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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Muir & Ors v. Cameron [2003] ScotCS 328 (23 December 2003) URL: http://www.bailii.org/scot/cases/ScotCS/2003/328.html Cite as: [2003] ScotCS 328

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This is an action of reparation which arises from a road traffic accident which occurred on 8 April 2000. Steven James Muir ("the deceased") , while riding his motor cycle, collided with a car driven by the defender. As a result of the accident the deceased sustained multiple injuries from which he subsequently died. The first pursuers are the executors of the deceased, the second pursuer is his widow and the third and fourth pursuers are his parents. They all seek damages from the defender, who was the driver of the car.

The case came before me on the Procedure Roll. Parties had reached agreement on liability and on the question of contributory negligence, so that further enquiry would be restricted to quantum of damages, but parties had been unable to agree the mode of that enquiry. The pursuers sought a jury trial and the defender proposed a proof before answer. The discussion at debate focused narrowly on the second pursuer's averments in support of her claim for loss of support under section 1(3) of the Damages (Scotland) Act 1976 ("the 1976 Act").

The relevant averments in Article 6 of the Condescendence are as follows:

Counsel for the defender accepted that in terms of sections 9 and 11 of the Court of Session Act 1988 there was an onus on the defender to demonstrate that there was special cause on the facts of this case to justify a proof before answer rather than a jury trial. He further accepted that in this case special cause arose only from the pleadings in respect of the second pursuer's loss of support claim.

Counsel referred to dicta of Lord Justice-Clerk Thomson in two cases as setting the context for the decision in this case. In Boyle v. Glasgow Corporation, 1949 S.C. 254 at 261-262 he stated:

In Moore v. Stephen & Sons, 1954 S.C. 331 at 334-335, Lord Justice-Clerk Thomson stated:

Counsel for the defender mounted separate challenges to the pursuers' averments in respect of the earnings of the deceased and of the second pursuer respectively, the deceased's benefits in kind and his dividends. With regard to earnings, the complaint was simply that the amounts of their respective earnings were not averred and that in that state of affairs it was not possible, on the face of the pleadings, even to determine whether there was a loss of support at all. (Smith's Executrix v. J. Smart (Contractors) plc, 2002 S.L.T. 779 at 790F-H).

In Jamieson v. Allan McNeil & Son, W.S., 1974 S.L.T. (Notes) 9, Lord Maxwell dismissed an action of reparation in respect of alleged professional negligence. In relation to patrimonial loss, he stated:

Counsel submitted that this dictum would lead one to expect wage figures in the present case to be set out in the pleadings.

In Smith's Executors v. D.J. Smart (Contractors) plc in the Outer House (31 January 2002) Lady Paton had excluded from probation averments in support of a loss of support claim under section 1(3) of the 1976 Act on the basis inter alia of a failure to aver the net wages earned by the deceased or by his widow. The pursuers in that case reclaimed and the First Division reinstated those averments (2002 S.L.T. 779). Counsel pointed out, however, that by the date of the hearing in the Inner House the pursuers had lodged a schedule of damages. In light of this decision of the Inner House, counsel for the defender accepted that the second pursuer did not need to aver the precise degree of her dependency on the deceased.

Counsel sought further support for his submission in relation to the earnings averments from the decision of Lord Gill in O'Malley v. Multiflex (U.K.) Inc., 1997 S.L.T. 362. In that case Lord Gill refused issues on the basis inter alia of the state of the pursuer's pleadings in support of claims for future wage loss and loss of employability and the pursuer had not averred the amount of his pre-accident earnings in his employment with the defenders, nor had he explained the basis upon which he claimed for both future wage loss and loss of employability.

With regard to benefits in kind, counsel submitted that the second pursuer had failed to give any details of the nature of the benefits in kind, nor how they might have contributed to the deceased's support of the second pursuer nor of what the actual loss was. Benefits in kind could take many forms ranging from free accommodation to free clothes or meals at work. Such benefits might benefit a dependent relative directly, such as the provision of family health care, or the deceased alone, such as private health care for him. At the very least, the second pursuer required to aver what the benefit in kind was. Furthermore, the taxation position was likely to raise potentially difficult questions as different kinds of benefit were taxed in different ways. Counsel referred to the detailed explanation of the taxation of benefits in kind to be found in Whiteman on "Income Tax" 3rd edition, at paragraphs 14-51, 14-54 and 14-56.

