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You are here: BAILII >> Databases >> Scottish Sheriff Court Decisions >> ISABELLA PRIMROSE SMITH LEIGHTON OR HARDIE v. CATHEL H MORRISON & JOHN H FERRIS [2011] ScotSC 154 (05 October 2011)
URL: http://www.bailii.org/scot/cases/ScotSC/2011/154.html
Cite as: [2011] ScotSC 154

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A917/00

SHERIFFDOM OF TAYSIDE CENTRAL & FIFE

AT KIRKCALDY

 

NOTE

BY

SHERIFF AG MCCULLOCH

 

In the cause

 

 

ISABELLA PRIMROSE SMITH LEIGHTON or HARDIE -v- CATHEL H MORRISON and JOHN H FERRIS

 

 

Kirkcaldy, 5 October 2011

Act: Francis Adv Alt: Bartos Adv

The Sheriff having resumed consideration of the cause, refuses parts 1 & 2, but grants part 3 of the defenders motions 7/6 and 7/7, and in terms thereof dismisses the action; continues the cause to 2 November 2011, at 2pm as a hearing on expenses.

 

(Signed) A G McCulloch

 

NOTE :

[1]   In this matter, the Initial Writ was warranted on 27 October 2000. After service, and the lodging of brief defences, the case was sisted at the instance of the first defender on 19 January 2001. The interlocutor records that the purpose of the sist was "for further investigation and negotiations". So far as this Court is concerned, the next event is the lodging by the Pursuer of her motion 7/3 on 16 May 2011. This motion, which was opposed, called on 1 June. It sought, in broad terms, to recall the sist, restore the cause to the adjustment roll, to allow certain adjustments to be received, and for Summary Decree in terms of Rule 17.2, in the sum of 10000, "against the Defenders, which failing the first defender severally plus interest at 8% a year from 10 July 1993".

[2]   When the matter called on 1 June, the Pursuer's Counsel moved the motion. I heard a brief outline of the summary decree motion. Solicitors appeared for the defenders. Mr Grieve, for the first defender advised that he had no file, and had no previous involvement with the case. The first he had known of the matter was the arrival of the motion, whereupon he made investigations, to discover that his client had moved from the address on record. He sought a continuation, of at least 6 weeks to obtain instructions, and information, as well as the old file. He hinted at an argument that might be presented under Article 6.1.

[3]   Mr Macaulay appeared for the second defender, and had the advantage of having been involved with the matter in 2000. He also sought a continuation. He pointed out that the Pursuer's adjustments were late, the adjustment period having expired on 17 January 2001, prior to the sist. He also made reference to another case (A918/00) which had been raised by the pursuer at the same time, against differently constituted defenders, but in respect of the same subject matter. That case was also sisted. Notice was given to the court that in due course the defenders would argue that the pursuer should not be allowed to continue with her action, given dilatory progress to date, an apparent breach of article 6, and in any event the court's inherent power to grant absolvitor due to inordinate and inexcusable delay. The matter was continued to 13 July 2011.

[4]   When the matter resumed the defenders were also represented by Counsel. In the meantime, the pursuer had lodged further motions 7/4 & 7/5. The first was a revised summary decree motion, to be read as additional to the first such motion, and the second an amendment of the crave relative to interest. Her counsel intimated that these were not being moved now, and they should be continued to another day, as adjustments had been received from the defenders, together with motions (7/6 & 7/7) seeking absolvitor, which failing, dismissal. It was agreed that these adjustments should be received, as the earlier adjustments for the pursuer had also been received; that the defenders would move their motions, and that the case would be continued again for the pursuer to respond, both to the motions and to the adjustments. A full day would be required in due course to deal with the matter.

[5]   The defenders' counsel advised that there were various defences to the summary decree motions, which would be advanced in due course, if necessary. The adjustments and Rule 22 notices in respect of the defenders preliminary pleas should be noted. In the meantime, he was moving his motions to have the action concluded, either by absolvitor, or dismissal. I was immediately referred to the cases of Tonner v Reiach & Hall, 2008 SC 1, and Hepburn v Royal Alexandra Hospital NHS Trust 2011 SC 20. In Tonner, the case had been sisted for 17 years, and the court referred to the "inordinate and inexcusable" delay (para 132). There had to be an element of unfairness, specific to the facts (para 136) for the court to intervene. This theme, of unfairness was further considered and developed in Hepburn (para 32), to the extent that the delay must result in a fair trial being no longer possible. Accordingly, to apply these tests to the current case it was necessary to consider its facts.

[6]   In the Writ, lodged 27 October 2000, the pursuer seeks payment of capital due to her deceased husband, as a former partner in the firm of Anderson & Menzies, Accountants, Kirkcaldy ("the firm"). A contractual obligation had been entered into between the pursuer and the firm, whose partners at the time were the defenders. This had been an oral agreement, but reduced into a Minute (production 5/2) dated 7 May 1993. The late Mr Hardie had resigned as a partner in 1989. He was entitled to repayment of his capital account in the firm. However, there was concern about a claim against the firm, which might have been uninsured, meaning a potential liability. An agreement was entered into. By December 1993, the balance due had fallen to 70000. An account was to be opened, but for reasons unknown, that did not happen. 10000 was placed in the client account of the firm. The defenders than assumed Mr Black as a partner, then Ms Convey and Ms Blackburn. The defenders retired in 1995. Mr Black dealt with the outstanding claim, writing to the pursuer on 10 January 1996 (6/5). Eventually, at some point in 1998, the claim appeared to have been resolved, although the exact basis of settlement, and what contribution from whom, remains unclear to the defenders. Against this background the present action was raised in October 2000. Skeletal defences were lodged, there was some minor adjustment, then the motion of the first defender to sist. The agents for the second defender agreed not to oppose a recall if moved by the pursuer (5/21). But the pursuer did nothing until May 2011. No explanation or excuse is offered.

