Scottish Court of Session Decisions

 

OUTER HOUSE, COURT OF SESSION

[2014] CSOH 173

 

PD253/14

OPINION OF LORD BOYD OF DUNCANSBY

In the cause

ROBERT MORAN

Pursuer;

against

FREYSSINET LIMITED

Defenders:

Pursuer:  Wilson;  Digby Brown LLP

Defender:  Henderson;  DWF LLP

5 November 2014

[1]        This is a personal injuries action under chapter 43.  The case called before me for proof.  A number of motions were made at the start of the case which I considered overnight.  On the following day I refused the defenders motion to vary the timetable to allow for the lodging of a statement of valuation by the defenders.  I granted the pursuer’s motion, under reference to the sanctions in RC 43.9.7(b) to grant decree restricted to the sum of £30,000.  I indicated that I would give my reasons in writing.

The pleadings

[2]        The pursuer avers that on 10 May 1999 he commenced employment as a joiner with a company called Accrete Limited.  In about 2002/2003 it was taken over by Makers UK Limited. They in turn were taken over by the defenders in about 2008.  The pursuer’s employment was transferred to the defenders in terms of the Transfer of Undertakings (Protection of Employment) Regulations 2006.  These averments are denied.

[3]        The pursuer further avers that until his appointment as a project manager in about 2006/2007 in the course of his employment with the defenders the pursuer was required to operate and use vibratory tools and machinery. There are averments as to the extent of their use and that the tools emitted excessive vibration.  It is averred that he was not advised or alerted to the risk of vibrating tools or the risk of developing hand arm vibrating system (HAVS).  There are further averments regarding the defenders alleged failure to instruct employees to limit the use of vibrating tools and failure to make a risk assessment.  If there were risk assessments, as the pursuer avers is required in terms of the regulation 3 of the Management of Health and Safety at Work Regulations 1992 and regulation 5 of the Control of Vibration at Work Regulations 2005, the defenders are called upon to produce such risk assessments.  The pursuer avers that the defenders should have known about the risk of injury and that they negligently exposed the pursuer to excessive amounts of vibration from the use of tools and machinery.  As a result it is averred that the pursuer developed HAVS in the course of his employment with the defenders.

[4]        The defenders aver that the circumstances of any incident condescended upon are not known and not admitted. They then explain and aver that the defenders did not employ the pursuer in any position which would have exposed him to tools which would have caused HAVS.

[5]        Mr Wilson for the pursuer moved a minute of amendment, not opposed by Mr Henderson, to make it clear that the allegations of fault were against the present defenders’ predecessors, namely Accrete Limited and Makers UK Limited.  That was no doubt prudent but I have to say from my reading of the pleadings that was always clear;  the pursuer avers that his exposure to vibrating tools occurred up until his appointment as a project manager in about 2006/2007.  The present defenders took over Makers UK Limited on 10 October 2007.  I assumed when I read the pleadings before the proof that the pursuer used the word “defenders” to include the predecessors.  Mr Henderson in the course of submissions tentatively suggested that the defenders were entitled to assume that there was no case against them.  I did not understand him to insist in this argument.

[6]        The pursuer makes averments of loss which are met with a standard not known and not admitted.

[7]        The averments of fault narrate a breach of both common law and statutory duty. The answers refer to the statutes beyond which no admission is made.  Otherwise the averments are denied.  There is then a plea that the action is barred by the passage of time.  Reference is made to the section 17 of the Prescription and Limitation (Scotland) Act 1973.  The pursuer met that averment with an averment that the pursuer first attended his general practitioner with problems with his fingers on about 11 July 2001 at which time he was referred to Ninewells Hospital, Dundee.  The pursuer then invokes section 19A to the effect that in any event it would be equitable to allow the pursuer to bring the present action.  In the minute of amendment, referred to above, the pursuer added that he was unaware that any problems with his hands were work related until he attended his general practitioner and was referred to a specialist.

