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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 77
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A1377/02
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OPINION OF C.J.
MacAULAY, Q.C.
(Sitting as a
Temporary Judge)
in the cause
McGARVEY
CONSTRUCTION LIMITED
Pursuers;
against
ROBERT THOMSON
SHANKS
Defender:
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Pursuers: Stuart;
Allan McDougall
Defender: Webster;
Drummond Miller, W.S.
27 April 2007
Introduction
[1] This is an action for damages
for fraudulent misrepresentation. The
defender's first plea-in-law is to the effect that the pursuers' averments are
irrelevant et separatim lacking in
specification and that the action should be dismissed. The case came before me for debate on the
procedure roll. On behalf of the
defender it was submitted that the action should be dismissed or that in any
event certain averments should not be admitted to probation. On behalf of the pursuers it was submitted
that I should allow a proof before answer.
[2] The
pursuers describe themselves as groundworks and civil engineering
contractors. Their pleadings disclose
that in July 2001 they entered into a contract with a company called
Kinnaird Homes Limited to carry out works at a site at Cubrieshaw
Park, Ardrossan
High Road, West Kilbride. Sixteen new houses were being built at that
location. The pursuers did carry out
certain work at the site and applied for payment of г375,936.83. They claimed that to be the value of the work
carried out. They received г254,988
by way of payment ostensibly from Kinnaird Homes Limited. That meant that there was an outstanding
balance of г120,948.83. That is the
sum the pursuers sue for in the first conclusion.
[3] The
pursuers allege that by letter dated 17 May
2002 from solicitors acting on behalf of Kinnaird Homes Limited the
contract was repudiated. Consequently
the pursuers were prevented from performing the remaining works which they say
they were entitled to perform under the contract. They now claim that they have suffered a loss
of profit of г109,834.65. The
pursuers sue for that sum in the second conclusion.
[4] The
pursuers raised proceedings in the Court of Session against Kinnaird Homes
Limited for the sums now covered by the first and second conclusions in this
action. They obtained decree against
that company for payment of those sums.
That decree remains unsatisfied because Kinnaird Homes Limited has no
funds. The taxed expenses in those
proceedings amounted to г5,133.57 and it is that sum that is now being
sued for in the third conclusion of this action.
The pleadings
[5] The pursuers aver that Kinnaird
Homes Limited was a "Shell company". In
relation to the sums of money actually paid to the pursuers, the pursuers contend
that that money was provided to Kinnaird Homes Limited by a company called
Kinnaird Homes (West Kilbride) Limited.
[6] In
Article 4 of Condescendence the pursuers make inter alia the following averments:
"The pursuers
were induced to contract with Kinnaird Homes Limited by fraudulent
misrepresentations of the defender. The
defender was director and secretary of Kinnaird Homes Limited. He was a director of Kinnaird Homes (West
Kilbride) Limited. On or
about 15 June 2001 the defender met with James McGarvey and Patrick Gallagher
of the pursuers. They met at 86 Clark
Street, Paisley. Gordon Fisher and Douglas Somerville,
the latter being the pursuers' surveyor, were also present. The meeting took place at the request of the
defender. The defender told McGarvey and
Gallagher that the existing main contractor, Jackson Construction, had been put
off site. He asked McGarvey and
Gallagher whether the pursuers would assume the role of main contractor. McGarvey said that the pursuers would require
a bond to secure the performance of the obligations of Kinnaird Homes
Limited. No such bond or guarantee was
or had been offered to the pursuers. The
defender said however that Miller Homes were providing the finance for the
development at the site. Miller Homes
were part of the Miller Group. The
pursuers had previously worked for parts of the Miller Group. The defender handed to Gallagher a business
card of a director of Miller Homes. The
defender he (sic) described the role
of Kinnaird Homes Limited. The defender
told McGarvey and Gallagher that Kinnaird Homes was developing the site at Cubrieshaw
Park. He said that Kinnaird Homes Limited had gone
into partnership with Miller Homes to develop the site. He said that as main contractors the pursuers
would be working for Kinnaird Homes Limited and Miller Homes. Those statements by the defender were
misrepresentations of the true position.
In particular, the statement that Kinnaird Homes Limited was developing
the site was false. The objective
meaning of the phrase "developing the site" was the ordinary meaning, namely
"building houses on the site". Kinnaird
Homes was not developing the site. The
site was being developed by Kinnaird Homes (West Kilbride)
Limited".