[7]   The matter is further complicated by the raising by the pursuer of another action, which is also sisted (A918/00). This was raised against the successor partners (Black, Convey & Blackburn) for the same money. They had taken over the business from the defenders in this action, and had assumed its assets and liabilities. The defenders in this action were also later convened as defenders in that action, but no primary case has been pled against them in it. It was sisted in May 2004, and remains so. It appears to be the case that negotiations continued between the Pursuer and Black. However, his agents withdrew in about early 2004. Convey and Blackburn have had no contact with Black since then. The second defender's agents have tried to trace Black, without success. He is no longer a member of the Institute of Chartered Accountants of Scotland. He is believed to be in France. He clearly is an important witness, as he was dealing with the uninsured claim and with the Pursuer regarding the capital repayment. He is best placed, as a partner from 1994, to assist the court. Further, the firm now has two further partners who are not called in any action. As matters stand, the defenders do not believe that they can address Art 8 of condescendence, regarding the settlement of the claim. At the time of settlement, they were no longer partners in the firm.

[8]   It is important to consider the terms of the apparent agreement between the Pursuer and the Defenders, as partners of the firm. It is contained in a 2 page "Minute of Meeting" between the pursuer, as executrix of the late DW Hardie, and advisors, with Mr Morrison and Mr Ferris. It does not say when the meeting took place, but it is signed by Mr Morrison who adds the words "the above terms agreed to by CH Morrison on 2 April 1993" before his signature. It is not signed by Mr Ferris, but it is signed by the pursuer. The following paragraphs are relevant:

"4. Following upon the balance of Capital being reduced to 70000 a deposit account will be opened in Trust in the joint names of Mrs Hardie....and Mr Morrison and that monthly payments of 1500 will continue to be made into that account until the potential claim....has been resolved. It is further agreed that interest accruing on the deposit account will be available to Mrs Hardie........Capital, however, may only be withdrawn of the signature of the joint names and this arrangement will subsist until it is clear that there is no claim to be made against the firm at which time the balance may be drawn by Mrs Hardie.

5. It is further agreed that the appropriate account be opened with RBS Kirkcaldy, ..... or any other Bank.... as may be mutually agreed.

8. On the resolution of the final claim position subject to legal assurances being obtained and Messrs Gibson & Spears, Dow & Son being satisfied thereon it is proposed that through a combination of monthly payments and lump sums the balance of the late DW Hardie's capital will be repaid by November 1995, or such earlier date as may be mutually agreed."

It can be seen that the final payment is subject to a condition precedent, namely resolution of the claim, "legal assurances" being obtained, and the pursuer's agents being satisfied thereon.

[9]   The defenders argued that there would be significant prejudice to them, as there was a risk that they would not have a fair trial in respect of the claim against them. They were also prejudiced in relation to any right of relief that they might have against other former or current partners of the firm. Given the raising by the pursuer of the other action, against other partners, this difficulty was significant. In their defences the defenders in the second action deny any liability rests with them. There had been a "substantial and inordinate delay", and a real risk of no fair trial. It was submitted that the tests set out in Tonner and Hepburn had been met, and therefore the court could intervene to prevent the action proceeding further. Further and in any event, the passage of time since the discussions in 1993, and the alleged settlement of the claim in 1998 was significant as well as prejudicial. Memories were bound to be duller, justifying a common law remedy of dismissal. A plea of mora goes to the merits of the case, so would apply to any future action that might need to be taken, such as a third party notice by the defenders.