 

 

The progress of the case

[8]        The summons was signetted on 10 February 2014 and served on the defenders on about 11 February.  Defences were lodged in skeletal form.  A timetable was issued under RC 43.6.  On 28 April the court granted a motion at the instance of the defenders to sist the cause for 3 months and to vary the timetable accordingly.  The reasons given were for investigations into the insurance cover for the previous employers Accrete Ltd and Makers UK Ltd and to make general investigations including the pursuer’s medical condition.  So far as the timetable is concerned the proof date remained 4 November.  The defenders’ valuation was to be lodged by 2 October.  Productions and lists of witnesses were to be lodged by 16 October and the pre-trial minute by 23 October.

[9]        The defences remained in skeletal form.  On 8 September the pursuer lodged a Notice to Admit 7 specified facts. The defenders responded with a Notice of Non-Admission which in effect admitted 3 of these matters.  I will return to this later.

[10]      On 3 October the defenders lodged a minute of amendment which added the time bar plea under section 17.  That was answered and adjustments were made to both.  On 22 October, the day before the pre-trial minute was due to be lodged the pursuer’s agents enrolled a motion, granted by the court, to vary the timetable to allow the pre-trial minute to be lodged by 30 October.  The reason given was that the pursuer’s agents had requested from the defenders’ agents suitable times for a meeting but no response was received.  The pre-trial minute was subsequently lodged on 28 October.

[11]      On 29 October the defenders enrolled a motion to allow the record to be amended in terms of the minute of amendment and answers and to discharge the proof.  No reason is given in the motion sheet but the motion was heard by Lord McEwan on 30 October.  He granted the first part of the motion but refused to discharge the proof.  The minute of proceedings notes that the three issues discussed, time bar, liability and quantum can be addressed at the proof.

[12]      At the proof the defenders had not lodged any productions or intimated a list of witnesses.  Mr Henderson attempted to vary the timetable to have a summons in another action at instance of the pursuer and directed against Makers UK limited and another lodged as a production. This was opposed. I was informed that its purpose was for the cross examination of the pursuer but Mr Henderson was unable to elaborate on the point that he hoped to make with it.  I was not satisfied with the explanation for its late production and refused the motion.

 

Motions for Pursuer

[13]      Mr Wilson for the pursuer moved me, first, to grant summary decree and to limit the proof to matters of quantum and time bar.  However in the course of making submissions he referred to the fact that the defenders had not lodged a statement of valuation as they are required to do under RC 43.9.  He referred to the sanctions which the court could impose under RC 43.9(7) which includes at (b) granting decree against the defender for a sum not exceeding the amount of the pursuer’s valuation.  As the valuation exceeds the sum sued for he invited me to grant decree against the defenders limited to that sum i.e. £30,000.  I asked Mr Wilson to clarify his position with regard to the motions.  He then invited me to grant decree under reference to RC 43.9(7) which failing for summary decree with the proof limited to questions of quantum and time bar.

 

Motion for Defenders

[14]      In the course of submissions Mr Henderson moved the court to allow the timetable to be amended in order to allow the late receipt of the defenders’ statement of valuation.

 

Submissions for Pursuer

[15]      In respect of the motion for decree in the sum of £30,000 Mr Wilson submitted that RC 43.9 required each party to submit a statement of valuation. These had to be submitted in terms of a timetable set out by the Keeper in terms of RC 43.6.  No valuation had ever been submitted by the defenders. The sanctions which the court can impose for failure to lodge a statement of valuation are set out in RC 43.9(7).  Although the reference in the Rule is to sanctions available to it at the by order rule hearing under RC 43.7 these sanctions are also available at a proof diet.  Such a diet was brought out by the court “by order”;  it was a peremptory order of the court.  In Smith v Greater Glasgow & Clyde NHS Health Board [2103] CSOH 178 Lord Jones had said that in Quigley v Hart Builders (Edinburgh) Ltd [2006] CSOH 118, there was no mention in the Lord Ordinary’s opinion to his attention having been drawn to the provision of RC 43.7(2) (sanctions at by order hearing) in the context of a motion to allow a defenders’ list of witnesses to be received late.  That reference indicated that Lord Jones considered that a sanction available at a by order hearing could be imposed at a diet of proof.