Under reference to the decision of Lord McCluskey in Hatherley v. Smith, 1989 S.L.T. 316 at 318, a case involving the provision of a rent-free flat, counsel accepted that a benefit in kind may give rise to a loss of support on the death of the employee, but pleadings were still required.

With regard to dividends, counsel submitted, under reference to the decision in Anthony v. Brabbs, 1998 S.L.T. 1137, that lost dividend income could form part of a loss of support claim provided that part of the deceased's remuneration for his employment took the form of dividend income and the profitability of the company and hence the level of dividends had been adversely affected by his death. In that case the pursuer had sought damages for personal injuries. He was an engineering consultant in the oil industry and had provided his consultancy services through the medium of a Limited Company, of which he was a Director and sole employee, and he and his wife were the shareholders. He received a salary from the company, together with additional payments by way of a dividend on his shareholding. He averred that because he would not work as a result of the accident, the profit of the Limited Company would be reduced with the consequence that the dividends which the company would pay to him would also be reduced. The sheriff had excluded from probation the pursuer's claim in respect of loss of dividend income, but the First Division allowed his appeal and reinstated the claim. Counsel submitted that loss of dividend income on the death of a deceased in respect of shares in a company whose profitability was not directly influenced by the death would not give rise to a loss of support claim. The loss in such circumstances would be attributable to the effects of the deceased's will rather than directly to his death. This would give rise to a relevancy issue of the kind considered by Lord Justice-Clerk Thomson in Boyle and Muir. Accordingly, he submitted that singly and cumulatively these three heads of the loss of support claim constituted special cause to withhold the case from a jury.

Counsel for the pursuers submitted that the defenders' criticism of the pleadings was truly an attack on specification and not on relevancy. He rejected the idea implicit in the dicta of Lord Justice-Clerk Thomson that there was a two tier system of specification. In Boyle v. Glasgow Corporation (supra at page 261) Lord Justice-Clerk Thomson had said:

Counsel submitted that this dictum and the other dicta referred to by counsel for the defender were obiter dicta and, he submitted, did not represent the law of Scotland. He submitted that these dicta were inconsistent with the earlier law as summarised in Green's "Encyclopaedia of the Laws of Scotland" volume 8 at paragraph 1251:

Counsel referred to the two cases cited in support of this proposition, namely Haughton v. North British Railway Company, (1892) 20 R. 113, and Crannie v. Glengarnock Iron & Steel Co., (1908) 16 S.L.T. 646. In Haughton issues were allowed and the case went to a jury apparently with the defenders' preliminary plea to relevancy still outstanding. In Crannie Lord President Dunedin stated that that case was in exactly the same position as Haughton, namely that it contained only one relevant averment of fault. It too went to a jury on a record containing averments, some of which were known to be irrelevant and on the basis that the trial judge could direct the jury only to consider the relevant ground of fault. On this basis counsel submitted that the only issue for present purposes was whether the second pursuer's pleadings were sufficiently specific to give fair notice. If I was to find against him on that submission and find that there was a relevancy point, he invited me to distinguish Boyle and Moore and to follow the earlier decisions.

Counsel for the pursuers then turned to the three specific heads of challenge to the loss of support claim. With regard to the earnings of the second pursuer and the deceased, he submitted that his pleadings corresponded to the standard formulation which was generally acceptable to the courts. The broad nature of the employment was averred as was the name of the employers. That, he said, was all that required to be pled. Details of amounts would be the subject of evidence which, it was trite law, did not require to be pled.

Counsel referred to the decision of Lord Eassie in Currie v. Strathclyde Regional Council Fire Brigade, 1999 S.L.T. 61, and of an Extra Division in Stark v. Ford (No. 2), 1996 S.L.T. 1329. Those cases illustrate the proposition that "where one is dealing with a claim which is of a kind which defies quantification a jury is in as good, or even better, a position than a judge to make the assessment". (Stark v. Ford (No. 2) at 1331A).