[7] The
pursuers go on to aver that Kinnaird Homes Limited had entered into a Joint
Venture Agreement and a Development Agreement with Miller Residential
Development Services Limited and Kinnaird Homes (West Kilbride) Limited in
respect of the development at Cubrieshaw Park.
They aver that Kinnaird Homes (West Kilbride)
Limited owned the land and had entered into an agreement with the Royal Bank of
Scotland to
borrow up to г1.2 million for the proposed development.
[8] In
Article 4 of Condescendence the pursuers also make the following
averments:
"Further, the
statement that Kinnaird Homes Limited had gone into partnership with Miller
Homes to develop the site was materially misleading, in that it falsely implied
that Kinnaird Homes Limited was developing the site, in that it falsely implied
that Kinnaird Homes Limited and Miller Homes alone had gone into a partnership
or joint venture to develop the site, in that it failed to disclose that
Kinnaird Homes (West Kilbride) Limited was also a party to the partnership, or
joint venture, in that it failed to disclose that in terms of the joint venture
agreement Kinnaird Homes (West Kilbride) Limited was to carry out the
development, as principal, and in that it failed to disclose that Kinnaird
Homes Limited would not therefore be developing the site. Further, the statement that as main
contractors the pursuers would be working for Kinnaird Homes Limited and Miller
Homes was materially misleading, in that it falsely implied that Kinnaird Homes
Limited was developing the site and in that it failed to disclose that in terms
of the Joint Venture Agreement Kinnaird Homes (West Kilbride) Limited was to
carry out the development, as principal.
The statements were fraudulent.
The defender knew them to be false or materially misleading when he made
them. The defender made the statements
intending that the pursuers would rely upon them. He intended that the pursuers would, in
reliance upon his statements, agree to become main contractor for the
development and contract with Kinnaird Homes Limited. As a result of the defender's fraudulent
misrepresentations the pursuers have suffered the loss hereinafter condescended
upon".
[9] It
can be seen therefore that the pursuers rely upon three representations in
support of their case of fraudulent misrepresentation. Firstly they aver that the defender said that
Kinnaird Homes Limited was developing the site.
Secondly, they aver that the defender said Kinnaird Homes had entered
into a partnership with Miller Homes to develop the site. Thirdly, they aver that the defender said
that the pursuers as main contractors would be working for Kinnaird Homes
Limited and Miller Homes. So far as the
second and third representations are concerned, apart from supporting the first
representation that Kinnaird Homes Limited was to be the developer of the site,
it is what was not said by the defenders that the pursuers contend results in
these particular representations being fraudulent.
[10] The pursuers also make certain averments to develop their
contention that Kinnaird Homes Limited was no more than a Shell company. In particular they aver that Kinnaird Homes
Limited was not trading and had no assets or income of its own. They aver that Kinnaird Homes Limited did not
in fact undertake the functions of a main contractor because it did not
undertake site supervision, played no role in the control of the site or the
co-ordination of activities at the site, did not provide a road bond, and had
no employees on site. The pursuers
summarise their position in relation to the role played by Kinnaird Homes Limited
in the following way:
"It merely acted
as a conduit for the payment of funds to contractors and to stand in the way of
any direct contractual relationship between contractors on the one hand and
Kinnaird Homes (West Kilbride) Limited on the other".
[11] In pleading their case on causation in Article 5 of
Condescendence the pursuers inter alia make
the following averments:
"The pursuers
relied upon the defender's misrepresentations.
They decided to contract with Kinnaird Homes Limited. They made that decision because of the
defender's representations to the effect that that company was developing the
site, that it had gone into partnership with Miller Homes to develop the site
and that as main contractors the pursuers would be working for Kinnaird Homes
Limited and Miller Homes. But for the
defender's representations to that effect whether taken separately (but for the
first) or in any combination the pursuers would not have contracted with
Kinnaird Homes Limited in circumstances where no bond or guarantee had been
offered to ensure payment in the event of Kinnaird Homes Limited being unable
to pay the pursuers. It was the policy
of the pursuers not to contract without a performance bond when dealing with
companies that they had not dealt with before.
They had not dealt with Kinnaird Homes Limited before. They had dealt with the Miller Group
before. They knew that Miller Homes was
a company of substance with a reputable track record".