[16]      Where a defender has failed to lodge a statement of valuation the court may grant decree against the defender for an amount not exceeding the amount of the pursuer’s valuation: RC 43.9(7)(b).  That is stated to be without prejudice to the terms of paragraph (2) of RC 43.7 so these other sanctions were also available to the court.  While he accepted that granting decree for the pursuer’s valuation may seem a harsh motion to make in this case there had been a complete disregard of procedures and no excuse proffered for the failure to lodge a valuation.  There had been no attempt to agree quantum and the pursuer had had to bring his witnesses on quantum, including expert evidence, where there had been no investigation by the defenders of the pursuer’s medical condition.  Coupled with the general state of the pleadings and the conduct of the defenders this was a case where the court should impose the sanction of granting decree.

[17]      The pursuer’s valuation was £58,207.43.  This exceeded the sum sued for and accordingly Mr Wilson restricted the sum sought to £30,000.

[18]      In relation to his motion for summary decree Mr Wilson submitted that in all aspects of the case other than time bar no defence was disclosed. The defenders had engaged in lengthy communications with the insurers acting for the pursuer’s previous employers but little else had been done to advance the progress of the case. The defences remained essentially skeletal and curious in their terms;  he referred me in particular to answers 1, 2 and 3.  In answer 4 the defenders had not even accepted the assumption of liabilities of the previous employers nor the averments relating to transfer of the pursuer’s employment under the Transfer of Undertakings (Protection of Employment) Regulations 2006.  It was not until the service of the Notice to Admit that the defenders had made limited admissions, albeit not on record.

[19]      The defenders had come to proof with no list of witnesses or productions and no valuation of claim for which they had no explanation.  While it would be open to Mr Henderson to cross examine no substantive argument could be advanced.  There was no material before the court to show that there were matters of fact to be investigated.  The court can go beyond what is stated in the defences to  ascertain if there is material to support the defenders’ averments and inquire into the defenders’ capacity to present a genuine defence raising a real issue; temporary Judge Horsburgh QC in Spink & Son Ltd v McColl 1992 SLT 470 at 472 J-K.  Mr Wilson also referred me to the speech of Lord Rodger of Earlsferry in Henderson v 3052775 Nova Scotia Ltd 2006 SC(HL) 85 at paragraphs 15 to 18.  In McGowan v W & JR Watson 2007 SC 272 an Extra Division approved a statement of Lord Glennie in Weir v Robertson Group (Construction) Ltd [2006] CSOH 172 where he said, at paragraph 7 that the defences should aver the facts which the defender regards as necessary to his defence. Otherwise how is the pursuer to know what investigations to make and what evidence to lead?

[20]      There was no defence to the action. There was nothing in the defences to counter the pursuer’s averments.  All that was left was the formal issue of quantification of damages.  As to time bar this was based on the pursuer’s averments and there was nothing to counter the issue of fact. Paragraph 6 of Practice Note 2 of 2014 made it clear that unless there is a good reason such as lack of instructions or lack of access to factual information blanket denials or skeletal defences are not an acceptable starting point in the pleadings and the court will bear that in mind when faced with a motion for summary decree.  The pursuer had made no investigation into the facts or the medical condition of the pursuer.

 

Submissions for Defenders

[21]      Mr Henderson explained that he had only been instructed the previous day.  It was only when he entered the court that he was made aware that there was no statement of valuation.  He had a statement in his papers but it was a nil valuation.  It had been due to be lodged on 2 October but it had been overlooked by the agent as he had been busy with Zurich Insurance who insured the previous employers and dealing with the Notice to Admit.  He did prepare it apparently with a nil valuation with a view to it being discussed with counsel who had been previously instructed.  Counsel had provided a valuation last week but due to an oversight it too had been overlooked.

[22]      Mr Henderson then moved the court to vary the timetable to allow the statement of valuation to be received.  He at first submitted a statement which had a nil valuation against all the heads of claim.  When challenged he submitted that the defenders’ position was that either there was no liability or, if there was, it was time barred.  Accordingly a nil valuation was appropriate.

