EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lady Paton Lord Mackay of Drumadoon Lord Philip	[2013] CSIH 21 XA73/12 OPINION OF THE COURT delivered by LADY PATON in the cause NORTHERN HYDROSEEDING LIMITED Pursuers and Respondents; against JAMES McDONALD Defender and Appellant: _______________

Pursuers and Respondents: J D Campbell QC; DAC Beachcroft Scotland LLP

Defender and Appellant: Party

22 March 2013

Introduction

[1] The defender occupied a petrol filling station owned by the pursuers for a period from November 2006 until his eviction on 15 April 2010. He made payments to the pursuers during 2007, all as detailed in Sheriff Mundy's opinion dated 28 February 2012. The sheriff attributed a total of £107,325 to the occupation of the subjects.

[2] In October 2007 the defender stopped making payments. He nevertheless continued to occupy the premises. In August 2008 the pursuers raised a sheriff court action seeking eviction and also violent profits. They averred that the defender's occupation was unlawful. The defender's response was that Mr Snowie, a director of the pursuers, had agreed that he should buy the premises at a price of £750,000, payable by instalments. He attributed the payments to that agreement.

[3] On 5 February 2010, Sheriff Gilchrist heard a motion for summary decree for the defender's eviction and for a warrant to eject the defender from the subjects. Having taken the case to avizandum, he issued an opinion and a decree granting summary warrant to eject the defender. He found that there were no completed missives of sale, and no concluded agreement or contract for sale. While a document of lease had been signed, the tenant was "the Motor Vehicle Protection Association Limited" - a company which did not exist. The pursuers' position was that the lease was void because there was no tenant. The defender's case was that he was purchasing the filling station by instalments, not leasing it. Neither party founded upon the document of lease.

[4] The defender was duly evicted on 15 April 2010. A proof before answer on the issue of violent profits took place before Sheriff Mundy on 29 August 2011. The pursuers' witnesses were an accountant (Mr Grant) and a surveyor (Mr Campbell). After some evidence, the pursuers sought to amend their pleadings by deleting violent profits and substituting averments seeking damages on the basis that the pursuer had purported to pay certain sums by way of rent, but had ceased to make payments. Sheriff Mundy ultimately ruled that an amendment could be made, but not at the bar. The pursuers were ordered to produce a written minute of amendment which the defender would have an opportunity to answer. The proof diet was continued to 5 December 2011.

[5] On 13 September 2011 the pursuers duly lodged a minute of amendment reflecting the above changes. The sheriff permitted the pleadings to be amended, despite the defender's opposition. An averment that "[a] total of £107,325 was paid by the defender to the pursuers, purportedly for rent" was inserted. Instead of violent profits of £265,925, the pursuers sought damages of £47,550 for their loss during the period of the defender's occupation without payment. A "final amended Closed Record" incorporating those amendments (pages 88-92 of the Appendix) was lodged on the second and last day of the proof on 5 December 2011.

[6] On 28 February 2012 Sheriff Mundy issued a judgment finding the defender liable to the pursuers in damages of £37,050. In his opinion, he stated inter alia:

"[24] As to quantum of damages, it is appropriate to assess these on the basis of what the pursuers would have obtained by way of rent had they been let to a third party over the period of the defender's unlawful occupation less any money paid which can be attributed to the occupation. The pursuers have selected, both in averment and argument, 26 January 2007 as a starting point from which to calculate the period of loss. I see no objection to this in principle. This was the date the document of lease was signed and so is indicative on the face of it of an intention to put the defender's occupation on a proper footing by way of a let. I accept as credible and reliable Mr Campbell's [the surveyor's] evidence (which was not disputed on these points) as to the timescale of successful renting the subjects and the rent that would have been achieved. Erring on the cautious side, I think it reasonable to assess a likely tenant being found and in place towards the end of the three to six month estimate, say 15 July 2007. The period of loss between 15 July 2007 and 15 April 2010 is 2 years and 9 months. I accept as credible and reliable the evidence of Mr Grant [the accountant] as to the payments made to the pursuers. He spoke to documents vouching what had been paid and I had no reason to doubt his evidence on the matter. I do not accept as credible or reliable the defender's contention that further payments were made. He produced no vouching. He had plenty of time to do so and would have appreciated the need at the very latest following the evidence of Mr Grant on the first day of the proof.

[25] As regards payments made by the defender, to add back the sum of £2,396.51 as suggested on behalf of the pursuers would in my view appear to be double counting as that sum is included in the total payment of £32,964.26 for fuel - that comprising two payments - one of £30,567.75 and £2,396.51. The total paid is therefore £107,325 rather than £109,722.

[26] On the foregoing basis, I assess damages as follows:

£52,500 (annual rent) x 2 = £105,000 + £39,375 (9 months) = £144,375

less £107,325 (sums paid) = £37,050

Accordingly, I have found damages in the sum of £37,050 to which I have added interest from the date of decree at the court rate as sought in the crave."

