Scottish Court of Session Decisions

INNER HOUSE, COURT OF SESSION
	[2013] CSIH 112
P153/01	OPINION OF LADY CLARK OF CALTON in the cause JAMES DUFF Petitioner and Reclaimer; For an order under section 82 of the Bankruptcy (Scotland) Act 1913 ________________

Petitioner and Reclaimer: Party

Respondent: Paterson; bto

18 December 2013

Introduction

[1] On 27 May 1976 the petitioner was sequestrated under the provisions of the Bankruptcy (Scotland) Act 1913. In the petition originally presented in January 1987, the petitioner sought an order requiring the trustee in bankruptcy to account for his intromissions and management of the bankrupt estate in relation to claims presented in sequestration by AJ Little & Son and JL Robertson (Dumfries) Ltd. Following a hearing in June 2013 the Lord Ordinary dismissed the petition for the reasons given in his opinion dated 25 June 2013. The petitioner thereafter reclaimed the interlocutor of the Lord Ordinary and lodged grounds of appeal (53 of process). Answers were lodged for the respondents (54 of process). Parties produced written notes of argument (55 and 56 of process).

The reclaiming motion: procedural hearing

[2] In the course of the procedure relating to the reclaiming motion, there were various procedural hearings. On 28 November 2013, there was a procedural hearing before me in which a number of motions had been enrolled for consideration by the court. There were two motions enrolled on behalf of the reclaimer. The first motion moved the court to order the respondent's agents to produce a copy of the insurance policy and conditions and to name the insurer paying the fees for the respondent. The second motion sought dispensation of the normal rule and sought to include two extra case authorities, that is 12 case authorities instead of 10.

[3] There was also a motion, continued from an earlier hearing, which was enrolled on behalf of the respondent. This motion stated:

"In respect that the pursuer/reclaimer appears likely to be unwilling or unable to pay the defender/respondent's expenses in the event of the defender/respondent being successful, to order the pursuer/reclaimer to find caution in the sum of ten thousand pounds (£10,000) sterling or such other sum as the court sees sufficient as a condition precedent for continuation of his reclaiming action, on the basis that the pursuer/reclaimer's grounds of appeal fail to specify a sound basis upon which to challenge the Lord Ordinary's judgement; that the pursuer/reclaimer has failed to meet or make any proposals in respect of any awards or expenses made against him both in this action and in previous proceedings involving the defender/respondent; and that the pursuer/reclaimer was most recently sequestrated in October 2012 and has been declared a vexatious litigant leading the defender/respondent to believe that the pursuer/reclaimer will be unwilling or unable to meet any expenses that would be awarded against him in respect of this appeal."

Counsel for the respondent corrected the motion at the Bar by explaining the most recent date for sequestration was 2011 not 2012. I considered that I should first decide the motion for caution in advance of the other two motions as this was the logical approach and would minimise court time and expense.

Summary of submissions

[4] Counsel for the respondent lodged a detailed written submission which had been given in advance to the reclaimer (58 of process). The reclaimer in the course of his submissions lodged written submission (59 of process). As the parties founded upon their respective written submissions, it is unnecessary to set these out in detail.

Submissions by counsel for the respondent in support of the motion for caution

[5] Counsel for the respondent moved the motion for caution and supplemented his written submissions under reference to three main chapters. The first chapter summarised in some detail the history of the litigation which resulted in the reclaiming motion. This history is set out in the opinion of Lord Ordinary which is the subject of the reclaiming motion. In his second chapter, counsel under reference to Macfadyen, Court of Session Practice L/40 ‑ L/410, submitted that an order for caution is a matter for the discretion of the court and that there are reasonably well established circumstances which dictate the general manner in which the discretion should be exercised. The overriding consideration is the interests of justice. In referring to some of the well‑established circumstances, counsel submitted that the reclaimer has demonstrated that he cannot and will not pay expenses in other proceedings raised by him against the respondent. Under reference to Stevenson v Midlothian District Council 1983 SC (HL) 50 and Rush v Fife Regional Council 1985 SLT 451, counsel submitted that this was a case in which one could reasonably conclude that the reclaimer was impecunious. If the reclaimer was not impecunious, his behaviour in the many litigations and his attitude to expenses was unreasonable. Counsel referred to the opinion of the court in another litigation concerning the reclaimer namely HM Advocate v James Duff [2013] CSIH 50 paragraph 57. In that action there is a reference to a long history of numerous court actions raised by the reclaimer. Having considered the circumstances and history, the court granted an order in respect of Mr Duff, the reclaimer in the present motion, under the Vexatious Actions (Scotland) Act 1898. Under reference to Rush v Fife Regional Council 1985 SLT 451, counsel submitted that the court in considering the motion for caution was entitled to take into account unreasonable behaviour of the type highlighted by the court in HM Advocate v James Duff [2013] CSIH 50 at paragraph 57. Counsel also prayed in aid Ewing v Times Newspapers Ltd 2010 SLT 1093 in particular paragraph 16 - 18. In his third chapter, counsel summarised the reasons which he prayed in aid for the grant of the motion. The two main reasons founded upon were that the reclaimer cannot or will not pay any expenses awarded to the respondent in the event that the respondent is successful and that there is no merit in the grounds of appeal.