[23]      Mr Henderson departed from that submission after lunch and presented a fresh valuation which he had prepared over the lunch break.  It showed a total valuation of £10,666.67.  It was based on the pursuer’s medical report, 6/4 of process.

[24]      Mr Henderson submitted that the lack of a valuation from the defenders could and should have been dealt with at a by order hearing.  In terms of RC 43.6(3) provides that where a party fails to comply with any requirement of the timetable the Keeper may put the cause out to be heard on the by order roll.  That had not happened but if it had the defenders would have been alerted to the fact that the valuation had not been lodged (see RC 43.7(1)(b)(ii)) and have an opportunity to rectify the matter.  He submitted that a hearing on preliminary matters at the start of a proof was not a by order hearing.  Accordingly he submitted that the court had no power to grant decree under RC 43.9(7)(b).

Turning to the motion for summary decree the court had to look at whether there was a genuine defence.  It is only if the court is satisfied that there is no defence disclosed that it would be entitled to grant summary decree.  In this case the defenders had not been the pursuer’s employers at the time of the alleged exposure to vibrating tools.  The defenders had attempted to make inquiries through the insurers of the previous employers but had been unable to obtain information that shed any light on the matter.  Accordingly it could not be said that there was no defence.  The defenders were entitled to put the pursuer to his proof.

 

Statements of Valuation

[25]      The Report by Lord Coulsfield’s Working Party on Court of Session Procedure, which gave rise to the chapter 43 procedure, describes the proposed valuations of claim as probably the most radical and important proposal.  The object was to bring forward as far as possible in the progress of the litigation the point which parties only then reached on the brink of proof.  At a point before the proof each party would have the other’s estimate of the claim, no doubt on a favourable view to that party.  As to sanctions the Working Party was keen to engender a culture of co-operation.  The sanction of having to appear and give an explanation for a failure, backed up by an award of expenses was thought in most cases to be sufficient.  However there were two stages of the scheme at which a more stringent sanction should be available though it was hoped that it would be very rarely used.  One of these was in the event of a failure to lodge a valuation by a due date where the court should have the power either to dismiss the action or grant decree for the amount of the pursuer’s valuation as the case may be.

[26]      The pre-trial meeting was the Working Party’s attempt to create the conditions for settlement that previously had in many cases only come about on Tuesday morning in Parliament Hall.  The Working Party set out the features which they considered important for the proper functioning of the scheme. Parties would be obliged to lodge all the material on which they proposed to found eight weeks in advance.  It would be held at a mutually convenient place sometime between 4 and 6 weeks before the proof.  Counsel would be briefed and prepared sufficiently to discuss both liability and quantum.  During the meeting both legal representatives should have access to someone who can give them immediate authority to compromise the action.  A minute should be lodged following the meeting and where that has not happened the Working Party recommended that the case should be put out by order.

[27]      The recommendations of the report were incorporated into what is now the Chapter 43 procedure.  The statements of valuation and the pre-trial meeting are of particular significance.  The notes to RC 43.9 in the Parliament House book describe statements of value of claim as one of the cornerstones of the scheme.

[28]      The importance of the statement of valuation is the part that it plays in the pre-trial meeting.  Having set out in advance of the meeting the respective positions of the parties it will in most cases define the scope of discussions on quantum.  If quantum is agreed at the pre-trial meeting the statements of valuation have no further use.  If not then they may inform the judge who is to conduct the proof or jury trial of the parties’ position on quantum but since counsel will address that matter in submissions such statements can have no real continuing benefit.  Accordingly whether or not quantum is agreed at the pre-trial meeting statements of valuation have little or no function after the meeting.

[29]      If a statement of valuation is not lodged then the court may put the case out by order (RC 43.6(3)).  The sanctions available at such a hearing are, where the pursuer has failed to lodge a valuation, dismissal of the action, or, where the defender has failed to lodge the valuation, decree for a sum not exceeding the pursuer’s valuation (RC 43.9(7)).  But these sanctions are said to be without prejudice to those contained in RC 43.7(2) which stipulates that at a by order hearing the court shall consider any explanation provided by the party in default, may award expenses against that party and make any other appropriate order including dismissal. Accordingly the court at a by order hearing has at its disposal a wide range of sanctions which may be imposed on a party in default.

