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Remedies, Contract and Delict Neil Beynon, Advocate 1. Introduction

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Remedies, Contract and Delict Neil Beynon, Advocate 1. Introduction Remedies, Contract and Delict Neil Beynon, Advocate 1. Introduction 1.1. The above title might, on first reading, appear to be much too broad. 1.2. The aim, however, is to offer some suggestions for when our profession returns to practising in a way that enables the legal system to function properly and fully so as to enable the rule of law to flourish. 1.3. There is citation of cases in which I have been instructed and where the judgements can be accessed on the SCTS website. One of the cases cited, McKenzie, infra, was the subject of excellent coverage in the Dundee Courier which contained a precis of the facts and the judgement illustrated by a location map and a photograph depicting the significant scale of the relevant accident and ensuing damage (24.10.2018 – Dave Finlay). The article shows that first rate court reporting directly after judgement has not been lost from the print media in Scotland. The cases have a theme – asserting property rights (in the widest sense) by way of a damages claim, interdict or other court order and defending such claims. 2.1. Contract interpretation 2.2.1. It is, I suggest, generally accepted that the case of Arnold v Britton [2015 AC] 1619 restored much needed reasonable certainty and clarity to the process of judicial interpretation of contracts. This approach has been adopted in Scotland by the Inner House with perhaps the best example being Hill v Stewart Milne Group Ltd [2016] CSIH 35. The chronology is important. The construction or interpretation of commercial contracts proceeded on the basis of clear settled principles illustrated by Professor Gloag’s textbook (2nd edition) at pages 373-374 and Lord President Dunedin’s often cited dictum in Muirhead & Turnbull v Dickson (1905) 7R 686 at 694, “Commercial contracts cannot be Remedies, Contract and Delict Neil Beynon, Advocate | June 2020 | Page 1 of 6 arranged by what people think in the inmost minds. Commercial contracts are made according to what people say”. That dictum attaches primary importance to the language adopted or agreed upon by the parties. In carrying out the construction exercise, the Courts here and south of the border had regard to the contract’s surrounding circumstances at the time of its conclusion and falling within the actual knowledge of the parties where such an exercise was needed. The English case of Prenn v Simmonds [1971] 1 WLR (HL) 1381 at 1385 was followed, for example, in the Outer House case of British Coal Corporation v SSEB 1991 SLT 302 at 310L. In that case, the Court required to take into account evidence from the parties’ former directors and senior managers concerning rather historic but implemented documents relative to the sale of coal by the Pursuers to the Defenders. This settled approach was the subject, in my opinion, of a radical departure by the House of Lords in a series of cases commencing with Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 where the approach of Lord Hoffman in that and other cases attracted both support and reservation or even disquiet. In Investors Compensation had Hoffman observed that background knowledge “includes absolutely anything which would have effected the way in which the language of the document would have been understood by a reasonable man”. This dictum, and its focus on a “matrix of fact” had these consequences: (1) prolongation of commercial litigation; with significant expenses/consequences?; (2) courts focussing not on applying the ordinary meaning of the agreed upon language but actually or coming to chase to rewriting contracts on the basis of perceived commercial realities. Point 2 was well articulated by Sheriff Principal D J Risk in Partnership of Ocean Quest v Finnie Ltd 2000 SLT (Sh Ct) 157 and 161 who adopted the Hoffman method but with obvious reservation. 2.1.2. Britton saw a return to the conventional approach even though the unsuccessful parties (Lessees) clearly had the real sympathy of the Supreme Court but no more than that. By 4 to 1, with Lord Neuberger giving the leading judgement and with whom Lord Hodge agreed but with his own reasoning, the ratio is clearly one that requires the specific agreed upon language to be given its ordinary meaning as this would be read by a reasonable man. In a Scottish context Lord Hodge’s analysis (especially at paragraph [77]) is useful. 