Counsel submitted that the current practice for averring a wage loss claim did not involve averring the precise rate of pay at or prior to the date of accident. The current practice, he said, did not accord with Lord Maxwell's decision in Jamieson v. Allan McNeil & Son W.S. Lady Paton's decision in Smith's Executrix v. J. Smart (Contractors) plc had been wrong and had been reversed by the First Division. As a further example of current practice, counsel produced the closed record in an action, James Wight v. Smith Anderson & Company Limited, in which the defenders' preliminary pleas had been repelled, and issues allowed by Lord MacLean on 12 November 1997. The averment in question in that case was that the pursuer: "was absent from work from 25 August until 25 September, 1995. During his periods of absence he lost wages at his pre-accident rate." I note, however, the pursuer in that action was employed by the defenders who would, presumably, have ready access to his wage records. Counsel also pointed out that the lodging of a schedule of damages in Smith's Executrix between the date of the procedure roll hearing in the Outer House and the hearing of the reclaiming motion was not relevant to the tests properly to be applied to the pleadings themselves. Finally, he submitted that where, as in the case of a loss of support claim, a "melting pot" process was involved in evaluating the claim, the precise figures to be put into that melting pot were less important than would otherwise be the case in, for example, a multiplier and multiplicand calculation of a wage loss claim.

With regard to the benefits in kind averments, the same principles applied. The financial value of benefits in kind could not be precisely measured. Their value was very much a jury question. Hatherley v. Smith was an example of issues being allowed in respect of a benefits in kind claim. In due course the benefits in kind would constitute another ingredient to go into the melting pot of the jury's evaluation of the loss of support claim.

Counsel submitted the dividend income from shares was relevant to a loss of support claim. He explained that in this case the shares were in Edinburgh Communications Limited, the company of which the deceased had been a Director and by whom he was employed. It was just another sum of money which the deceased had contributed to the funds which went to support the second pursuer.

Finally, counsel submitted that O'Malley v. Multiflex (U.K. ) Inc. was an often misquoted case. The principal reason why issued had been refused was the failure of the pursuer's pleadings to explain the basis upon which the claims for future wage loss and for loss of employability were interrelated. Lord Gill had tested the pursuer's pleadings by asking whether an adequate and effective direction could be given to, and applied by, the jury on the contentious question (1997 S.L.T. at 363I-K).

Counsel for the defender disputed that contention that the dicta of Lord Justice-Clerk Thomson in Boyle and Muir were obiter. They were, he said, part of the reasoning in each case. Furthermore, those dicta were said to be consistent with the earlier law. Reference was made to Maclaren's "Court of Session Practice" at page 546 where it is stated that: "It has been held that special cause has been shown where actions are of doubtful relevance, ..." . I was also referred to two of the cases cited in support of that proposition; Vallery v. McAlpine & Sons, (1905) 7 F. 640, and Cass v. Edinburgh and District Tramways Co., 1908 S.C. 841. In Vallery the Second Division declined to interfere with the exercise of the Lord Ordinary's discretion. The Lord Ordinary had allowed a proof on the basis

In Cass the same Division of the court recognised the decision in Vallery that doubtful relevancy is a sufficient special cause and declined to interfere with the decision of the Lord Ordinary to allow a proof, having found the case to be of doubtful relevancy.

Counsel made two final submissions. First, he pointed out that the averments of the benefit in kind in Hatherley were vastly more specific than in the present case. In Hatherley the benefit in kind was the right to occupy a particular house free of rent, rates and external repairs. The rates were said to amount to £680 per annum and external maintenance costs to about £500 per annum. There was no figure for the notional rent of the property, but it was averred that the deceased's employers had a practice of giving married staff an allowance of £1,500 per annum in lieu of living accommodation, in the event that the staff occupied their own accommodation. From those figures Lord McCluskey was able to infer that the notional rent was of the order of £320 per year. As he put it (at 318H-I):

Counsel accepted the melting point analogy but maintained that one needed to know the ingredients. In this case that meant knowing the financial value of the benefits in kind in light of their tax treatment.

Secondly, counsel maintained and repeated his submission in respect of dividend income and pointed to the sharp conflict between his position and that of the second pursuer. According to the latter, any dividend income was relevant, whereas, according to the defender, it was only the amount by which the dividend income was reduced by the effect of the deceased's death on the profitability of the company that was relevant.

It was not disputed that the defender in this case must establish special cause in terms of section 9(b) of the Court of Session (Scotland) Act 1988 to avoid a jury trial. Despite the submissions for the second pursuer, I am satisfied that the relevant considerations are those set out in the dicta of Lord Justice-Clerk Thomson in Boyle and in Muir. Lord Gill's decision in O'Malley is a comparatively recent example of the specific application of these dicta (see 1997 S.L.T. at 363G-H). In any event, it is not the present practice in the Court of Session for issues to be allowed in the face of an outstanding relevancy plea.