[10]           The motion was also advanced in terms of the Human Rights Act 1998. If the court allows the case to continue, it would do so incompatibly with Article 6.1 of the European Convention of Human Rights (ECHR). Reference was made to Anderson v UK [2010] ECHR 145, at para 28, which is in the following terms:- "Moreover, the Court finds that there were periods of inactivity for which no satisfactory explanation has been given by the Government. The Court is particularly struck by the fact that the first appeal was before the Inner House from 22 September 1998 until 15 March 2001 and there was little or no activity between late 1998 and autumn 1999. It may well have been that, as the Government submitted, the parties were involved in other proceedings and settlement discussions. However, the Court finds that these considerations were not sufficient to absolve the Inner House of its own obligation to take an active role in the management of proceedings and to make enquiries of the parties to ascertain their position in respect of the appeal. As the Court has frequently stated, the State remains responsible for the efficiency of its system; the manner in which it provides for mechanisms to comply with the reasonable time requirement - whether by automatic time-limits and directions or some other method - is for it to decide. If a State allows proceedings to continue beyond the "reasonable time" prescribed by Article 6 of the Convention without doing anything to advance them, it will be responsible for the resultant delay (Bhandari v. the United Kingdom, no. 42341/04, 22, 2 October 2007, together with further references therein). Additionally, for the time the interlocutory appeal was pending before the Inner House, the Court does not find that any significant period of delay can be attributed to the applicant or that the expedition of the proceedings was his responsibility at this stage; the interlocutory appeal had been taken by the first defenders when the applicant's motion for disclosure - which they opposed but for which they failed to appear in person - had been granted by the Outer House. It was suggested that this court ought to have recognised a lengthy period of inactivity, and put the case out By Order, or require the clerk to contact parties to seek progress. If there had been no breach until now, any future acts by the court would have to be compliant with Article 6.1. The remedy was to be found in the 1998 Act. Section 6(1) is in the following terms " It is unlawful for a public authority to act in a way which is incompatible with a Convention right." A court is a public authority by virtue of section 6(3)(a). Section 7(1) provides that " A person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by section 6(1) may- (b) rely on the Convention right or rights concerned in any legal proceedings, but only if he is (or would be) a victim of the unlawful act." Finally, section 8 (1) provides that the court "may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate." Accordingly, the court has a discretion in how it deals with an apparent breach of a Convention right. This discretion was considered in the Attorney General's Reference (no 2 of 2001) [2004] 2 AC 72. At para 67 Lord Hope said: "The point which I wish to emphasise is that the Human Rights Act 1998 itself confers a discretion on the court as to the choice of remedy in the event of a violation of a Convention right. How that discretion is to be exercised is a matter which must be determined in the first instance under the domestic system (or systems) of each contracting state. There is nothing in either the Strasbourg jurisprudence or what we can learn from other jurisdictions outside Europe where there is a reasonable time guarantee that constrains us in finding a solution which is best suited to our own circumstances. If we fall short of what is required to provide just satisfaction, the victim will be entitled to seek his remedy under article 41 in Strasbourg."

[11]           Counsel for the defenders argued that the appropriate remedy would be absolvitor, as the defenders have suffered a prejudice which affects not merely this case, but also their potential right of relief against other partners. It is a prejudice based on the absence of Black, whose evidence is critical in this case and in the claim for relief. Even if relief could be found against some of the other partners, Black had disappeared so relief against him was unlikely to be enforced. It was unclear how relief might be enforced against the others. Further, the plea of all parties not called was brought into focus by the delay. The pursuer had chosen to sue these defenders in this action, but also to sue all five partners in the other action. She sought decrees against all jointly and severally. But by not calling the other three in this action, where summary decree had suddenly been sought after ten years of inactivity, the pursuer was placing the burden on the defenders for convening the others, by means of third party notice, which is more burdensome now that it was ten years ago.

[12]           As a fall back, if the court was not to grant absolvitor, the defenders sought dismissal, and failing that, the court was asked to make an order to remedy the difficulty. Thus the court could order the pursuers to produce whatever evidence they had on the issue of settlement of the claim, or the whereabouts of Black, or the assumption of liabilities by the succeeding partners. Or indeed, to expedite the procedure, order a proof or debate, and make findings of expenses. Section 8(1) was in very broad terms.

[13]           When the case called again on 5 September, the defenders' Counsel elaborated on his earlier submissions with particular regard to prejudice. It was necessary to consider prejudice, given that Section 8(1) referred to such remedy as was "just and appropriate". The defenders had been contacted. The first defender is 68, and only had vague recollection of the events leading up to the Minute of April 1993. The second defender, aged 73, was unable to recall any such meeting as is mentioned in the Minute (5/2). Attempts to uncover the partnership documentation had been unsuccessful. The documents left by the defenders with Black, Convey and Blackburn had been lost or at any rate were untraced, due to the passage of time. The solicitors previously acting for Convey and Blackburn in the second action had advised by letter of 22 June 2011 (6/6) that their clients were unable to assist with any papers or information. Indeed they had noted that that action was to proceed to a Debate, against Black only, on 12 May 2004, but before the debate took place, the case was sisted, and Black's agents withdrew. If the matter was to proceed there would require to be consideration of the phrase "legal assurances" found in the Minute. Were such assurances ever obtained? This would require evidence, which appears no longer to exist, or perhaps exists in dulled memories, which memories would surely have been sharper in say 2002 when this matter ought to have been at proof. There was clear prejudice to the defenders, brought about by the inactivity of the pursuer, and her maintenance of the sist.

[14]           A further line of argument surrounded the claim for interest. The pursuer was seeking 9% compound, which was significantly higher than any commercial or judicial rate. There was doubt whether the court could mitigate the interest by reducing the rate, see Newman Shopfitters Ltd v MJ Gleeson Group plc 2003 SLT (Sh Ct) 83, referring to Boots v GA Estates 1993 SLT 136.

[15]           In summary, the defenders position was that any liability they had to the pursuer had been assumed by the new partners (Black, Convey and Blackburn), and it was notable that the pursuer also sought to recover from them (the new partners) on the basis that they did assume liability, in action A918/00. That case has been sisted since 2004. To establish the assumption of liability by these three, the court would need to hear evidence of how they became partners, to see if they assumed the liabilities of the old firm. It would appear that the pursuer had engaged with them on the basis they had assumed liability. Thus, in the present action, there would require to be a proof, with detailed averments, of the detailed facts and basis upon which they became partners. But as is evidenced by the agent's letter (6/6) there are significant obstacles to establishing the facts. The best evidence has disappeared; Black who was handling the claim, and negotiations with the pursuer, has disappeared; and the defenders own recollections are at best hazy. The defenders have been exposed to the possibility of each meeting one half of the whole claim, rather than a one fifth share, given the difficulties inherent in now trying to proceed with a third party notice. Even if that notice was allowed, and liability established, the chances of enforcement against Black were remote, resulting in each defender paying one quarter. When viewed together, all of this was significant prejudice. The question for the court therefore is whether in the light of this prejudice the case should go any further. It is just and appropriate for absolvitor, or dismissal, to be granted. Clearly, if the case does not proceed, the pursuer's claim is lost against these defenders (in this process). But why exactly has she lost it? The answer is inexplicable delay, either by her failing to instruct her advisors to proceed, or by a failure of those advisors. It is difficult to see how she might have been advised to do nothing. Whether to grant absolvitor or dismissal is very much a matter for the court. The common law position contemplates dismissal, unless there are circumstances so material as to amount to mora. Given the loss of documents, the disappearance of Black, and the dulled memories there should be no purpose in a fresh action with the defence of mora. Matters can be concluded now, by absolvitor, rather than wait for a fresh action, with further inherent delays.