[12] It can be seen, therefore, that in relation to the three
strands upon which the pursuers rely in making their case of fraudulent
misrepresentation, the first of these, the representation that Kinnaird Homes
was developing the site is not said to be causative of any loss on its own and
requires proof of at least one of the other strands relied upon to be causative.
Submissions for the Defender
[13] In inviting me to sustain the
defender's first plea-in-law attacking the relevancy of the pursuers' case Mr Webster
advanced three propositions. Firstly, he
argued that the action as pled was irrelevant because the pursuers had failed
to adequately aver any statement which could be said to be untrue and which
induced the contract, or at least the averments made were contradictory in this
regard. Secondly, he argued that certain
averments made about a purported contract between Kinnaird Homes Limited and
Kinnaird Homes (West Kilbride) Limited were irrelevant
because the pursuers had not averred a proper basis for vitiating any such
contract. He argued that these averments
should not be admitted to probation if the action was not to be dismissed under
his first proposition. Thirdly, Mr Webster
argued that the loss claimed by the pursuers was too remote from the breach of
delictual duty relied upon.
[14] In developing his first proposition Mr Webster submitted
that to make a relevant case the pursuers had to aver a statement of fact that
was untrue and that general averments of fraud would not suffice. The untruth and the intention to deceive had
to be particularised. If the pleadings
disclosed that the statement or statements relied upon had the ability to be
truthful then the case is irrelevant. In
developing this part of the submission, Mr Webster referred to Leslie v Lumsden 1856 18D 1046 and in particular Lord Ardmillan
at 1070. He also relied upon the
article by Professor Thomson in the Stair
Memorial Encyclopaedia volume 11 and in particular
paragraphs 709, 712 and 723, and MacDonald
v Fife, Ireland & Dangerfield 1895
3 SLT 124.
[15] Mr Webster drew attention to the manner in which that part
of the pursuers' pleadings which I have set out at paragraph [9] had been
framed. The suggestion made in the
pursuers' pleadings was that the representation relied upon by the pursuers
that the defender had told McGarvey and Gallagher that Kinnaird Homes Limited
was developing the site was not relied upon by the pursuers on its own as
having induced the contract. Yet, it was
only that particular averment that was positively identified by the pursuers as
being a falsehood and, according to the pursuers' averments, was not causative
on its own. The other two
representations relied upon by the pursuers fell to be contrasted to the clear
label of falsity attached to the first representation in that they were only
described as "materially misleading". Mr Webster
submitted that in the circumstances that description was not sufficient to
justify a case based upon fraudulent misrepresentation. Furthermore, in relation to the first
representation Mr Webster argued that, on the basis of the pursuers' own
pleadings, it could not be said that Kinnaird Homes Limited were not developing
the site. Kinnaird Homes Limited was, on
the pursuers' averments, a party to the Joint Venture Agreement and Development
Agreement and had entered into a contract with Kinnaird Homes (West Kilbride)
Limited for that purpose. Furthermore,
there was no dispute that Kinnaird Homes Limited had in fact received money
from Kinnaird Homes (West Kilbride) Limited in respect
of the development. Also, the
representation that Kinnaird Homes Limited had gone into partnership with
Miller Homes to develop the site seemed to be accepted by the pursuers as in
fact being true because the pursuers in response to the defender's averments
did admit that "Kinnaird Homes Limited had entered into a Joint Venture Agreement
and Development Agreement with Miller Residential Development Services Limited
and Kinnaird Homes (West Kilbride) Limited .". He referred to Mair v Wood 1948
SC 83 in support of the proposition that a joint venture was "simply a
species of the genus partnership". In
summary therefore Mr Webster submitted that the only positive untruth was
in respect of the first representation but
that representation was of no substance on the basis of the pursuers'
own averments and the pursuers did not rely on that representation alone as
having induced the contract.
[16] Mr Webster also attacked the pursuers' formulation as to
what was or was not causative as contradictory because the pursuers appeared to
rely on all three representations but they also sought to exclude one of them.
[17] The second proposition advanced by Mr Webster was to the
effect that a number of averments making reference to "a purported" contract
between Kinnaird Homes Limited and Kinnaird Homes (West Kilbride)
Limited should not be admitted to probation.
These averments are to be found at page 7D, page 8E-9C and
page 13E. He argued that these
averments were irrelevant because the Pursuer was attempting to question the
validity of a contract without identifying in law a basis for the contract being
vitiated. Under this part of his
submissions Mr Webster also argued that averments on page 6E-F
alleging that Kinnaird Homes Limited was a Shell company were contradictory
because on the basis of the pursuers' own pleadings the pursuers have been paid
in the region of г250,000 by that company.
