FIRST DIVISION, INNER HOUSE, COURT OF SESSION

Lord President Lord Nimmo Smith Lord Clarke

[2007] CSIH 82 A794/05 A793/05   OPINION OF THE COURT   delivered by LORD NIMMO SMITH   in   RECLAIMING MOTION   in the causes   APPA UK LIMITED Pursuers and Respondents;   against   THE SCOTTISH DAILY RECORD AND SUNDAY MAIL LIMITED Defenders and Reclaimers;   and   GRAHAM HUTCHINSON Pursuer and Respondent;   against   THE SCOTTISH DAILY RECORD AND SUNDAY MAIL LIMITED Defenders and Reclaimers:   _______

 

 

Act: Woolman, Q.C., Henderson; Gillespie McAndrew (for Bannatyne Kirkwood France & Co., Glasgow) (Pursuers and Respondents)

Alt: Dunlop; Balfour & Manson, LLP(for Levy & McRae, Glasgow) (Defenders and Reclaimers)

 

19 October 2007

 

[1] These are two related actions at the instance of the pursuers and respondents, Graham Hutchinson ("Mr. Hutchinson") and AppA UK Limited ("AppA"). Mr. Hutchison is, we understand, the Managing Director of AppA, and in his pleadings he describes himself as AppA's "owner". The defenders and reclaimers are the publishers of the Daily Record newspaper. The issue of the Daily Record published on 29 November 2005 carried articles relating to Mr. Hutchinson and AppA. The articles were critical of the methods by which they sold beds, which they described as "therapeutic beds", to elderly customers. Within a few days the pursuers had raised actions in which they averred that the articles in question were defamatory of each of them, and claiming reparation therefor. Both actions were defended. From an early stage, the main issues between the parties were whether the articles complained of bore the meaning contended for by the pursuers, whether the sting of the articles complained of was substantially true, and whether the articles complained of were subject to qualified privilege. There were also issues relating to the quantum of damages, in the event of liability being established.

[2] The two actions have proceeded more or less in tandem. After sundry procedure, a proof before answer was allowed, in the action at the instance of AppA on 17 May 2006, and in the action at the instance of Mr. Hutchinson on 6 June 2006. The intention of the parties was that the proofs should be concurrent, and should last for eight days. In due course, diets of proof were fixed, but for no known reason to start on different dates, that in AppA's action being set down to start on 30 October 2007 and that in Mr. Hutchinson's on 6 November 2007: before us, counsel were agreed that this was done by mistake, and that both diets of proof should start on the earlier date. On 16 October 2007 the Lord Ordinary, on the opposed motion of each of the pursuers, discharged these diets of proof. The defenders have reclaimed against the Lord Ordinary's interlocutors. The Lord Ordinary has, with commendable speed, prepared an Opinion in which he has set out his reasons for discharging the diets of proof. We have today found each cause suitable for early disposal and have appointed the motion for review to be heard today on the single bills.

[3] As appears from the Lord Ordinary's Opinion, senior counsel who then appeared on behalf of the pursuers identified a number of difficulties in relation to the state of preparation of their cases. He explained that only a very limited number of productions had been lodged on their behalf. A significant number of additional productions would be required in order to substantiate the averments set out in the pleadings. The averments as to loss would require the support of extensive productions relating to the accounts of the pursuers and the report of an accountant. In addition, although a large number of witnesses had been included in lists on behalf of the pursuers, none had been precognosced and counsel "had little or no idea as to what they might say". In short, the pursuers' preparation for proof was "hopelessly inadequate". Counsel conceded that this was a lamentable state of affairs. The explanation tendered to the Lord Ordinary for this state of affairs was that the pursuers had been placed under severe financial pressure, not only as a result of the downturn in trade as a direct result of the contents of the articles complained of, but also by their inability to sell by credit from the summer of 2006 onwards. Following the publication of the articles AppA applied for a consumer credit licence. They had been unable to obtain a consumer credit licence until early in 2007. Mr. Hutchinson, as pursuer in his own action and as Managing Director of AppA in the action at their instance, had instructed his Glasgow agents not to spend any money on the preparation for the proofs until the difficulties with respect to the consumer credit licence had been resolved. It does not appear that the Lord Ordinary was provided with information about the financial position of either of the pursuers, beyond that set out above. Neither before the Lord Ordinary, nor before us, was reference made to AppA's accounts, or similar financial information. Information, of a general nature, was placed before us, indicating that Mr. Hutchinson is a man of some financial substance