[7] The defender appealed to the Court of Session.

The Grounds of Appeal

[8] The defender's grounds of appeal are as follows:

"1. That the sheriff erred in law by allowing an amendment on the second day of the proof that altered the object of the case to be changed from the stated object in the record that was present on the first day of the proof. Reference is made to paragraph 1. of the Sheriff's note on page 6 of the Sheriff's Judgment [which states: 'At the outset of the proof the pursuers were seeking decree for payment of £265,925 in name of violent profits. As shall be seen, after the conclusion of the first day of proof and after sundry procedure, the pursuers amended the claim to one of damages and that in the sum of £47,550, the amendment being given effect to at the beginning of the second and final day of proof on 5 December.']

2. That the several amendments allowed by the pursuer contradicted the pursuers argument at the debate before Sheriff Gilchrist who granted a summary decree of ejection on the basis that the appellant occupied the property in bad faith. Reference is made to paragraph 8 on page 9 of the Sheriff's Judgment 'bad faith no longer being alleged'. Had Sheriff Gilchrist known the pursuers position had changed he would not have granted a summary decree. Accordingly the appellant seeks reduction of the Interlocutor and decree granted by Sheriff Gilchrist.

3. That the Sheriff exceeded his jurisdiction by attributing the sum of money paid between January 2007 and October 2007 as rent in advance for 2008, 2009 and 2010 as this would render this action as raised incompetent considering that this action was raised in 2008 and makes his decision irrational. In any event it was never submitted by the pursuer that it was advance rent.

4. That the appellant did amend his pleadings in the Sheriff court on 31 December 2008 which were lodged by the pursuer and certified as being part of the Closed Record and considering that it is the duty of the pursuer to incorporate into the pleading answers that are within their knowledge on their minute of amendment it ought not to have been held against the appellant by both Sheriff Gilchrist and Sheriff Mundy. Reference is made to the Court File for the certified copy lodged by the pursuer dated 14^th August 2009.

5. That the evidence given by the appellant was not challenged by the pursuer in any way whatsoever as to the agreement made between the appellant and the named Euan Snowie which by operation of sections 4 and 5 of the Requirements of Writing (Scotland) Act 1995 purified the written Holographed missives accordingly the Sheriff misdirected himself in Law in not considering that failure to challenge material evidence that was central to the whole case the pursuer accepted that evidence as true."

Discussion

The first ground of appeal

[9] Amendment of pleadings in order properly to focus the issues between the parties is permissible at the discretion of the presiding sheriff at any time before final judgment (Ordinary Cause Rules rule 18.2). Whether a sheriff has erred in the exercise of his discretion must be assessed in the circumstances of each particular case.

[10] There are cases in which an amendment sought by the pursuers in the course of a proof should not, in the particular circumstances, be allowed. However in the present case the amendment reflected evidence already led by the pursuers, acknowledged that payments totalling £107,325 had been made by the defender, focused more clearly the issues between the parties, deleted averments relating to violent profits, substituted averments relating to damages, and reduced the sum sued for from £265,925 to £47,550. None of these features could, in our opinion, be regarded as prejudicial to the defender. Moreover a formal minute of amendment was ordered, thus enabling the defender to take time for consideration, to seek legal advice if desired, and to answer the amendment if so advised. In fact the defender chose not to seek legal advice or to lodge answers. The pursuers were ordered to bear the costs of the whole amendment procedure. In these circumstances it cannot in our view be said that the sheriff erred in the exercise of his discretion in allowing the amendment. We are not therefore persuaded that the first ground of appeal should be sustained.

The second ground of appeal

[11] In our opinion, the fundamental issue was the lack of any legal title justifying the defender's continued occupation of the filling station. In order to assess the merits of the motion for summary decree for eviction and for a warrant to eject the defender, the sheriff had to examine the defence made out by the defender to ascertain whether there was a relevant case of some legal title justifying his continuing occupation: cf the guidance given by Lord Rodger in Henderson v 3052775 Nova Scotia Ltd 2006 SC (HL) 85:

"[16] The test of the relevancy of a defender's averments must mirror the test of the relevancy of a pursuer's averments. That test was laid down by the House in Jamieson v Jamieson. Lord Normand said (page 50) that the test of relevance is the same for all actions: 'The true proposition is that an action will not be dismissed as irrelevant unless it must necessarily fail even if all the pursuer's averments are proved.' Similarly, Lord Reid said (page 63) that: 'If it can be shown that, even if the pursuer succeeds in proving all that he avers, still his case must fail, it appears to me to be highly advantageous that time and money should not be spent on fruitless inquiry into the facts.' Similarly, defences will not be dismissed as irrelevant unless they must necessarily fail even if all the defender's averments are proved. So a pursuer may be granted summary decree on the ground that the defences are irrelevant if the judge can be satisfied, without the need for prolonged legal debate, that there is no defence to the whole or part of the action because, even if the defender succeeds in proving all that he avers, still his case must fail".