That in itself, Mr Webster argued, indicated that Kinnaird Homes
Limited did trade.
[18] Under reference to his third proposition that the loss sought
was too remote, Mr Webster submitted that on the pursuers' pleadings the
loss sustained by the pursuers was due to Kinnaird Homes Limited's
impecuniosity after it had made payments in the region of г250,000. He submitted that in these circumstances the
loss complained of by the pursuers was not proximate to the delict founded upon
on Record. The pursuers had a right
against Kinnaird Homes Limited in contract and that company's impecuniosity
some way into the contract and after a substantial amount had been paid meant
that the pursuers' loss was not caused by any delictual behaviour on the part
of the defender.
Pursuers' Submissions
[19] In inviting me to allow a
proof before answer of all the averments and all pleas Mr Stuart reminded
me of the well known test of relevancy set out in Jamieson v Jamieson 1952
SC (HL) 44 that to dismiss an action at this stage the Court must conclude
that the pursuers must necessarily fail even if all their averments are assumed
to be true.
[20] Mr Stuart submitted that the pursuers were offering to
prove that the misrepresentations founded upon were made fraudulently with the
intention that the pursuers be induced to contract with Kinnaird Homes
Limited. He submitted that it was clear
from the pleadings that Kinnaird Homes Limited was in effect acting as a
firebreak between the pursuers and the company with assets, here, Kinnaird
Homes (West Kilbride) Limited. He argued
that standing the averments offering to prove that Kinnaird Homes Limited was
no more than a shell company a proof was necessary even although there were
factors in support of Kinnaird Homes trading.
[21] In his analysis of the pleadings Mr Stuart indicated that
there were three misrepresentations being founded upon. He argued that the pleadings do specify why
the misrepresentations founded upon were truly misrepresentations and why they
were false. So far as the
misrepresentation relating to the development of the site was concerned, he
submitted that the pleadings did indeed specify what was false, namely that
Kinnaird Homes Limited was not developing the site but merely acting as a
conduit. He accepted that that
particular misrepresentation was not relied upon on its own as having induced
the contract but he countered Mr Webster's submissions by arguing that the
position on Record simply meant that either the second or the third representations,
separately or cumulatively with the first, induced the contract and the
formulation set out in the pleadings was merely to deal with the situation if
only one or two or the misrepresentations relied upon was proved. The misrepresentation that Kinnaird Homes
Limited was developing the site took colour from the other two
misrepresentations and taken together with the other two misrepresentations was
being relied upon as inducing the contract.
[22] In relation to Mr Webster's challenge of the formulation
"materially misleading" in respect of the second and third misrepresentation, Mr Stuart
argued that there was nothing inadequate by the use of that expression. He submitted that it was plain from the
pleadings that what is alleged to have been said by the defender was being
categorised as false. He submitted that
even if there was some truth in the statements made by the defender, if the
context in which the statements were being made was a misleading one, then that
would be sufficient to constitute a fraudulent misrepresentation. The defender had not made an appropriate
disclosure of relevant and important facts.
What was missing was the fact that the pursuers had not been told that
Kinnaird Homes (West Kilbride) Limited were a partner or
that they owned the land and were the true developers of the site. As owners of the site they were in possession
of an important asset whereas Kinnaird Homes Limited as it turned out had no
assets at all.
[23] In developing his argument on partial non disclosure, Mr Stuart
referred to Chitty on Contract (29th edition),
volume 1, at paragraph 6-016, and in particular the observation made
in that paragraph that a statement may amount to a misrepresentation if facts
are omitted which render the statement false or misleading in the context in
which it is made. He also relied on R v
Kylsant 1932 1 KB 442 and Gloag & Henderson, The Law of Scotland (11th edition)
at paragraph 10.05. In essence his
position was that by omitting to refer to Kinnaird Homes (West
Kilbride) Limited's direct involvement in the development the
defender materially misled the pursuers and that omission converted the
statements that were actually made into falsehoods.