[4] It is convenient at this point to supplement the information provided to the Lord Ordinary about the consumer credit licence with information supplied to us. As we understand it, Mr. Hutchinson originally traded on his own account, and held a consumer credit licence under the Consumer Credit Act 1974. When AppA started trading, they did not hold a consumer credit licence, and accordingly insofar, at least, as that statute applied, were trading unlawfully. AppA sought to rectify this by applying for a licence. An adjudicator, acting on behalf of the Office of Fair Trading, served a notice on AppA that he was minded to refuse the application for a licence. Representations were then made to the adjudicator on behalf of AppA. These representations included a hearing, at which AppA were represented by senior counsel. Having considered the representations, including various undertakings, the adjudicator determined to grant the application for the licence. The determination is, we are told, dated 11 October 2007. The determination stated inter alia that the adjudicator took a serious view of the matters set out in the minded to refuse notice which were found to be established. Although the minded to refuse notice is not before us, it would appear that these matters had been the subject of a separate complaint to and investigation by the Office of Fair Trading. The nature of them may be found in the terms of the undertakings, including the undertaking that AppA "will not use inappropriate, high pressure or miss-selling tactics", which included "inflating the initial price followed by the offer of a discount", "claiming the price can be reduced due to any grant by the Government, a charity or any other body", and "claiming the AppA bed can or will alleviate the cause or symptoms of a customer's medical condition".

[5] Counsel for the defenders indicated that they were ready to proceed to proof. A number of the witnesses were elderly and there was a prospect that some of them might die before a new diet of proof. The defenders were prepared to restrict the diets of proof to liability only and leave the question of quantum until later. They had carried out a significant amount of work in preparation for the proof.

[6] The Lord Ordinary states in his Opinion:

"It was clear that there had been a deliberate course of action on the part of the pursuers not to put agents in funds in order to prepare for the proofs. The result of that was that with respect both to the lodging of productions and the precognition of witnesses no satisfactory work had been carried out. That put the court in a very difficult position and it seemed to me that the conduct of the pursuers was indicative of a degree of disrespect for the court. However, I had regard to the state of preparation as it now existed; the length of time available prior to the diets of proof; and the alternative approach of restricting proof. I came to the conclusion that there was no realistic prospect of the case being ready to proceed to proof, even on a restricted basis, on either date. ... I came, with some hesitation and reluctance, to the conclusion that, despite the conduct of the pursuers, the interests of justice required that I should exercise my discretion by discharging the two diets of proof."

[7] We recognise that the decision taken by the Lord Ordinary was one which called for the exercise of his discretion, with which we should not lightly interfere. The test for interference has been variously formulated in authorities to which reference has been made before us. In Britton v Central Regional Council 1986 SLT 207 it was held, under reference to the speech of Lord Fraser of Tullybelton in A v A (Minors: Custody Appeal) [1985] 1 WLR 647 that:

"[T]his appellate court may not interfere with the decision of the Lord Ordinary unless it is satisfied either that he exercised his discretion upon a wrong principle or that, his decision being so plainly wrong, he must have exercised his discretion wrongly."

In Thomson v Glasgow Corporation 1962 SC (HL) 36 Lord Reid, at page 66, in a passage quoted in McGhee v Diageo plc [2007] CSIH 68, paragraph [5], said:

"[T]his House would not overrule the discretion of a lower Court merely because we might think that we would have exercised it differently. ... We might do so if some irrelevant factor had been taken into account, or some important relevant factor left out of account, or if the decision was unreasonable, and we would no doubt do so if the decision could be said to be unjudicial."