[16]           Finally, I was referred to Rule 15.7, which was introduced on 1 October 2009. It is as follows:-.(1) Any party to an action may, while that action is depending before the court, apply by written motion for the court to dismiss the action due to inordinate and inexcusable delay by another party or another party's agent in progressing the action, resulting in unfairness.

(2) A motion under paragraph (1) shall-

(a) include a statement of the grounds on which it is proposed that the motion should be allowed; and

(b) be lodged in accordance with rule 15.1.

(3) A notice of opposition to the motion in Form G9 shall include a statement of the grounds of opposition to the motion.

(4) In determining an application made under this rule, the court may dismiss the action if it appears to the court that-

(a) there has been an inordinate and inexcusable delay on the part of any party or any party's agent in progressing the action; and

(b) such delay results in unfairness specific to the factual circumstances, including the procedural circumstances, of that action.

(5) In determining whether or not to dismiss an action under paragraph (4), the court shall take account of the procedural consequences, both for the parties and for the work of the court, of allowing the action to proceed.

 

[17]           It can be seen that the Rule contemplates dismissal, and requires there to be "inordinate and inexcusable delay"... "resulting in unfairness"..........and the court must be mindful of the procedural consequences for parties and the court when reaching a decision on whether to dismiss or not. The present case is about events following upon a retiral from a partnership in 1989, an agreement apparently reached in 1993, a claim on the partnership apparently resolving in 1998, an action raised in 2000, then sisted in 2001, a parallel action raised, then sisted in 2004, and a motion for summary decree lodged in May 2011. The summary decree motion, partially argued, should not be an influence on the decision relative to the defenders' motions. The defenders have now stated a defence. If the action is to proceed a proof will be necessary, although there may first require to be a debate. The pleadings are not finalised, following much late adjustment by both parties. It is not the typical case of summary decree based upon skeletal defences. There are complex issues of law and fact which would otherwise require the court's resolution. If the court was unwilling to grant absolvitor, then dismissal in terms of rule 15.7 would be appropriate. Its tests were made out.

[18]           In response, the Pursuer's counsel intimated that Mr Black had been traced, in France, living on modest means, and had contacted the pursuer's agents by e-mail. No doubt the defenders could now seek to precognose him. He had confirmed that the partnership papers had indeed been destroyed, by Ms Convey, after Black had been forced out. But this had happened before the action had been raised, and therefore was not the result of any delay by the pursuer. Counsel continued his theme that the defenders had suffered, or will suffer, no prejudice as a result of any delays in the action. He would not concede that there had been an inordinate delay, but offered no argument against that proposition. Nor did he suggest that there was any excuse for the delay. His opposition to the defenders motions was based on there being no unfairness, or prejudice to them, which had been the result of the delay.

[19]           In expanding this theme, counsel argued that the whole merits of the case could be readily understood by considering the documentation lodged. As the defenders were focussed on the problem of "legal assurances", one could look at material from the first defender to see just what these were meant to be. The summary decree motion was based on there being an acknowledgment that there was a balance due to the pursuer, subject to a condition. A letter from the first defender dated 29 June 1994 made reference to a "balance due" (5/3). The minute (5/2) referred to the balance being reduced to 70000. Why had the defenders not paid? Because of the outstanding claim. He conceded that the defenders may be correct to refer to a "condition precedent". Clause 8 of the Minute governed the position, and it can be proved on the evidence. A letter dated 2 March 1993 (5/3/10) from the first defender to the pursuer's agents referred to "legal assurance". The letter, in discussing how the position of payment of capital might be finalised states:- "With regard to resolving the final capital position, subject to receiving legal assurance that no claim can materialise, which I would seek, in say November 1994, from Dundas & Wilson and would expect yourselves to be satisfied on, I would propose to complete resolution through a combination of monthly payments and lump sum by November 1995". That the claim was resolved was not in doubt, according to the pursuer, when considering subsequent correspondence. A letter from her agents to the first defender's agent dated 22 June 1999 (5/3/1) implies resolution. Accordingly, there could be no doubt as to what was meant by "legal assurance" at least insofar as the first defender was concerned, and that the claim had been resolved. Thus Clause 8 is clear, and no unfairness, prejudice or difficulty exists in proving its meaning.