The defenders' first attack on the loss of support claim concerns simply the absence of figures for the earnings of the deceased and the second pursuer at the date of death. In light of the decision of the First Division in Smith's Executrix I do not consider that that omission could constitute special cause for withholding a jury trial. The contrary reasoning was set out in the Opinion of Lady Paton ([17] to [20]), but her decision on this point was overturned. In light of this decision it would appear that Lord Maxwell's decision in Jamieson is no longer a reliable guide to present practice in relation to pleading a past wage loss or loss of support claim.

It is to be noted that the wage loss claim under consideration in O'Malley was not a simple past wage loss claim. The pursuer in that case was an upholsterer by trade. He claimed that he was permanently unfit for his previous employment or for any employment other than of a sedentary nature. The defenders averred that the pursuer had only been employed with them for about four months prior to the accident and that he was made redundant by them some nine or ten months after the accident. The defenders criticise the pursuer's pleadings inter alia in respect of the failure to aver his earnings in any prior employment or in any comparable employment or in respect of the financial implications of his physical restriction to sedentary work. There was, of course, the additional complication of the pursuer's failure properly to plead the interrelationship between a direct loss of earnings claim and a loss of employability claim. It was against this background that the submission in that case that: "by the date of the trial all the necessary wage information would have been recovered and produced. The presiding judge would then be able to give an appropriate direction." was held to fail to meet the requirement to test the "present" state of the pursuer's pleadings. In any event, the pursuer in O'Malley was employed by the defenders, so that the amount of his immediate pre-accident earnings could not have raised a serious fair notice issue. It appears to me that the issue in O'Malley was essentially one of relevancy or of lack of specification to the extent that it constituted an issue of relevancy.

I agree with Lord Gill's view expressed in O'Malley that the question of special cause "falls to be tested on the present state of the pursuer's pleadings. The court should make no assumption as to the adequacy of the information that may be produced in due course." I am unable to imagine how an appropriate direction could be given to a jury in respect of the second pursuer's claim in respect of benefits in kind without knowing at least what those benefits were. I agree with counsel for the defenders' submission in this regard. They could vary vastly. Some might be capable of being valued financially, whereas others might not. A benefit in kind such as the "tied cottage" in Hatherley may be capable of being expressed as a financial value per year. That precise figure could then be put into the "melting pot" in respect of which the loss of support calculation could then be made. Other benefits in kind may not be so simple. A company car, for example, may be taxed as part of a deceased's income, but may be of little benefit to a surviving widow if she already had and used her own car. In any event, I agree that the income tax position would have to be considered because it would affect the amount of the deceased's net income at the date of death which would normally be the starting point for the loss of support calculation. On the present state of the pleadings one can only speculate about the evidence which might be led and about the feasibility of giving an appropriate direction to a jury. Similarly, the possible complexity of the question to be decided by a jury can be no more than a matter of speculation on the basis of the present pleadings. I conclude, therefore, that the presence of this averment alone makes this case unsuitable for trial by jury.

The second pursuer's averment with regard to the deceased's dividend income is, in my opinion, equally lacking in specification. Notwithstanding counsel's concession that it relates to shares held by the deceased in Edinburgh Communications Limited, the company of which he was a Director, that income may have been affected by his death in a number of ways. The income of the company might have been directly affected by his death in the manner discussed in Anthony v. Brabbs. He may have required to hold shares in the company as a condition of his employment as a Director, in which case those shares would have had to have been sold or otherwise returned to the company on his death. He may have held shares in the company, possibly as part of a share option scheme or otherwise, the dividend income from which would be unaffected by his death other than as part of the succession to his estate. Regard would also have to be had to the terms of section 1(5)(a) of the 1976 Act which provides:

Further, unless the deceased's shareholding was of the type considered in Anthony v. Brabbs, there is likely to be a dispute between the parties as to the relevancy of that dividend income to the second pursuer's loss of support claim. For this reason too I consider that this case is unsuitable for trial by jury. While it may be inevitable that questions of relevancy may arise unexpectedly in the course of a jury trial, a case should not, in my opinion, be sent to jury trial in the knowledge that there existed between the parties an unresolved issue of relevancy.

For the reasons given above, I am satisfied that there is special cause for withholding this case from a jury and I shall allow a proof before answer.