[24] In response to Mr Webster's challenge directed towards
certain averments where the pursuer used the description "purported" to
describe the contract between Kinnaird Homes Limited and Kinnaird Homes (West
Kilbride) Limited, Mr Stuart submitted that it was not incumbent upon the
pursuers to reduce any arrangement that may have been entered into between
these two companies. The pursuers were
not privy to any such arrangement and the language used in the pleadings was
simply there to indicate that so far as the pursuers are concerned Kinnaird
Homes Limited was merely a shell company with no meaningful role to play and
that any contract it may have entered into with Kinnaird Homes (West Kilbride)
Limited was simply window dressing. So
far as Mr Webster's argument that the averments relating to Kinnaird Homes
Limited being a shell company were contradictory was concerned, Mr Stuart
submitted that the pursuers were offering to prove that in fact Kinnaird Homes
Limited was a shell company and that the role it played in making payments to
them during the currency of the contract did not mean that the pursuers were
bound to fail in that task.
[25] In responding to Mr Webster's remoteness argument Mr Stuart
submitted that the test for the recovery of damages for fraudulent
misrepresentation is whether the loss arose directly or naturally from the
defender's fraudulent conduct. He
referred to the article in the Stair
Memorial Encyclopaedia by Professor Thomson at paragraph 731 in
support of that proposition. He
submitted that the misrepresentations relied upon by the Pursuer were closely
connected to the loss which they claim they suffered. It was because the defenders misled them that
they contracted with Kinnaird Homes Limited and suffered the loss they
suffered.
[26] In the course of this part of the argument reference was also
made to Chitty on Contracts (29th edition),
volume 1 at paragraph 6-049 and 6-050. In paragraph 6-049 the damages that can
be recovered in a case of fraud is contrasted to the position in contract. Whereas in contract the innocent party is entitled
to be placed in the position he would have been in if the contract had been
performed, in a case of fraud the innocent party is to be put in the position
he would have been in if the representation had not been made. Having had his attention drawn to that
particular statement, Mr Stuart accepted that he would require to amend,
particularly in relation to that part of the claim seeking to recover loss of
profit.
Reply by the Defender
[27] Although Mr Webster had not
attacked the loss of profit claim specifically in his initial submission in his
reply he latched on to the observations made in Chitty and he submitted that the pursuers could not insist upon
their loss of profit claim and that accordingly in any event the second
conclusion should be refused at this stage.
[28] In addressing Mr Stuart's argument that the second and
third representations were fraudulent because they only provided a partial
disclosure of the true position Mr Webster submitted that in a case of
partial non disclosure there had to be a duty to disclose before a case based
on fraud could be relevant. In
presenting that particular part of the submission Mr Webster made
reference to McBryde, The Law of Contract
in Scotland (2nd edition), paragraph 14-17 to
paragraph 14-25. Mr Webster
argued that it could not be said in this particular case on the basis of the
Pursuer's pleadings that there was a duty to disclose any more than had been
disclosed by the defender. There was no
suggestion that the pursuers made any enquiries about Kinnaird Homes Limited's
financial position. The defender could
not be held responsible for the pursuers' failure to ask questions which the
pursuers now considered in hindsight might have been relevant to whether or not
they were prepared to enter into a contract with Kinnaird Homes Limited.
Discussion
[29] In Leslie v Lumsden, in the
passage referred to by Mr Webster in Lord Ardmillan's opinion, in
dealing with fraud the learned Judge made the following observations (page 1070):
"Fraud is a
wilful act. The true seat of the fraud
is in the mind of the actor. A
fraudulent act is an act done with the intent and purpose of fraud. There cannot be sufficient proof of fraud
without proof of fraudulent purpose.
There cannot be relevant averment of fraud with averment of such facts
as bring out a fraudulent purpose ...".
[30] In this particular case the pursuers' position seems to be that
they are offering to prove as fraud the defender's failure to disclose the role
to be played by Kinnaird Homes (West Kilbride) Limited as the true developer of
the site in partnership with Miller Homes.
The critical question therefore comes to be whether the pursuers have
made sufficient averments on partial non disclosure. The passage I have just quoted in paragraph
[29] from the opinion of Lord Ardmillan shows that when fraud is relied
upon there must be proof of fraudulent purpose.
However that does not mean that there has to be a direct lie and in the
quotation taken from Lord McNaughton referred to in R v Kylsant "sometimes
half a truth is no better than a downright falsehood" (page 446). In a given context the suppression of the
true position can be as devastating in effect as a direct lie.