Submissions made by the reclaimer to oppose the motion for caution

[6] The reclaimer read out his written submissions. He prayed in aid Martin v Scottish Transport and General Workers Union 1952 S.C. 92. He submitted that case supported his submission that it would be improper for the court to pronounce an order for caution at this stage, where the appeal had not been heard and therefor the motion for caution should be refused. He submitted that he had a sound or reasoned basis upon which to challenge the Lord Ordinary's opinion. He also set out some background information in paragraphs 5 - 8 of his written submission which he submitted bore upon some of the history of the litigations and expenses. He submitted that he is actively involved in making a new application to the court for permission to appeal to the Supreme Court in one of the cases. I understood him to be making the points that some of the issues in past litigations are still therefore to be resolved and that, even as a vexatious litigant, he was not completely prohibited from litigation. He submitted that his failure to pay expenses in other actions was not a relevant consideration. The litigations had a complicated history. He also prayed in aid Cooney v Kirkpatrick 1989 S.C. 61. He submitted that case assisted him as an example of the court exercising its discretion to refuse caution.

[7] In response to questions by the court, the reclaimer accepted that, in the event that he was unsuccessful in his reclaiming motion, and expenses were awarded against him in favour of the respondent, he would have great difficulty in paying these expenses. He could give no assurance that such expenses could or would be paid. He explained this in the context of his general submissions which he had made about the losses which he had suffered as a result of alleged wrongdoing which had been reflected in various actions which he had raised and the many difficulties which he claimed to have had in trying to obtain a legal remedy. I understood that because of the history, he was opposed to caution in principle.

Discussion

[8] In considering the motion for caution made on behalf of the respondent, I am very conscious that this may have important consequences and, if caution is granted and the reclaimer is unable to lodge caution, this will have the result of preventing the reclaimer from pursuing his reclaiming motion. Although no Convention point was raised by the reclaimer, I have in mind the discussion about article 6 of the European Convention on Human Rights by the then Lord Justice Clerk (Gill) in paragraphs 10 and 11 in Ewing. I am satisfied that in the circumstances of this case, I am entitled to proceed on the basis that the grant or otherwise of caution is within my discretion. I fully accept that impecuniosity of the reclaimer by itself cannot justify the grant of this motion. I consider that the submissions made on behalf of the respondent go well beyond mere impecuniosity of the reclaimer.

[9] The case of Martin relied on by the reclaimer was not concerned with caution. The case dealt with the issue of whether expenses should be granted by the Inner House in circumstances where an appeal had been made to the House of Lords. I do not consider that this case assists the reclaimer. The case of Cooney does deal with the issue of caution for expenses in circumstances in which the pursuer, who was an undischarged bankrupt, had an order under the Vexatious Actions (Scotland) Act 1989 passed against him. It is not in dispute that such a person is not totally prohibited from raising further actions and may do so in certain circumstances with leave of the court. The pursuer in Cooney was granted such leave by the judge in chambers. In considering caution, the court held that since the vacation judge had granted the pursuer's application to raise an initial writ, it must be assumed that the vacation judge was satisfied that the action was not vexatious and that the pursuer had a prima facie case. In these special circumstances, which do not apply in this case, the court concluded that the sheriff had wrongly exercised his discretion in concluding that the pursuer as an undischarged bankrupt should be required to find caution for expenses.

[10] I consider that Cooney does illustrate that it is important for the court to look at the interests of justice in the round and to consider all the circumstances of the case. The mere fact that a person is an undischarged bankrupt and/or vexatious litigant may or may not justify an order for caution. Such factors, however, may be very relevant to the decision.