[20]           The absence of partnership documentation was not an unfairness to be taken account of either. These had been destroyed by Ms Convey some time before the action raised. So their loss had not come about during the period of sist, and if it was prejudicial to the defenders, that had not been caused by the delay. As for as the possibility of dimmed memories was concerned, surely enough could be recalled to rebut, if necessary, section 17 of the Partnership Act 1890, whereby the retiring partner does not cease to be liable for obligations incurred before retirement, and new partners are not liable to creditors for anything done before assumption. The pursuer was not privy to any arrangements as between the various partners of the firm, nor could she be. These defenders can deal with the other partners as they think fit, indeed they could have invoked the third party procedure during the original adjustment period in 2001, before the sist. Such matters are nothing to do with the pursuer. A final suggestion was that even if there is any prejudice to the defenders, they have earned it. It was their sist; they could have convened the other partners in 2001; they could have progressed the action; they have held money due to the pursuer for many years longer than they were entitled to. Thus there is no unfairness, even if there might have been prejudice.

[21]           The court must have regard to the terms of Rule 15.7, particularly para 4(b). It is not legitimate to look at questions of third party procedure, given the helpful exposition of partnership debts found in Sim v Howat 2011 WL 2582711. In para 33, Lord Hodge sets out the relationships involved, where a creditor is owed by a partnership, but a new partnership is then created. He concludes that the creditor can sue either, or both. That is exactly what the pursuer has done here. The Rule allows for dismissal only, and even then, there is a stringent test to be met. The defenders seek absolvitor, a far more draconian measure. The test in the Rule, of "unfairness specific to the factual circumstances" is quite different to the concept of mora. That requires a demonstration of delay, acquiescence and taciturnity. These are not obviously present here. Thus a proof would be required to support a plea of mora. Thus if the court was to intervene by stopping this case, absolvitor was not appropriate, and the sanction should be dismissal. But there was another possibility, a more appropriate remedy, and that was acceleration, as envisaged by Lord Hope in the Attorney General Reference (2 0f 2001) case, at para 90. When considering Article 6, it was important to remember that the right was "not a right not to be tried outwith a reasonable time". In referring to the dictum of Lord Millett in Dyer v Watson [2004] AC 379, he, "having observed that the European Court has repeatedly held that unreasonable delay does not render the trial or sentence liable to be set aside, said that the question was whether this was a matter of right because there is no Convention right not to be tried at all, or (as Lord Hope agreed) was a matter simply of remedy." It also had to be recognised that dismissing the action might actually delay matters further.

 

[22]           The general rule, that it is for a pursuer to progress an action can be distinguished in this case. By letter dated 10 January 2001 (5/2/10) the pursuer's agents sought an assurance from the second defender's agents that they would not oppose a recall of the sist. Given the terms of a letter between the same agents of 11 January 2001 (5/2/11) it would appear that such an assurance was given.. The case was then sisted by the second defender, for "further investigation and negotiations". There has been no such negotiation by or on behalf of the second defender. Thus there is a departure from the normal rule that it is for a pursuer to make progress. Responsibility for the situation can be viewed as shared between pursuer and second defender. In now opposing the pursuer's motion to recall the sist and grant summary decree, he has breached his undertaking. As Gloag on Contract points out at p296, "a man must not derogate from his own grant." The second defender agreed not to oppose the recall of the sist at any time. It thus cannot be open to him to come to court, oppose the recall of the sist, and seek to have the case struck out. This argument could not be advanced against the first defender, it was conceded.

[23]           Counsel sought to develop further his assertion of no prejudice by considering the documents, beyond those already referred to. This was partly in support of his summary decree motions, but also went to the merits of the case. If the matter could be resolved now, where was the prejudice? A letter from the second defender dated 13 February 1999 (5/3/14) made reference to the "excess not covered by the insurance settlement". Other documents showed that parties had discussed, then paid, their contributions to the excess. Thus there is no need to have evidence from Black, and there is sufficient material for summary decree. The defenders would then appear to be left with two strands of argument. First, they are entitled to an enquiry on the plea of mora, taciturnity and acquiescence. Secondly, they have difficulty working out third party remedies. The latter does not involve the pursuer; the former is unnecessary, given Rule 15.7.

[24]           It was also incumbent on the defenders to consider what remedies they might have against other partners. They could have made pre-emptive action, as they did not have to wait for payment being made by them to the pursuer, See Gloag & Irvine, Rights on Security, p800-2, and Cunningham v Montgomerie1879 6R 1333, per Lord Deas at p 1339. For this and other reasons already discussed, the defenders are either not prejudiced at all, or are the authors of their own misfortune.