[30]      The by order hearing is triggered by the Keeper who may put the case out by order when a document, including a statement of value of claim is not lodged timeously (RC 43.6(3), or in the case of a failure to lodge a record 43.6(7)).  The use of the word “may” in the rule confers a discretion on the Keeper as to whether or not to put the case out by order. That is to be contrasted with the situation where a joint minute of a pre-trial meeting has not been lodged on the due date where the Keeper “shall” put the case out to be heard on the by order roll (RC 43.10(3)).  The difference in approach between the two may signify the importance that the scheme accords to the pre-trial meeting.

 

Decision

Motion to alter the timetable to allow the defenders’ statement of valuation to be received

[31]      I decided to refuse the defenders’ motion.  I was not satisfied that the defenders had shown sufficient cause.  It is of course the case that things may from time to time be overlooked.  The court has recognised this in the recent removal of “special” from “special cause”.  As Practice Note 2 of 2014 makes clear that was done to offer some comfort where there had been a failure to adhere to the timetable as a result of a simple inadvertence. However in this case the oversight was repeated and in any event ought to have been crystal clear to the defenders in preparation for the pre-trial meeting.  However the real problem is that it came far too late.  The pre-trial meeting had long gone.  Attempting to have it lodged at the proof would be of no benefit.  As I have indicated once the pre-trial meeting has been held the statement of valuation has little or no function.

Sanctions

[32]      Before deciding what, if any, sanction should be imposed on the defenders I required to consider whether or not the sanctions which the Rules of Court specify as available at a hearing on the by order roll are available to the court at a proof diet.  On the one hand the rules specify that the sanctions are available at a by order roll hearing under RC 43.7.  If the rules are to be read as confining the sanctions available to the court to by order roll hearings and not to diets of proof then it seems to me that by the time that the proof diet had been reached the court could impose no sanction on either party for failure to comply with the timetable.  I note in particular that that RC 43.7(2) includes both awards of expenses and “any other appropriate order.”  If the rules are read narrowly that would mean that no award of expenses or other appropriate order could be made at the proof diet for a failure to comply with the timetable.

[33]      A diet of proof is set by the Keeper in the timetable that is issued under RC 43.6.  It is thus a peremptory diet.  Failure to appear at such a diet brings the party into default and the court may grant decree against the party in default with expenses (RC 20.1).  Whether the court does so or not is a matter of discretion.

[34]      In my opinion it would be odd if the court’s powers to ensure compliance with the rules could only be utilised if the Keeper puts the case out by order.  The court has an inherent power to regulate its procedure and to ensure compliance with the rules.  I do not consider that RC 43.7(2) or 49.7 limit the power of the court to impose sanctions to the by order roll.  Rather they specify that these sanctions are available to the court at hearings on the by order roll.

[35]      I note in passing that in Smith v Greater Glasgow & Clyde NHS Health Board Lord Jones observed that in Quigley, where a motion was made to allow the late lodging of productions at the proof, there is no mention of the Lord Ordinary having his attention drawn to the terms of RC 43.7.  The implication of that observation seems to me that Lord Jones considered that such sanctions would have been available to the court at the proof diet.

 In determining what sanction, if any, should apply I had regard to the following matters. First the case had got all the way to proof without a defenders’ valuation being lodged. Secondly the Keeper had not, as he might have done, put the case out by order when the defenders failed to lodge the valuation by the due date.  Thirdly both parties had signed the joint minute after the pre-trial meeting despite the fact that there was no statement of valuation by the defenders and no meaningful discussion on quantum had taken place.

I considered whether the proof should continue in the absence of the valuation without any sanction being imposed.  However I consider the failure to lodge the statement to be a particularly serious failure on the part of the defenders.  The statement of valuation is the cornerstone of the Chapter 43 procedure.  Its absence means that the pre-trial meeting cannot address quantum.  The opportunity to agree quantum, or at least to narrow down the issues, has been lost.  The pursuer has had to bring witnesses to court when that may not have been necessary.  And the court is potentially inconvenienced by having to listen to more evidence than might have been required had the parties agreed quantum.