2.1.3. What has this meant in practice? Perhaps this is best illustrated by an example of court construing and applying a provision. In McKenzie and Others v (1) Asda Group Ltd and DHL Services Ltd [2018] CSOH 102, after finding that the two commercial drivers employed by the Defenders caused the accident founded upon due to their joint and several fault and negligence the Lord Ordinary, Lord Woolman went on to make these findings: Remedies, Contract and Delict Neil Beynon, Advocate | June 2020 | Page 2 of 6 “Quantum [19] As I mentioned above, quantum is agreed in the joint minute. It states: ’28. In the event that the first and second defender, or either of them, is found liable to make reparation to the pursuers, quantum of damages is agreed to the date of proof in the following sums: i. £75,000 to the first pursuer; ii. £20,000 to the second pursuer; and iii. £5000 to the third pursuer.’ [20] [Counsel for the second Defenders] argues that I should strike out the claims for the second and third pursuers on the basis that they represent pure economic loss. I construe paragraph 28, however, as precluding that argument. A joint minute is a contract. The form of words chosen by the parties here does not admit of qualification. Once the condition is met, payment must follow (my emphasis). [21] But in any event, the claim by the second and third pursuers relates to outlays and costs incurred by them as persons then occupying Blue Cedars and does not represent pure economic loss. Conclusion [22] At this stage I shall make an award of damages and expenses in favour of the pursuers, in accordance with the figures set out in the joint minute.” This case is the one featured in the Courier article. 2.1.4. So, it can be seen that contractual construction has returned to what is state in McBryde on The Law of Contract in Scotland (3rd edition) at 8.08 as summarised above. 2.2. Damages for alleged exercise of undue influence and facility and circumvention 2.2.1. The conventional view has been that where a contract, including a disposition has been procured by undue influence and/or facility and circumvention, the correct remedy is to seek reduction which now can be sought in the Sheriff Court (section 38(2)(g) of the Courts Reform (Scotland) Act 2014). The basis for this was the absence of authority to the contrary: see McBryde, supra at 16.11 and 16.36. Remedies, Contract and Delict Neil Beynon, Advocate | June 2020 | Page 3 of 6 2.2.2 In Anderson and Anr v Wilson [2018] CSOH and [2019] CSIH 4, two of five adult daughters alleged that their late father had been subjected to undue influence and facility and circumvention by the defender husband of one of their siblings resulting in a disposition of most of the agricultural land on an estate at alleged gross undervalue. The Disposition did not include the mansion house. The Defender’s position, in fact, was that since the granting of the disposition, he had made substantial improvements to the land giving rise to a obvious defence to a claim for reduction. The Pursuers sought damages representing the difference between what they would have been bequeathed on the death of their father had there been no disposition and what they would actually receive on the winding p of the father’s estate. The Commercial Judge, Lord Bannatyne, held that damages were not a competent remedy (paras. [14] and [122]). In the Inner House, the opinion of the First Division being delivered by Lord Menzies, the competency issue was addressed in these terms on an obiter basis because the claim failed for reasons including prescription and no title to sue. “[42] We agree with the commercial judge’s conclusion that the pursuers have made sufficiently relevant averments of facility and circumvention and of undue influence. On the basis of these averments we would have been inclined to allow the pursuers’ claims for damages to proceed to proof, were it not for our decision on the other issue.” Essentially, the Inner House agreed with the apparent in the South African civil code. Nonetheless, the Inner House’s position provides a reasonable basis for seeking damages in a future case reliant on the above grounds of fault. There was an “esto” conclusion for reduction for obvious reasons. 3.1. Delict; vicarious liability 3.1.1. On 2.3.2016, the UK Supreme Court issued 2 complimentary judgements in this area; in Cox v Ministry of Justice, the department was held liable vicariously for the negligence of a prisoner working on a paid basis in a prison kitchen who injured a catering manager; in Mohamud v WM Morrison Supermarkets plc, the defenders were found liable for the unprovoked and intentional assault by an employed petrol station worker on a visitor to the station. These cases are found at [2016] UKSC 10 and 11. 3.1.2. The reasoning in both cases was followed and applied in Armes v Nottinghamshire County Council [2017] UKSC 60 were a local authority was held to be liable vicariously for sexual/physical assaults by foster parents on children under the supervision of the authority and the day to day care of the remunerated but not employed foster carers who were selected by that authority.
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