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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> McWilliams v. Caledonian Wild Foods [2004] ScotCS 85 (02 April 2004) URL: http://www.bailii.org/scot/cases/ScotCS/2004/85.html Cite as: [2004] ScotCS 85 |
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OUTER HOUSE, COURT OF SESSION |
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OPINION OF LORD JOHNSTON in the cause JAMES McWILLIAMS Pursuer; against CALEDONIAN WILD FOODS LIMITED Defenders:
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Pursuer: McEachran, Q.C., Middleton; McKay & Norwell, W.S.
Defenders: Hanretty, Q.C., Charteris; Bishops
2 April 2004
[1] The pursuer is a restaurateur running a highly successful business in the High Street of Edinburgh. In 1999, while stationary at traffic lights in "the Bridges" in Edinburgh, he was struck was behind by a vehicle which has caused him what can be colloquially described as whiplash injuries. Liability is not in issue. [2] The claim before me on his behalf was devoted firstly to solatium, secondly, to the recoupment of certain medical expenses which were not in dispute at least to date and, thirdly, and most contentiously, the issue of patrimonial loss. [3] I will approach the matter upon the basis that solatium will reflect to some extent the conclusion I have reached on patrimonial loss and that therefore I will deal with it last of priorities in this judgment. Equally, apart from listing the actual figures, I will not address again the question of medical expenses, beyond how long I should consider that an award for the future should be made. [4] The real issue in this case, which was a very sharp one, related to the question of whether or not the pursuer's injury had impacted upon his business to the extent that he has suffered financial loss. [5] In this respect, although the pursuer's evidence was important, at the end of the day the matter was essentially one of assessment by competing accountants and in that respect I heard evidence from Mr Mitchell on behalf of the pursuer and Mr Dougall on behalf of the defenders. I do not dismiss the pursuer's evidence in this respect because, as will become clear later in this judgment, I recognise that he has striven very hard to maintain his business when he was at times in pain, at times needing help and most of all struggled against the problem created for him by the accident which of course was by no means his fault. [6] Before I address the issue in fact, I require to make an assessment of the relative reliability, because the issue of credibility in this case does not arise, in relation to the two professional witnesses. [7] Mr Mitchell was a man who had been helping, on a professional basis, the business, I think from its inception but, latterly, he had been ill and his involvement in the claim, as far as the present case is concerned, was twofold and limited. First of all he presented a claim to the solicitors acting for the pursuer on 18 September 2001 by a letter, which is recorded in Tab 3, of a comprehensive report from the defenders' accountants, 7/43. That particular claim, for reasons which I hope I will make clear, has become historic, but that was his immediate involvement. Latterly, he has been involved in preparing parts of the claim that is now put forward on behalf of the pursuer. In this respect productions 6/39 to 43 become very important. When these documents were tendered on the morning of the proof counsel for the defenders objected on the grounds that they were too late, irrelevant and, in any event, non-conform to the pleadings. The documents were admitted under reservation. In one major respect I agree with this objection and I will deal with it in due course. In the meantime, however, they are part of the issue that I have to address. However, that is the extent of Mr Mitchell's involvement. He was not required to produce a comprehensive report. A document was produced to me apparently constructed by the pursuer's legal advisers, C/39, but I attach no significance to that because I was given no evidence as to its status. [8] Turning to the question of reliability of the accountants, I have therefore to say that in some respects Mr Mitchell's evidence was not entirely satisfactory, I do not blame him for this because he is plainly looking at the matter from some distance and I am not sure that he was given fair opportunity to deal with the whole question of this case which plainly Pricewaterhouse, who Mr Dougall and his colleagues represent certainly were on the question of instruction. Some of Mr Mitchell's calculations were based on false premises or false extracts of figures from the accounts that were produced to both sides and in this respect I have some concern as to the acceptability of his basic evidence, particularly in relation to No.6/42 of process, which contains manifest errors. [9] In contrast, the two reports produced by Mr Dougall, 7/43 and a supplementary, 7/47 are immaculate in their presentation although, as regards the text and some contents slightly partisan. What is however much more important is that the tables upon which he based his calculations are both accurate in terms of extraction from the books of the pursuer's business and also accurately and immaculately calculated. Even more importantly to me, Mr Dougall's verbal evidence to me was measured, calculated and totally balanced and I have absolutely no hesitation in accepting everything he said to me, in substance, as a matter of accuracy if it competes with anything that Mr Mitchell was presenting. I am not criticising Mr Mitchell as an individual. I do not think he was given the same opportunity to do the task that was allotted to Mr Dougall, but I am satisfied that the latter performed it extremely well. Accordingly, on the basis of any attempt to challenge Mr Dougall's calculations and ultimate conclusions as a matter of reliability, and I repeat I am not dealing with credibility, I have no hesitation, having listened to the witness, in accepting his evidence in its entirety. [10] Against those assertions I now turn to decide the issues that I have to deal with in relation to patrimonial loss. [11] During the course of this case, various attempts have been made by the pursuer's advisers to formulate a claim, and I completely understand why from time to time a particular formulation has changed or been abandoned. In this respect the letter written by Mr Mitchell, which is Tab 3 in 7/43, is