[36]      Accordingly in my opinion there has to be a sanction. The granting of decree is of course the ultimate sanction and one that should be rarely used.  However it is one that is provided for in the Rules of Court.  It is difficult to see a more serious breach of the requirement to lodge a statement of valuation than to get to a diet of proof without one being lodged.

[37]      Even so the court should be wary of imposing that sanction and causing unfairness. Mr Henderson pointed to the fact that the Keeper had not put the case out by order as he might have done when the valuation was not lodged.  Accordingly he said that the defenders were not given the opportunity to rectify the problem at an early stage.  It is perhaps unfortunate that the case was not out by order but there was no obligation on the Keeper to do so.

[38]      It should have been obvious at the pre-trial meeting that no statement of valuation had been lodged.  Mr Wilson who as counsel had been present at pre-trial meeting said that he could not remember details of the meeting but he had pointed out to the defenders the lack of documentation.  Nevertheless he signed the joint minute.  He should not have done so given the terms of the Practice Note No. 2 of 2014, paragraph 5.  Indeed in my opinion counsel for the defenders should also have refused to sign the joint minute.  Had the joint minute not been signed the Keeper would have been obliged to put the case out by order.  It might be argued that by that stage it was too late but if the defenders had come in at that stage and sought an alteration of the timetable to enable the valuation to be lodged one option that might have been available to the court would be to ordain the parties to hold another pre-trial meeting and find the defenders liable in expenses to cover the abortive meeting.

[39]      Another option that I considered was to hold that the pursuer’s valuation should be taken as the quantum of damages and restrict the proof accordingly.  However at that point I looked at the defenders’ overall conduct of the proof, including their pleadings.  While it would be wrong to say that they had done nothing the most substantial progress in elucidating the defenders’ position came as a result of the pursuer’s service of a Notice to Admit.  The case was sisted on the defenders’ motion.  It appears that the agents did make efforts to have the pursuer’s previous employers insurers accept responsibility for the case without success.  They may also have been asked for assistance on the factual material. However despite the terms of the request no attempt was made to investigate the pursuer’s medical condition.

[40]      The defences are essentially skeletal in nature.  Mr Henderson contended that it was difficult to investigate the circumstances as any injury to the pursuer occurred before these defenders became the pursuer’s employers.  However it does not appear that any effort was made to investigate the facts.  The previous employers are still in existence.  There appears to have been no attempt to speak to any other employees at the time or to recover any documentary evidence, such as risk assessments, training manuals, instructions as to the handling of vibrating machinery or work schedules.  Where employers acquire businesses and employees, agreeing to accept the previous employers’ liabilities they have a duty to take whatever steps are open to them to properly investigate claims arising from that previous employment.

[41]      Mr Henderson submitted that the defenders were entitled to put the pursuer to his proof. Yet they could not put any competing account to him.  They could not suggest that he did not use vibrating machinery or that the tools did not emit excessive vibration.  They could not suggest that he was given training or warnings about their use.  They could not demonstrate that risk assessments had been undertaken.  They could not suggest that he does not suffer from HAVS or that there is a competing cause for his condition.  They had no witnesses to contradict him and no materials to put to him in cross examination.

[42]      For these reasons I would have been minded to grant the pursuer’s alternative motion for summary decree.

[43]      As to time bar the pursuer says on record that he was not aware until he went to his GP and was then referred for specialist examination that his condition had anything to do with his work.  Again that factual basis could not be contradicted by any contrary evidence or documentation.  Even if a defence under section 17 could be made out it is almost inconceivable that the court would not exercise its discretion under section 19A and allow the claim to proceed. 

[44]      The combination of the failure to lodge the statement of valuation combined with the defenders conduct of the case and the skeletal nature of the defence led me to the conclusion that the only appropriate sanction was to grant decree restricted to the sum concluded for.