissed for similar reasons. It seems to me that the position is now different from that which obtained when I last had to consider this claim. The admissions made by the pursuers - and they are properly and responsibly made - make it difficult if not impossible for the pursuers to sustain a case that in deciding that the expenses should be repaid to the company the trustees acted with gross negligence or recklessness. Those admissions mean that if they are to succeed they will have to address the fact that, for example, the trustees discussed these matters with professional advisers. They put the onus on the pursuers to aver precisely why the trustees can be said to have acted "recklessly" by agreeing to the re-payment in such circumstances. In my opinion the pursuers have averred nothing to overcome the effect of these admissions. It seems to me that their pleaded case does not instruct a case of gross negligence or recklessness and must accordingly be refused probation.

[48] It is unnecessary in light of this to deal in any detail with certain ancillary points which were made. I shall simply indicate that I would have repelled Mr MacLennan's plea of all parties not called, for the reason given by Mr Clarke. I would have left the question of the individual liabilities of the trustees to be decided after proof.

 

DISPOSAL

[49] For the reasons set out in this Opinion, I propose to allow a proof before answer on the claims as directed against the first and second defenders but dismiss the remaining claims directed against the fourth and fifth defenders. Before pronouncing an interlocutor to that effect, I shall put the case out By Order for discussion of any other orders which may be required, including such order as may be necessary to dispose of the action in so far as directed against the third defender, and to deal with all questions of expenses.

 


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