an attempt to formulate a claim for loss of wages and thus loss to the business. Mr McEachran, appearing for the pursuer, made no attempt to support that save, that at the time, it was a justifiable approach and that is a proposition with which I entirely accept. I am not however concerned to look at it any further because it no longer bases the position which counsel advances on behalf of his client. [12] At this point it is important to recognise the history of the matter. [13] The pursuer is a "hands-on" manager of his business and obviously a very successful and hardworking one. After this accident, which plainly caused him considerable physical problems, he took in fact very little time off, but found it more difficult to do the physical demanding aspects of his job. The extent to which, as I will refer to later, he has been medically under advice and treatment over the last four and a half years, indicates the extent to which he was disabled from doing what he was doing before the accident. His response was to bring his wife into the business as a partner, she having been previously playing a fairly small role in what was going on. A further response of that was to award her slightly less than 50% of the profits instead of salary, a balance between 47.5% to her and 52.5% to the pursuer. The simple claim by counsel for the pursuer was that the wife's share, i.e. 42.5%, was the basis of the pursuer's claim for loss and upon that basis he was entitled to recover all the money that effectively had been awarded to his wife by him, thus diminishing the 100% claim he was otherwise being able to achieve from the business profits. [14] Counsel for the defenders were critical of the various ways in which the claim had changed during the time that he and his supporters had been looking at the matter. However I am sympathetic to the problems of a person who is running his own business and has his life disrupted by an accident which is not his fault and thereafter tries to evaluate to what extent it has interfered with his position. However, the two salient facts are as follows. [15] Firstly during the course of the business back to the late 1980s Mrs McWilliams had not been a partner. Secondly the decision to make her a partner was to some extent to do with status, as it was asserted to me, but the proportion of profits awarded to her bore no relation in fact to the extent to which she was contributing to the business. If she had simply been employed by the pursuer to come into the business at a wage commensurate of what she was doing, that would have been immediately an acceptable claim and counsel for the defenders would not have denied that as I understand the position. That is, however, what did not happen in fact. [16] Against this background counsel for the defenders submitted that the involvement of Mrs McWilliams as a partner was too remote in law and, in any event, a voluntary act by the pursuer and as such could not admit a claim unless it could be shown that in any event the business had suffered a diminution of earnings or profits, or increase in costs by reason of the fact that the pursuer was disabled from carrying out the same tasks and involvement as he was doing before the accident. This is the issue to which I have made reference in this aspect of the case against the background of the accountants' evidence. In this respect I refer back to my conclusions as to the reliability of Mr Dougall's evidence. [17] However, before turning to the detail, it seems to me as a matter of general common sense, that if a business owned effectively by the pursuer at the time of the accident is to be shown to have suffered a loss because of his inability through injury to contribute to it, it can only be in two particular respects, one in respect of increased wages costs because he is required to employ people to take his place, or secondly decreased profits because he cannot work as hard as he previously was. Beyond that I have great difficulty in seeing how what is effectively a one-man business can claim financial loss. That must be regarded as a general proposition. [18] In the present case, the evidence of Mr Dougall confirms, or supports the view, that neither has happened, and this is what creates for me the difficulty that I have to address against the background of an undoubted serious injury to a very hardworking man, dedicated to his business. [19] Putting aside for the moment the question of how the business might have progressed on an issue of trends on its projections, focused in 6/41 and the chart projected there by Mr Mitchell, the fact is that the tables that have been argued by Mr Dougall in his report (7.43) in respect of the turnover of the business, and its consequent profits (2.47), the comparative exercise between post and pre-accident periods (2.69) and the ultimate conclusion in 3.31 all support the position that during the post accident period, if I may call it that, the business has in fact not lost money or increased its wage costs, to any material extent. [20] Accordingly, if my original propositions set out above are correct, there is no claim for financial loss in this case against the background of actual figures coming in and out of the business. Of course I recognise that the pursuer has almost halved his share of the profits with his wife because she has jointly been more in the business, but that does not seem to me to be necessarily conclusive in the matter and I will obviously now have to address this issue. [21] Before I do so, counsel for the pursuer sought, in any event, to point out the stagnation of turnover of the business, which was described as a plateau over the last two or three years, as indicating that it would have been bound to increase if the pursuer had been fully fit and able to make his contribution. This was based particularly on Mr Mitchell's chart to be found at 6.41 of process (A). [22] I confess that I have had some difficulty in this case of understanding why the turnover of his restaurant should suddenly plateau, the word used by counsel. To my mind the natural position would have been that it would continue to go up or naturally, go down because of the pursuer's disability. However, in this respect, I am prepared to sustain the objection of counsel for the defenders to the admissibility of this particular document (6/41) because it is not adequately based. No fair notice is given to the defenders in the pleadings and frankly Mr Mitchell had some difficulty in