Scottish Court of Session Decisions

LORD M'DONALD'S OPINION.—This is an action in which the pursuer, a dentist, claims damages from the defender, a Writer to the Signet, for personal injuries sustained in a shooting incident in the Bahamas on 24th October, 1972.

The defender accepted that on the merits the pursuer's averments were sufficiently relevant to justify proof before answer. For the purposes of the argument it was not in dispute that the alleged assault on the pursuer by the defender was an actionable delict according to both the law of Scotland and the law of the Bahamas. The argument was confined to the relevancy of the pursuer's averments relating to some aspects of his claim for damages.

After certain amendments by the pursuer at the close of the debate the sum now sued for is £335,493—a surprisingly large amount for an action of this type in the Scottish Courts. The amendments have effectively met certain subsidiary but none the less powerful arguments presented on behalf of the defender, and I do not tarry to consider these further. The real question is whether the law of Scotland, as lex fori, or the law of the Bahamas, as lex loci delicti, falls to be applied to certain items of damage claimed. The defender's contention is that no head of damage is recoverable before a Scottish Court unless it is one which could be recovered both under Bahamian as well as Scots law. Alternatively no head of damage is recoverable in Scotland unless it is one recognised by Scots law. The pursuer's contention is that heads of damage, including questions of remoteness, fall to be ascertained by Bahamian law as lex loci delicti. He accepts that matters concerning the quantification of damages are for the lex fori.

The items of damage under consideration relate to financial loss and to outlays. There is now a positive averment by the pursuer that under the law of the Bahamas he would be entitled to recover damages in respect of these matters. I propose in the first instance to consider each item and decide whether it is recoverable according to the law of Scotland.

The first item of financial loss is loss of profits sustained by a company called Jason Investments (Bahamas) Ltd. of which it is said that the pursuer was president and executive director. There are averments that the company owed its existence and profitability almost entirely to the efforts of the pursuer and that his absence from business following his injuries had deprived the company of his skilled services and management resulting in loss of profit. It is said that the pursuer was entitled to 38 per cent of the profits of the company in each financial year and that prior to October 1972 his share of profits averaged £20,000 per annum. Three year's loss is claimed, bringing out a total of £60,000.

In my opinion the company's loss of profits is not a loss recoverable by the pursuer according to the law of Scotland. I agree with the decisions in Young v. Ormiston 1936 S.L.T. 79 and Gibson and others v. Glasgow Corporation 1963 S.L.T. (Notes) 16. In both these cases the principle in the case of Reavis v. Clan Line Steamers 1925 SC 725 was, by analogy, applied and I consider that it is also applicable to the present claim. The English case of Lee v. Sheard [1956] 1 Q.B. 192 which appears to suggest that a claim of this nature might be recoverable according to the law of England does not, in my opinion, accord with the law of Scotland. The reference by Denning L.J. to the English action per quod servitium amisit emphasises the distinction between the two systems of law in this connection.

The second item of financial loss proceeds on the averments that following upon a virtual cessation of the company's business due to the pursuer's enforced absence the value of the pursuer's shareholding which in October 1972 was £162,393 is now nil. The precise figure of £162,393 is claimed in respect of this item.

The third item of financial loss claimed is for £8000 being an operating loss sustained by the company over a period of 8 months at a rate of £1000 per month. This proceeds on a narrative that the pursuer maintained out of his own pocket an office and staff for the company during this period.

In my opinion neither of these items of financial loss is recoverable according to the law of Scotland. I reach this conclusion for the same reasons as these stated above in connection with loss of profits. No separate argument was presented to me on this aspect of the case.