[31] At this stage, I cannot conclude that the pursuers must
necessarily fail at proof. They are
offering to prove that the defender deliberately withheld critical information
so as to induce them to enter into a contract with a company that was no more
than a shell and ultimately unable to pay its debts. I agree with Mr Webster that the
pursuers' acceptance that in fact Kinnaird Homes Limited had made payments to
them in the region of г250,000 sits rather uncomfortably with the
averments that Kinnaird Homes Limited was a shell company, but standing the
pursuers' averments as to the actual source of those funds, I do not consider
that that is fatal to the pursuers' position.
Mr Webster in his reply to the pursuers' submissions argued that in
a case of partial non disclosure there had to be a duty to disclose before a
case based on fraud could be relevant. Certainly,
as a general rule it is the case that non-disclosure does not constitute a
misrepresentation unless there is a fiduciary relationship between the parties
or the contract is one, for example an insurance contract, which is a contract uberrimae fidei. However, in this case the thrust of the pursuers'
case can be understood to be one where the non-disclosure of essential facts
rendered what was actually said false.
In the circumstances I do not consider that I can conclude at this stage
that the pursuers will necessarily fail in their case based on fraudulent
misrepresentation.
[32] Nor do I consider that use of language such as "materially
misleading" to describe what is alleged to have been said by the defender is
fatal to the pursuer's case. Fraud is an
intentional delict and, as is clear from what was said by Lord Ardmillan, the
pursuers require to prove mens rea. It seems to me that the pursuers' averments
as set out in paragraph [8] are sufficient for that purpose.
[33] Mr Webster also attacked the pursuers' averments on
causation as contradictory. However
Mr Stuart's explanation for the formulation adopted (see paragraph [21])
satisfies me that these averments should be allowed to go to proof even
although it does seem somewhat odd that the representation that Kinnaird Homes
Limited has developing the site is not said to be causative. However, the essential thrust of the
pursuers' case on causation is that it was the combination of the
representations made to the effect that Kinnaird Homes Limited were the actual
developers with the financial backing of Miller Homes that induced the
contract, and, in the circumstances, I consider that adequate notice of the
position has been given to the defender.
[34] Insofar as Mr Webster's second proposition is concerned to
the effect that the averments I have mentioned at paragraph [17] make
reference to "a purported" contract between Kinnaird Homes Limited and Kinnaird
Homes (West Kilbride) Limited, I am not inclined at this stage to exclude these
averments from probation. In the context
of the pursuers' pleadings, and as Mr Stuart maintained, this language is
used to underline the pursuers' contention that Kinnaird Homes Limited was
merely a Shell company with no meaningful role to play.
[35] The final proposition advanced by Mr Webster was that the
loss sought by the pursuers was too remote.
Certainly, Mr Webster is perfectly correct in saying that but for
Kinnaird Homes Limited's impecuniosity the pursuers would have suffered no loss,
but in the context of the pursuers' case on record that impecuniosity is but a
feature of the fraud perpetrated by the defender. I would not therefore have been prepared to
exclude the averments of loss from probation for that reason. However, as I have indicated in
paragraph [26], in the course of the pursuers' reply, and having had his
attention drawn to paragraph 6‑049 in Chitty on Contracts (29th edition), volume 1, Mr Stuart
accepted that he did require to amend the pleadings particularly in relation to
that part of the claim seeking to recover loss of profit. As set out in that particular passage,
damages for fraud are not the same as damages for breach of contract. Such damages are designed to place the
innocent party in a position which he would have been in had the fraudulent
misrepresentation not been made, and not to place the innocent party in the
position he would have been in if the representation had in fact been
true. It does seem to follow that a
claim for loss of profit such as the pursuers conclude for in the second
conclusion may not be a relevant head of loss.
Mr Webster had not attacked the loss of profit claim specifically
in his initial submissions, but as I have already indicated, when he replied he
did invite me to refuse the pursuers' second conclusion at this stage. However, it seems to me that in light of the
manner in which the relevance of the loss of profit claim became focussed in
argument, rather than refusing the second conclusion at this stage, I should
allow the pursuers the opportunity to amend - as indeed Mr Stuart indicated
he would require to do.
Conclusion
[36] In the circumstances I propose
to allow a proof before answer with all pleas standing. I also propose to put the case out by order
so that I can be addressed on the position with regard to the conclusion for
loss of profits as that may have a bearing on the issue of expenses. Accordingly, I propose to reserve expenses
meantime.