trying to justify how he kept on an upward trend against the reality of a constant flow of money in or out of the business not moving very much either way. In this respect Mr Dougall's tables are redolent of that fact. [23] I have no adequate evidence to support the view that the profits distribution agreed by the pursuer and his wife after the accident, namely whether its 52% and 47%, ironing out the other half percent, had any relation to the extent to which she was working in the business. On the other hand, I am not prepared to hold it was to do with tax efficiency. It seems to me it was probably some figure struck arbitrarily between the two, which is perfectly understandable, but the issue I finally have to determine is whether or not as a matter of law its being a voluntary act by the pursuer to reduce his personal earnings that I can find it as a loss in a business which has not in fact lost any money, on Mr Dougall's evidence which I accept, over that period. [24] I do not find the law in this respect particularly difficult. Pursuer's counsel relied on Banco de Portgual v Waterlow 1932 A.C.480 but I do not find that to be of assistance. Both counsel relied upon a case called Ward v Newalls Insulation Company Limited 1998 3 W.L.R. 1722. I have to confess I find that case completely unhelpful and being very special to its facts. [25] In my mind the issue of causation in law between a disaster and loss requires there to be a loss, and that loss must be unavoidable. The loss claimed in this case is easily avoidable if the pursuer had simply brought somebody in to replace him while he was not capable properly of running the business on his own evidence. The distribution of profits between him and his wife and the decision so to do is to my mind a voluntary act, disconnected from any immediate causative effect of the accident and, in any event, something for which the defenders should not be liable. The matter seems to me to be no more or less than the ultimate position of restitutio in integrum. I search in this case to find money that has been lost in this particular context and find none. If Ward therefore means that is what I should do, I propose to follow it, but I consider the matter is more resonant of reality and common sense. [26] In these circumstances, any claim for patrimonial loss is restricted to the medical costs which are agreed as far as to the present date are concerned, namely £3,096 plus interest of £637, and a limited claim for the future valued below. [27] Before finally dealing with the future in this respect, I have to deal with the medical evidence in the context of that element and also solatium. [28] I heard evidence from Professor Court-Brown and also from Dr Harry Burnett, who runs a private practice concerned with sporting injuries and his chief physiotherapist, Alison Downie. The latter two spoke substantially to the treatment that the pursuer has been receiving and continues to receive, both in terms of physiotherapy and acupuncture. I am satisfied that it is necessary for these treatments to continue, the only question being for how long in terms of the claim. [29] In this respect Professor Court-Brown's evidence in substance was that the symptoms from the original injury, which were pain, particularly in the shoulder and neck, resisting movement and causing severe discomfort would come and go, but were essentially triggered by the accident rather than caused by it to the extent that the pursuer would have been likely sooner or later upon his view to develop the same sort of problem. He thought an appropriate period from the date of the accident would be about seven years. [30] I am prepared to accept this evidence and therefore will allow a further period of one and a half years for the future in respect of both solatium and medical expenses. This adds a further sum of £1,150 to the medical expenses without interest. [31] As regards solatium, I was referred to three cases, Buchanan v Mason 2001 Rep.L.R. 67, a jury award of £21,000; Lebody v Liddle 2000 SCLR 495 where £15,000 was awarded; and Paterson v Kelvin Central Buses 1999 S.L.T. 685 where £11,000 was awarded, all for whiplash injuries of the same type as suffered by the pursuer. Counsel for the defenders maintained that the appropriate figure was much lower than that and suggested £7,500. [32] As I have said on a number of occasions, I do not regard decided cases of much assistance when it comes to solatium assessments which are essentially a one-off in each particular case, and this case is a good example of that because, as I have already indicated, I am prepared to recognise that beyond the actual physical symptoms from which the pursuer continues to suffer from time to time, there has been a considerable input of stress, disturbance psychologically, worry and general personality problems both in relation to his job and indeed, obviously, in relation to his workings with his staff. This has caused me to inflate or enhance what would otherwise would be an appropriate level for simple whiplash injuries. On that latter aspect, the sum in question would have been in the region of £15,000, but I am prepared to accept an enhancement for the reasons I have given to the figure suggested by counsel for the pursuer, namely £20,000 to which the figure of £3,502 requires to be added as interest to date based on an assessment of 85% in respect of the period to date. Again I am proceeding upon the basis that it is appropriate to regard the future as limited to a further one and a half years. [33] There is one further element, namely a claim by the pursuer for the cost of employing an extra chef, whom he took on in 2003 after his wife went off work from the business because of ill-health. Counsel for the defenders argued that that was the cause of this increased cost and it should not be allowed, but I do not accept that. It is obvious to me that the pursuer is still suffering from the effects of the accident and that is restricting of limiting the extent to which he can contribute physically to the business by way of working as a chef. It seems to me that the award should reflect this fact for a further one and a half years from the present date. I am prepared therefore to allow this cost for a total of two years from the date when the chef was taken on, which adds a further £6,350 in round terms to the total. [34] In these circumstances I assess damages at a total of £34,735 inclusive of interest to date, and will grant decree accordingly.