[25]           It is clear, submitted the pursuer's counsel, that prejudice is not the same as unfairness. In Hepburn, at para 32, the Lord President said, when considering the test to be applied in these cases:- "In Tonner the court (at para [136]) adopted for the purposes of its second criterion (the first being "inordinate and inexcusable delay") an approach which had been suggested by Reid and Blackie (Personal Bar at para 3.07), namely, that there be "an added element of unfairness ... specific to the particular factual context". It considered, but appears to have rejected, certain formulations mentioned in Birkett v James (see paras [134]-[135]). I have some doubt about the usefulness in this context of the Reid and Blackie approach - which was formulated not in the present context but in that of the common law test for mora. If, as appears to be the case, the reference to "specific to the particular factual context" is a recognition that contexts may vary and may require to be dealt with differently, I have no difficulty. But "an added element of unfairness" requires some explanation. It is not, in my view, any unfairness which will suffice. The dismissal of an action for want of prosecution, particularly where - as will commonly occur - any period of limitation or prescription has expired, is a draconian step. The unfairness in question must, in my view, be such that a "fair trial" is no longer possible - or at least that there is a substantial risk that it is no longer possible. Although that formulation may itself involve some imprecision, it is consistent with, and should reflect, the obligation on the court to ensure that a party has, in terms of Article 6 of the European Convention, a fair trial in the determination of his rights and obligations. That the denial of a fair trial is the overarching consideration appears to be recognised by the Extra Division in Tonner itself (see paras [61] and [101]; see also Moore v Scottish Daily Record, per Lord Justice Clerk Gill at para [13]. The defenders therefore need to show that there is a substantial risk that a fair trial is no longer possible. As to the added plea of mora, regard has to be had to the dicta of Lord President (Kinross) in Assets Co Ltd v Bain 1904 6F 705:- " I do not doubt that where coupled with lapse of time, there have been actings or conduct fitted to mislead, or to alter the position of the other party to the worse, the plea of mora may be sustained. But in order to lead to such a plea having effect, there must, in my judgement, have been excessive or unreasonable delay in asserting a known right coupled with a material alteration of the circumstances, to the detriment of the other party." The defenders had no averments to support this, merely a plea in law. The absence of relevant averments in a case where mora was pled, was considered by the Court in Somerville v Scottish Ministers 2007 SC 140, where at para 94, the court confirmed that :-"... we would emphasise that prejudice or reliance are not necessary elements of the plea. At most, they feature as circumstances from which acquiescence may be inferred. By its nature, acquiescence is almost always to be inferred from the whole circumstances, which must therefore be the subject of averment to support the plea. In none of the three cases in which the plea has been tabled have the Scottish Ministers made any averment of acquiescence, let alone of circumstances from which it might be inferred. Without such averments, there is no relevant basis for the plea, and the Lord Ordinary was bound to repel it." I was urged to refuse the defenders' motions, and to grant the summary decrees sought.

[26]           The defenders counsel, in reply, sought only to deal with his motions, suggesting that the summary decrees could be more fully addressed at a later date, in the event that he was unsuccessful in bringing the action to a conclusion. As this seemed a practical solution to a rapidly lengthening hearing, I agreed. I was urged to consider Rule 15.7 again, but with reference to the phrase "including procedural circumstances". This seems to have been lifted straight from the decision in Tonner, where at paras 137 -138 the court said:- The relevant factual context will include the procedural context. Much may depend, in the particular case, on the stage that the action had reached before the delay occurred. At one end of the scale, there is the situation illustrated by the present case where an action has been raised in order to defeat prescription and no further procedure has taken place. If the action is allowed to proceed, extensive procedure may be necessary before the action can reach the stage of final disposal. At the other extreme, extensive procedure may have taken place leaving very little further to be done to resolve the case.[138] Further, in our opinion, account should be taken of the procedural consequences of allowing the action to proceed, not only for the parties, but also for the work of the Court (see paragraph [121] above). In the present case, the case had been raised, then sisted after the end of the adjustment period. If it is to go ahead, the defenders will have to bring in three new defenders. Black may well have responded by email, but no address was forthcoming. Tracing him would not have been necessary if the case had proceeded normally. He is an essential witness, being actively involved in resolution of the claim. Indeed the documents produced did not go as far as the pursuer asserted, and it remained to be proved that the condition precedent had been satisfied. The proper issues had not been focussed when the action commenced, but would now require attention. The second defender was not objecting to the recall of the sist, indeed it was accepted that he could not. His opposition was to the summary decree element of the pursuer's motion 7/2. It was clear from Tonner, at para 128, that the obligation for progress fell squarely upon the pursuer. Matters had been further complicated by the pursuer choosing to raise two actions. She could have sued all partners in one action, avoiding the necessity of the defenders in this case invoking third party procedure, if the matter is to continue.

[27]           As to disposal, I was advised that if the case was not stopped now, there would be a lengthy procedure of third party notice, followed by a long and complicated proof, where one defender was abroad, another had cancer, and the two present defenders had little recollection of events, having left the firm 16 years ago. The court should not have to deal with it, and the defenders should not have to prepare for it. Rule 15.7 allowed dismissal, but Tonner (para 144,145) was proposition that at common law, absolvitor was a proper remedy, and the only sure way of ending the matter. It was only open to the defenders if they had a plea of mora, now added, and averments to support it. These were now present in adjusted Answer 10, sufficient to support mora. Thus the motions for each defender, 7/6 and 7/7 should be granted.

Discussion.

[28]           I heard from counsel at length, over three days. However the matter can be considered in short compass. That there has been delay is obvious. There has been no excuse or explanation put forward for it by the pursuer. On any view, a delay of over 10 years is inordinate, even in our civil courts. In Anderson v UK, the European Court of Human Rights was critical of the public authorities for a period on inactivity of little over two years. I consider that it is appropriate to take Rule 15.7 as a starting point, as our court procedures are governed by the rules. Any common law measures can be considered thereafter. Paragraph (4)(a) is clearly made out. There has been an inordinate and inexcusable delay on the part of the pursuer, or her agents in progressing the matter. What of (4)(b)? Has the delay resulted in unfairness specific to the factual circumstances, including the procedural circumstances? In my opinion, it has. The case cannot be decided on papers alone, and certainly not on those already referred to. That requires too many assumptions. It cannot be said with certainty, for example, that the claim against the firm has resolved, or that the legal assurance required has been given, or that if given, it is to the satisfaction of the pursuer's agents. Nor, having regard to the terms of the first summary decree motion (7/3), is it clear why no deposit account was ever opened, or if it was, what happened to it, or whether an alternative was found, either unilaterally or by agreement. Such matters, essential to the pursuer's case, do require further investigation, and in all probability, a proof. That being the case, there is clearly a requirement for consideration to be given by the defenders to third party procedure. This is a fact which the court can have regard to, standing the wording of Rule 15.7. There are procedural consequences for the parties, should the case proceed. Indeed there may also be consequences for the pursuer, and her advisors, should the case not proceed, but these are not the sort of consequences with which Rule 15.7 is concerned. I also have regard to the second action raised by the pursuer, which is currently brought against five defenders, and has been sisted since 2004. The court ought not to have to consider the issues between the parties twice. It therefore seems to me that all the requirements envisaged in Rule 15.7, save unfairness, are clearly present. The granting or refusal of the dismissal motions therefore turns on whether there is unfairness to the defenders, resulting from the delay.