The other items of claim which are challenged fall under the general heading of outlays. The first, quantified at £1790, is described as "Family living and miscellaneous expenses." They relate to the cost of maintaining the pursuer's two brothers and other persons when they visited him in the Bahamas while he was seriously ill, which cost the pursuer said he "required" to pay. The second outlay claimed is in respect of telephone calls incurred by the pursuer's brother which it is said the pursuer required to pay. It is also said that the pursuer required to make additional telephone calls to the United Kingdom from hospital. The third outlay is for loss of income sustained by the pursuer's brothers while in the Bahamas and away from their businesses. It is said that the pursuer required to refund to them such loss of income, which amounted to £3941.98. The fourth item of outlay represents the cost of return air fares from Scotland to the Bahamas for his brothers and other persons which the pursuer again stated he required to pay. These amount to £1003.90.

In my opinion these four items of outlay are not relevantly pleaded according to the law of Scotland. A criticism common to all four is that there is no specification as to the basis upon which the alleged obligation to pay these outlays was incurred by the pursuer. It is not averred in respect of any item that these outlays were incurred following upon a legal obligation arising ex contractu or otherwise. According to the law of Scotland the cost of assistance given gratuitously without an undertaking or understanding to pay does not form a recoverable item of damage from the wrongdoer (Edgar v. Lord Advocate 1965 S.C. 67). This is a matter on which the laws of Scotland and England are not identical (per Lord President in Edgar at p. 72). I do not therefore place reliance on the English case of Schneider v. Eisovitch [1960] 2 Q.B. but in any event I do not think that all three conditions desiderated in that case by Paull J. have been relevantly averred in this case. In particular it is not said that the expenses would have been incurred anyway if the pursuer's relatives and others had not come to his aid nor is it said that the pursuer undertook to pay these expenses to them. With one minor exception the losses claimed are losses incurred by persons other than the pursuer and there are no relevant averments as to why the pursuer required to incur them. In the claim for telephone expenses the pursuer in a single sentence states that he required to make telephone calls from hospital. This was no doubt an expense incurred by him but his pleadings are silent as to what their nature was and why he had to make them. For that reason I do not consider this item, notwithstanding that it is said to be incurred personally, to have been relevantly averred according to the law of Scotland.

I therefore hold the averments relating to the items of damage under discussion are irrelevant in Scots law. They are said, however, to be recoverable according to the lex loci delicti and the question is whether this means that they can be recovered in the lex fori. Parties were agreed that before the lex fori could entertain the action the conduct in question must amount to an actionable delict both in the lex fori and in the lex loci delicti. This was referred to in the debate as "the double delict rule." It has emerged from a series of cases including the following:—Rosses v. Sir Bhagrat Sinjie (1891) 19 R 31; Evans v. Stein (1904) 7 F 65;Naftalin v. LMS 1933 SC 259; and M'Elroy v. M'Allister 1949 SC 110. There is some suggestion in certain of the speeches in the House of Lords in Boys v. Chaplin [1971] A.C. 356 that the rule may be subject to exception but that matter does not arise in the present case. Parties are agreed that the double delict rule applies and indeed that it has been fulfilled in the present case.

The pursuer maintains that the double delict rule having been satisfied all matters of substantive law, including heads of damage and remoteness of damage, are exclusively for the lex loci delicti. Thereafter he maintains that procedural matters, including the measure of damages are determined solely by the lex fori. These propositions are based on analysis of the cases of Naftalin and M'Elroy supra; D'Almeida v. Becker [1953] 2 Q.B. 329, and Mackinnon v. Iberia Shipping Co. 1955 S.C. 20 as these have been interpreted by certain academic writers.

The defender founds upon the same cases as interpreted by another academic writer for the proposition that the pursuer can recover from the Court of the forum only those heads of damage which he could recover both under the lex fori and the lex loci delicti. He also founds upon certain observations in Boys v. Chaplin .

In considering these cases I am of opinion that it is necessary to guard against reading into any one more than it actually decided. In Naftalin it was held that a father could not recover damages in Scotland for solatium for the death of his son in an accident in England because solatium which is a substantive right is not recognised by the law of England. Thus the pursuer's claim, valid according to the lex fori, was limited or cut down because it was not recognised by the lex loci delicti. The case did not decide that a claim not recognised by the lex fori was none the less recoverable there because it was valid according to the lex loci delicti. It is true that in general terms some of the judges state that the rights of parties are to be regulated by the lex loci delicti, but the Court did not have to decide what the position would have been had that law provided a right not recognised by the lex fori.