Sheriff Gilchrist examined the defences, and could find no relevant defence. In other words, the defences disclosed no reason in law justifying the defender's continued occupation of the filling station. That state of affairs was not altered by the pursuers' amendments to their pleadings (cf Sheriff Mundy's observations at paragraphs [22] and [23] of his opinion). The second ground of appeal is in our view without merit.

The third ground of appeal

[12] Once the pursuers' pleadings were amended, Sheriff Mundy had to assess damages on the basis of the loss suffered by the pursuers as a result of the defender's continued occupation of the filling station without making any payment for that occupation. The sheriff measured that loss as noted in paragraph [6] above.

[13] In our opinion, that was a reasonable approach to quantification of loss. The sheriff did not exceed his jurisdiction in carrying out those calculations on the basis of the amended pleadings. Nor did his approach render the amended action incompetent. Nor is the sheriff's decision irrational. The third ground of appeal is therefore in our opinion without merit.

The fourth ground of appeal

[14] We accept that answers (lodged by the defender in December 2008 in response to an earlier minute of amendment by the pursuers) appear not to have been included in the print of the closed record. The relevant interlocutor on 6 February 2009 allowing the amendment referred only to the minute of amendment and not to the answers. No reason has been identified for this apparent oversight. Nevertheless both Sheriff Gilchrist and Sheriff Mundy took those answers into account (see Sheriff Gilchrist's opinion pages 9 to 13; Sheriff Mundy's opinion paragraphs [3], [12], and [17] to [19]). Accordingly we are satisfied that the averments contained in the answers for the defender were taken into account by the sheriffs, even if not incorporated in the closed record. It follows that the fourth ground of appeal fails.

The fifth ground of appeal

[15] The defender submitted that the lawyer acting for the pursuers did not challenge the defender's evidence to the effect that Mr Snowie, a director of the pursuers, had agreed with the defender that the defender should purchase the filling station by instalment payments. The only questions put by the pursuers' lawyer in cross-examination of the defender were two in number, namely whether the defender had been in prison, and what he had been there for. The defender submitted that his previous record was irrelevant. The important point was that there had been no challenge to his evidence in chief to the effect that Mr Snowie and the defender had reached an agreement that the defender should purchase the filling station by instalment payments. The agreement had then been followed by the actings of the parties such that a binding contract relating to the filling station had been constituted. In view of the lack of challenge in cross-examination, the defender's evidence should have been treated as being accepted as true by the pursuers. Accordingly the sheriff erred in not so finding.

[16] We are unable to accept this argument. The assessment of credibility and reliability, and the ultimate decision about what has been established as matters of fact, are for the sheriff, taking into account not only the evidence given by witnesses and the extent to which they have been cross-examined, but all the circumstances of the case including productions, correspondence, documents, the timing of events, payments made and the circumstances of those payments, and other matters. It is not mandatory that disputed matters be put to a witness in cross-examination, although failure to do so may affect the sheriff's assessment of the case and the weight which he gives to certain evidence. Accordingly we do not accept that the sheriff misdirected himself in law as submitted in the fifth ground of appeal.

[17] The defender's note of argument lodged on 15 August 2012 extended to six paragraphs. However a copy of that Note included at pages 124 to 125 of the defender's folder "Fresh Appeal Print" (in effect an Appendix) extended to seven paragraphs. The additional paragraph was in the following terms:

"That the director Euan Snowie was on the list of witnesses lodged with the court by the pursuers and not called by them, the appellant was not allowed to call him as a material witness, the sheriff had before him an affidavit by Euan Snowie that was lodged in the process. The appellant submits that without the evidence of Euan Snowie there was no evidence before the court that would have entitled the sheriff to conclude as he did."

[18] The defender duly addressed the court on this point. He explained that he had been pleased to see Mr Snowie in the court building, as he wished to put various questions to him, including challenging the position adopted in his affidavit that the sale of the filling station had fallen through, and that the defender's occupation was as a purported tenant. However the pursuers had not led Mr Snowie in evidence. When the defender came to give evidence, Mr Snowie had left the court premises. During the appeal before us, the defender acknowledged that it was not that he had not been "allowed" to call Mr Snowie; rather he (the defender) had failed to cite Mr Snowie.

[19] In our opinion, if the defender wished to lead evidence from Mr Snowie, he should have cited him as a witness. If the defender chose not to cite Mr Snowie, that was a matter for him.

Decision

[20] In the result, for the reasons given above, we refuse the appeal, and adhere to the interlocutors of the sheriffs dated 4 March 2010 (Sheriff Gilchrist) and 28 February 2012 (Sheriff Mundy).