[29]           What is "unfairness"? In Rule 15.7, it must be unfairness specific to the factual circumstances, including procedural circumstances, of the action. As the Lord President said in Hepburn, at para 33:- "It is not, in my view, any unfairness which will suffice. The dismissal of an action for want of prosecution, particularly where - as will commonly occur - any period of limitation or prescription has expired, is a draconian step. The unfairness must in my view be such that a 'fair trial' is no longer possible, or at least that there is a substantial risk that it is no longer possible. Although that formulation may itself involve some imprecision, it is consistent with, and should reflect, the obligation on the court to ensure that a party has, in terms of Art 6 of the European Convention, a fair trial in the determination of his rights and obligations." It would appear to me, that in this case at least, it cannot be said with certainty that a fair trial is no longer possible. That involves speculation. However, the alternative proposition, namely of a substantial risk that a fair trial is no longer possible is another matter. That enables the court to form a view, from the factors submitted as relevant, on the risks, and to measure the extent to which they might amount to being substantial. In the instant case, the factors put forward are (i) the dimming of memories; (ii) the procedural difficulties inherent in now embarking upon third party procedure; (iii) the problems of enforcement and relief if liability attaches; (iv) the absence of exact knowledge of Black's whereabouts; (v) the illness of Convey; (vi) the destruction of the partnership paperwork; and (vii) the complicating existence of the second action. The pursuer says that the matter can, to a great extent, be dealt with on the productions: thus memories are not required, or will be refreshed by those documents. Further, regarding the second and third factors, the defenders could and should have taken earlier action. The third party notice could have been served before the sist, and pre-emptive action taken against the other partners. Black will now be traced relatively easily, and whilst the details of Ms Convey's illness were not discussed, presumably a commission could be held to recover her evidence. The paperwork went missing before the sist, so that is not a factor that arises directly from any delay. Finally, the other action is a red herring. The pursuer can, and has, sue either or both of the old and new firms, according to the dicta of Lord Hodge in Sim V Howat.

[30]           I am of the view that whilst some of the arguments put forward by the pursuer have some limited force, the position in which the defenders now find themselves is one of such prejudice and difficulty, amounting to unfairness, to the extent that this action can go no further. It is clear that the unfairness arises from the delay, with the possible exception of the loss of the partnership papers. But even that is a factor, because it means that those who might, in say 2002, have recalled what was in the documents, or what had been agreed between partners, are now unlikely so to recall, given the passage of time, and are not aided by possible reference to the missing documents. The procedural consequences are significant, and fraught with difficulty. A third party notice, were one to be lodged now, will require to be served on at least three potential defenders, with the exact whereabouts of one unclear, other than "in France". His previous known agents withdrew, in the other action, in about 2004. The inevitable further delay in progressing the action will be significant. Even now, without that procedure, a proof diet, or debate, would not be heard until well in to 2012. With the third party procedure, and the probably requirement for debate, before any proof is heard, the matter could well last until 2013. For the court then to be examining witnesses on the construction of a minute of a meeting twenty years previous, is inappropriate, not only for the court itself, but also for the witnesses. The pursuer's arguments that the defender should have acted sooner can be met with the response that the responsibility for progressing the action was entirely that of the pursuer, and her advisors. She could at any time have sought to recall the sist, particularly given the assurance of no opposition from the second defender. However, I consider that there must come a time, or a situation, that an assurance of the nature given, is capable of being withdrawn. Such a situation would be the present one, where opposition was marked to the pursuer's motion 7/3, without qualification. Form G9, unfortunately, does not require grounds of opposition to a motion to be stated. Such a requirement would, in my opinion, be of great value not only to the court, but also to practicioners. Indeed, many motions themselves do not contain a statement of reasons, despite Form G6 requiring "details of motion, and where appropriate, the reasons for seeking the order," again a matter of regret. Exceptions can occasionally be found in the Rules, notably Rule 15.7, which does require an opponent to state grounds of opposition. In this case, the defenders' motions 7/6 and 7/7 were lodged the day before the continued hearing of 7/3. It was agreed that they be moved, with the pursuer's opposition to be stated on another day. Thus there in no formal G9 in respect of these motions. However, it was clear from the first calling of the motion 7/3, that the defenders were intent on arguing dismissal, rather than opposing the recall of the sist, and the summary decree motion. In any event, the undertaking by the second defender did not bind the first.