M'Elroy v. M'Allister affirmed Naftalin but did not extend it. It stated the double delict rule with clarity. The result was again to cut down a claim which otherwise might have existed in the lex fori because it was irrecoverable by the lex loci delicti. Again the Court did not require to decide the converse situation. I note with interest that Lord Justice-Clerk Thomson expressly reserved his opinion as to whether the forum would assess damages in accordance with the lex fori or whether the pursuer should aver and prove the character and scope of the rights conferred by the lex loci delicti on the basis of which the lex fori would ultimately assess damages. I also note that Lord President Cooper defined the Naftalin principle in a negative manner viz. that the Scottish Courts will not recognise in a pursuer any specific jus actionis denied him by the lex loci delicti. He did not say that these Courts would recognise a jus actionis otherwise denied by them because it was recognised by the lex loci delicti. His Lordship also sounded a warning against what in a subsequent case has been called "forum shopping" and emphasised the lack of certainty which would result if the ground and extent of a defender's liability were to vary with the forum at the will of the pursuer.

MacKinnon v. Iberian Shipping Co. bore to follow Naftalin and M'Elroy but again did not extend them save in so far as it may appear to equiparate a claim to solatium for the death of a relative to one for pain and suffering due to personal injuries. This is not of significance in the present case.

D'Almeida was a case in which the plaintiffs sought to recover damages for breach of contract. It was held by Pilcher J. that the question of whether they were entitled to recover depended upon whether the damage was or was not too remote and that this question fell to be determined in accordance with the proper law of the contract which was Portuguese law. This case goes no further than decide the question of remoteness in a breach of contract case and I do not take more from it than that. At the same time I acknowledge that certain academic writers have concluded that the same principle applies to cases of tort. In particular Cheshire on Private International Law 9 Edition at p. 702 states:—

"It should logically follow from the D'Almeida case that remoteness of damage in tort is a matter of substance to be governed by the lex causae. To rule otherwise would permit a plaintiff to exact compensation for what was no ground of liability under that law."

The decision in Boys v. Chaplin was that the law of England as lex fori fell to be applied to the assessment of damages arising out of a delict in Malta committed by one British serviceman stationed there upon another. I do not find it easy to extract a principle from this case since the grounds of decision, although all leading to the same conclusion, vary between the judges. The case of Machado v. Fontes [1897] 2 QB 231, which introduced some doubt into the effect of the double delict rule, and which was queried by Lord Justice-Clerk Thomson in M'Elroy, was finally over-ruled. On the question of assessment of damages Lord Upjohn in the Court of Appeal and Lords Donovan and Pearson in the House of Lords seem to favour the lex fori on the basis that it is proper that a court which is seized with jurisdiction should award its own remedies. Lord Guest held that solatium for personal injuries, unlike solatium for the death of a relative, was not a head of damage but merely an element in quantification of total compensation and so for the lex fori. In what I respectfully consider to be a significant passage Lord Wilberforce said that the provisions of the lex delicti, denying or limiting or qualifying recovery of damages for certain reasons should be given effect to. Again it is not said that the provisions of that law granting or extending damages otherwise irrecoverable according to the lex fori shall be given effect to. I also note that Lord Hodson, approving the comments of Lord President Cooper in M'Elroy, states that it is in the interests of public policy to discourage "forumshopping."

While the comments of current academic writers are of persuasive effect only, it is interesting to note the conclusions they have drawn from these cases. In his work on Delict at page 61, Professor Walker states that the lex loci delicti determined whether certain heads of claim fall to be ignored as being consequences which are too remote. This statement is not vouched. In a subsequent work entitled International Private Law the same author at page 164 reiterates that questions of remoteness of damage fall to be determined by the lex loci delicti. He cites Naftalin and M'Elroy for this proposition. In a later work entitled Civil Remedies the same attitude is adopted but embracing a detailed criticism of the various rationes of their Lordships in the House of Lords in Boys case.