[11] In the present case, the order in 2013 relating to the reclaimer under the Vexatious Actions (Scotland) Act 1989 post-dated the raising of the present action and does not prevent the reclaimer pursuing the action. That may be regarded as an understatement. The present action was raised by petition presented in January 1987. A minute of amendment was allowed in 1993 but no amendment was ever sought and the action was not pursued for many years. The issues in the petition were eventually determined by the Lord Ordinary on 25 June 2013. The present action is one of many actions which the reclaimer considered arose out of claims directly or indirectly relating to events which followed his sequestration on 27 May 1976. The history of some of the actions is set out by the Lord Ordinary in his opinion of 25 June 2013. A more detailed history of litigation pursued by the reclaimer is set out in the opinion of the court in HM Advocate v James Duff. That litigation resulted in the order against the respondent under the Vexatious Actions (Scotland) Act 1898. I see no merit in trying to chart again the many and varied litigations. In HM Advocate v James Duff, Lady Paton delivering the opinion of the court in paragraph 57 stated:

"In this petition, the respondent is noted as having raised actions against inter alios the Lord Advocate, the Chief Constable of Dumfries and Galloway Constabulary, a former trustee in sequestration, and a local authority (Dumfries and Galloway Council). In these actions the respondent has made repeated allegations of corruption, fraud, blackmail, pressure, collusion, fabricated police reports, police officers perverting the course of justice, a cover-up, a vendetta against him, and conspiracies. The actions and ensuing appeals have been dismissed and awards of expenses made against the respondent. The respondent's reaction has been to fail to pay any expenses; to leave some actions in a procedural limbo; and in several instances to reactivate old proceedings or to raise another action against the same defender in broadly similar terms as a previously unsuccessful action. Considerable time, funds, and resources have been devoted to dealing with the respondent's wholly unsuccessful actions. In our opinion, the circumstances of the litigations confirm and support the petitioner's contention that the respondent is indeed a vexatious litigant."

[12] Taking into account the history, I consider that the respondent is well justified in his concerns that the reclaimer will not pay expenses, if awarded, in this reclaiming motion. Nothing that was said by the reclaimer in court to me could be considered as mitigating these concerns. In my opinion it is also appropriate to consider the merits of the appeal grounds put forward by the reclaimer and his note of argument in support thereof. There are a number of issues addressed by the Lord Ordinary in his opinion dated 25 June 2013. It does not appear to be disputed that on 10 March 1993 an order was made exonerating and discharging the trustee "of his whole actings, intromissions and management as trustee of the sequestrated estates". A reclaiming motion was refused and the opinion of the court was delivered by Lord Clyde and reported as Duff's Trustee, petitioner 1993 SC 466. The discharge has not been reduced. I can see nothing in the appeal grounds and submissions on behalf of the reclaimer to focus any legal argument to try to overcome what appears to be at least one fundamental problem for the reclaimer. Indeed I cannot identify any stateable or even arguable grounds of appeal.

[13] I consider that the submissions made by counsel on behalf of the respondent are well founded and I am prepared to grant his motion for caution as I consider that is required in the interests of justice. The reclaimer obviously considers that he has many grievances and he chooses to continue to litigate as he has done for many years. I do not expect the reclaimer to be persuaded by my opinion about the merits of his reclaiming motion. Albeit the reclaimer is entitled to continue the present litigation, I am of the opinion that in all the circumstances he is not entitled to do so with the likely result of leaving the respondent with unpaid expenses, if the reclaimer is unsuccessful as I consider he is likely to be. In these circumstances I consider that an order for caution is both appropriate and proportionate in the interests of justice and will help to protect the interests of the respondent.

The amount of caution

[14] Counsel for the respondent sought caution in the sum of £10,000 sterling. He explained that this was the "best estimate" which could be made of the likely expenses if the reclaiming motion proceeded to a hearing of one day. The reclaimer did not have an alternative submission seeking a lesser claim of caution albeit I explored that possibility with him. He did not suggest a lower sum which he might be capable of raising. His opposition was in principle to any caution. In all the circumstances I think it is appropriate to bear in mind that this is a general estimate of expenses. The protection to be afforded to the respondent in my opinion should be balanced by keeping the potential barrier to litigation to a reasonable level. I consider that the sum sought as caution in this case is reasonable and should be ordered.

[15] I grant the motion of the respondent and order the reclaimer to find caution in the sum of £10,000 as set out in the interlocutor. I reserve the question of expenses in respect of the hearing before me. The case will be put out by order to deal with expenses and any further procedure required if the reclaimer finds caution in terms of the interlocutor. That further procedure would include, if appropriate, a hearing in relation to the two motions by the reclaimer.