[31]           I do not consider that Sim v Howat assists this matter greatly. In that action, the pursuer sought a declarator of an existence of an agreement, and payment. Unlike the present action, the defenders in that case remain as partners in a firm. There are no procedural consequences, such as third party notices, to complicate the matter, and that case was resolved only after the parties had entered into a joint minute of admissions, had lodged affidavits, and against that agreed background, had accepted that a debate would determine the questions between them. There is no such unity of purpose here. Further, the defenders in the present action were not partners after 1995, retiring from the firm at a time when the claim was still outstanding. They are unable, or perhaps unwilling, to agree exactly what happened to the claim. The prospect of affidavits, or joint minutes of agreement so long after the event is remote.

[32]           Having decided that the requirements of Rule 15.7(4)(a) & (b) have been made out, I am then required by 15.7(5) to take account of the procedural consequences, both for the parties and for the work of the court, in allowing the action to proceed. To an extent, I have already done this when considering the procedural circumstances referred to in 15.7(4)(b). The action is at a very early stage of procedural life. It was raised presumably to avoid prescription, and the defences lodged were brief. The adjustment that took place was limited. Although the adjustment period had ended, the motion to sist was lodged during its currency. It is safe to conclude that adjustment was not over by the time of the sist. Indeed all parties have made substantial alteration to their pleadings over the last few weeks, since the case resurfaced. The pursuer has also amended her claim for interest. The consequences for allowing the case to proceed are significant, both for the court, and the parties, particularly the defenders. I am satisfied that there are no positive reasons for insisting that the case be allowed to proceed. Accordingly, I am entitled to grant the motions 7/6 & 7/7, to the extent of dismissing the action.

[33]           These motions, however, seek absolvitor, with dismissal only as an alternative. The first argument, in para 1 of the motions, is advanced on the court's inherent power to regulate matters before it, following Tonner. In that case the court considered whether the Lord Ordinary had been correct to dismiss, rather than assoilzie. It noted the absence of a plea of mora, and supporting averments. It commented at paras 144-5:- "It is certainly true, as the reclaimers urged upon us, that a decree of absolvitor is the only sure way of bringing litigation to an end once and for all. Since, ex hypothesi, the action has been raised within the prescriptive period and the running of prescription has been interrupted by the raising of the action, a decree of dismissal will leave it open to the pursuer to raise a fresh action. While we accept the inconvenience of that result, we do not think the Court can ignore the fact that decree of absolvitor is a decree on the merits. Such a decree would be appropriate if, as we think is possible, a defender were to enter a plea, with appropriate supporting averments, of personal bar by mora, taciturnity and acquiescence. Short of that, we are satisfied that the only form of decree open to the Court is dismissal." In this case, there is a plea of mora, and averments, added recently by adjustment. But such a plea would normally require an inquiry. I do not consider we are at the stage of process where absolvitor is justified, given the finality of such a decree. Mora is more than delay, however long that delay might be. For the plea to succeed, it must be accompanied by taciturnity and acquiescence. But these matters are properly for debate, or preliminary proof, rather than the motion roll. The plea must be supported by the relevant averments to support it, and also from the pursuer to seek to rebut it. We are not at that stage in this case. Parties are still adjusting, and although an Options Hearing had been assigned (by the court on 1 June 2011) it had subsequently been discharged. The record has not been closed. Seeking absolvitor now would go beyond the normal approach to be adopted where mora is pled. I do not consider that absolvitor can be sought now, in terms of the motions, where a plea of mora would not be considered as anything other than premature. The motions 7/6 & 7/7, at part 1, make reference to three factors in support. The first is the inordinate and inexcusable delay on the part of the Pursuer in progressing the cause subsequent to the sist in 2001. I accept that this applies. The second is the serious prejudice to the defenders which such delay has caused. I accept that the defenders have been prejudiced by the delay. The third factor is the substantial risk to a fair consideration of the issues of fact in the cause which the delay has caused. Again I accept this factor. The question for me, however, is whether the presence of these factors requires the court to grant absolvitor. For the reasons above, I do not consider that they do. It remains a matter of discretion, particularly at the stage in the proceedings currently reached.

[34]           As an alternative to the common law power to grant absolvitor, the defenders seek in para 2 of their motions absolvitor in respect that the court is prohibited from acting in a way which would be incompatible with the defenders' Convention Rights. It is argued that the allowance of further procedure in this case would be a breach of the Article 6(1) right for a fair and public hearing within a reasonable time. I am not satisfied that this is either made out or an appropriate remedy. It has been held that there is no right not be be tried (or have a civil proof) outwith a reasonable time (see e.g Attorney Generals Ref 2 of 2001), and the proper question is one of the appropriate remedy. That might be acceleration of the process, or orders for production of evidence, or damages ( as eg Anderson v UK). I do not consider that a court should dispose of the merits of an action (the effect of absolvitor) because the court is concerned that it, by its own decision, might be breaching a party's Convention Right. If it does so breach, then a remedy may be available elsewhere. The existence of the Convention Right is merely another factor to be taken into account when deciding the matter. Accordingly, I am not prepared to grant decree of absolvitor, on either parts 1 or2 of the motions. Further, having decided that decree of dismissal can be granted, under Rule 15.7, it is unnecessary to consider how, if at all, the court may seek to expedite the matter, to avoid further delay.

[35]           The motions seek expenses. I was not addressed on this and have therefore continued the case for a hearing on expenses. Given my decision, there is no requirement to hear further from either party on the pursuer's motions for summary decree.

 

 

 

 

 

 


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