[8] Recognising the test to be derived from these authorities, counsel for the defenders submitted, first, that the Lord Ordinary's decision was erroneous in law. The pursuers had taken a deliberate decision not to make preparations for a proof, the diets of which had been fixed many months previously by reference to counsel's diaries. They had said nothing about this decision to the defenders or to the court. Given the nature of this decision, its consequences ought not to have been taken into account by the Lord Ordinary. Secondly, counsel submitted that the Lord Ordinary's decision was unreasonable. To the extent that he appeared to have proceeded on the basis that the defenders were in some way responsible for the pursuers' difficulties in respect of the consumer credit licence, this was not supported by the facts. This could be demonstrated by reference to the adjudicator's determination. Thirdly, the Lord Ordinary had failed to take relevant factors into account. In deciding where the interests of justice lay, he had considered only the position of the pursuers. He had not had regard to the position of the defenders, to the position of potential witnesses, many of them elderly, and to the wider public interest in the efficient administration of justice.

[9] Senior counsel now instructed for the pursuers did not seek to contradict the information that had been placed before us about the consumer credit licence. He did not seek to argue that the situation confronting the Lord Ordinary had been brought about by the impecuniosity of either of the pursuers, or in any event that the defenders were in any way, directly or indirectly, responsible for it. He accepted that Mr. Hutchinson had taken a deliberate decision, on behalf of himself and of AppA, that preparations for the proof should be suspended while attention was given to the obtaining of the consumer credit licence, which he regarded as essential for the continuation of the business. Counsel submitted, however, that the Lord Ordinary's decision was not wrong in principle, or plainly wrong, and that there was no flaw in his approach which would warrant interference by us with the exercise of his discretion.

[10] We accept the submissions of counsel for the defenders. We have no hesitation in concluding that this is a case where we should interfere with the exercise of the Lord Ordinary's discretion. We are quite satisfied that the Lord Ordinary did go wrong and that the plain interests of justice require us, in the exercise of our discretion, to reverse his decision. The pursuers have chosen to bring these actions and in doing so to invoke not only the jurisdiction of this court to award damages to the victims of defamation, but also the procedures designed to enable actions to be disposed of fairly and within a reasonable time. There is some degree of flexibility in the fixing of diets of proof, both so as to permit adequate time to each of the parties to make their preparations, and also to enable them, so far as reasonably practicable, to secure the services at proof of counsel of their choice. But once a diet of proof has been fixed, different considerations arise. Court resources are by their nature finite. There are many actions before this court, all of which require to be disposed of fairly and within a reasonable time. There is a clear public interest in the efficient administration of justice. It is impossible to run court business on the footing that a party may decide, particularly at a late stage, for reasons of his own, that he does not wish to proceed to proof on a date which has been fixed for months and that he would prefer a later date. Obviously, there will be cases in which supervening events, beyond the control of parties, may affect their preparations. In such cases, the interests of justice may necessitate the discharge of diets of proof. Much will depend on the circumstances of the particular case, and on the steps which parties affected by circumstances beyond their control have taken to safeguard their positions. Obvious steps, which were not taken in the present case, would include enrolling for the discharge of the diet of proof at an early stage, as soon as the difficulties begin to emerge, and enrolling for a sist of the action. The sooner the other party, and the court, are put in the picture, the more likely it is that a favourable view will be taken of the party who finds himself, or anticipates that he will be, in difficulties in his preparations for the proof. In the present case, the difficulties are entirely of the pursuers' own making, and in any event the motions enrolled by them come far too late. Parties who treat the court, and their opponents, in such a cavalier fashion can expect scant sympathy.

[11] For these reasons, we shall allow the motion for review of each of the Lord Ordinary's interlocutors, to the extent of recalling those parts of the interlocutors discharging the diets of proof and finding the pursuers liable in the expenses occasioned by such discharge. We shall appoint the proof in each action to begin on 30 October 2007 and for seven ensuing days, both restricted to the question of liability. On the unopposed motion of counsel for the defenders, made at the Bar, we shall appoint the defenders to lead at the proof. Finally, we shall find the pursuers liable to the defenders in the expenses occasioned by the appearance at the motion roll on 16 October 2007 and of today's hearing.

[12] By way of footnote, we would add that after we had given our decision, and while this Opinion was in preparation, we were informed that the pursuers had abandoned both actions. The lessons are obvious.