On the other hand in his work on Private International Law at page 249, Professor Anton, after referring to the work of Cheshire and the case of D'Almeida, concludes that since the rules relating to remoteness indicate what sort of loss arising from a delict is actionable, they must be referred to the law giving actionability. In the present state of Scots law this, he says, would imply a reference not to the proper law of delict or to the lex loci delictialone, as Cheshire and Walker suggest, but to the lex fori and the lex loci delicti. For this conclusion he relies on Naftalin and M'Elroy.

I derive little assistance from the academic writers on this topic, but have referred to them since their views were extensively canvassed in debate. If I had to choose between them I would prefer those of Professor Anton as being more logical and leading to a more practical result.

My own analysis of the cases leads me to the conclusion that the question is still an open one. No case was cited to me in which a Scottish court had awarded damages for a delict committed abroad which could not have been awarded according to Scots law, and I understood counsel to be agreed that they could find no such case. It is, of course, beyond doubt that the Scottish courts will refuse or limit an award which it would otherwise grant because it is not recognised by the lex loci delicti. In my opinion this is the proposition which falls to be extracted from Naftalin and M'Elroy and no more. I find support for this from the express reservation of opinion by Lord Justice-Clerk Thomson and the negative approach of Lord President Cooper in M'Elroyalready referred to. I also consider it to be consistent with the wording used by Lord Wilberforce in Boys v. Chaplin to which I have already made reference.

What law therefore falls to be applied to a head of damages recognised by the lex loci delicti but disallowed by the lex forias being too remote? In my opinion the lex fori is the appropriate law. This is not inconsistent with Naftalin and M'Elroy so long as it is remembered that the lex delicti has a part to play in that it may cut down or limit a right to damages otherwise exigible in the forum. In my opinion, however, it should not create or extend a right not recognised by the forum.

I do not regard this conclusion as inconsistent with that in Boys v. Chaplin . Whichever of the various rationes is preferred in that case they lead to the result that there is no hard and fast rule compelling the forum to apply a foreign law which it does not itself recognise. Lord Upjohn in the Court of Appeal and Lords Donovan and Pearson in the House of Lords express a straight preference for the lex fori and I respectfully agree with their approach.

It was argued for the pursuer that in a situation such as this the matter had to be approached in three stages. These were that (1) the conduct had to be actionable by both sets of law; (2) thereafter the heads of damage and questions of remoteness were for the lex loci delicti; and (3) then the measure of damages fell to be assessed by the lex fori. I do not find the distinction between stage (1) and stage (2) easy to justify in principle or on authority, and I consider that the same rule should apply to stage (2) as to stage (1). In other words the heads of damage and questions of remoteness should be determined by the lex fori subject to the qualification that they must also be exigible according to the lex doci delicti.

From a practical point of view this is a conclusion which has much to commend it. It elides the lack of certainty referred to by Lord President Cooper in M'Elroy. It discourages "forum shopping." It recognises what I consider to be a realistic tendency to pay more regard to the lex fori in international questions of this sort. In a rapidly developing world it may not always be simple to point to the country in which a delict is supposed to have occurred. A delict committed on a hi-jacked aircraft provides a ready example. Finally to favour the lex loci delicti to the exclusion of the lex fori could lead to surprising results. It could mean not only that the Scottish courts had to award damages not recognised by the law of Scotland; it could, in certain circumstances not difficult to envisage, involve these courts in making awards which were contra bonos mores.

For these reasons I conclude that a head of damage not recognised by the lex fori is not recoverable notwithstanding that it is recognised by the lex loci delicti. The effect of this in the present case is the defender's third and fifth pleas in law are sustained. Quoad ultra I allow a proof before answer.