Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2015] CSOH 57

 

A491/13

OPINION OF LORD PENTLAND

In the cause

AIRD GEOMATICS LIMITED AND OTHERS

Pursuers;

against

RICHARD STEVENSON AND ANOTHER

Defenders:

Pursuer:  Burr; Reid Cooper

First Defender:  McConnell; Drummond Miller LLP

14 May 2015

[1]        In this action three limited companies and an individual, known collectively and referred to in the pleadings as the Aird Group, sought various interdicts and awards of damages against a former employee, Mr Richard Stevenson (the first defender), and a company known as Carney Contracts Limited (the second defenders), with whom Mr Stevenson took up employment after leaving the service of the pursuers in the summer of 2013.  The business of the Aird Group concerns chartered surveying and consulting engineering.  The first defender was employed as a land surveyor;  the pursuers aver on record that he was employed by the Aird group, whereas the first defender maintains that his contract of employment was with the first pursuers only.  The details of the dispute underlying the present proceedings (and the subsidiary question as to who exactly employed the first defender) are not relevant for the purposes of this opinion.  Essentially, the action revolved around allegations that the first defender was in breach of certain terms of his employment contract, specifically a confidentiality clause and a non-solicitation provision.  The pursuers alleged, among other things, that having left his employment with the Aird Group, the first defender approached the second defenders with a view to undertaking similar work for them.  The pursuers also claimed that the first defender was carrying out land surveying work at a number of construction sites in various parts of the country and that this work involved him in making use of confidential information and material owned by the pursuers in breach of the obligations in his employment contract.  The first defender denied all the allegations made against him and resisted the proceedings on a number of grounds; again the details of the defence are not material for present purposes.

[2]        On 3 September 2013 the pursuers were granted interim interdict against the first and second defenders in terms of the conclusions of the summons.  There was a mistake in the terms of the interlocutor, but this does not matter for present purposes.  The pursuers’ motion for interim interdict was granted on an ex parte basis, no caveats having been lodged.  Shortly after this, the case was sisted to allow the first defender to apply for legal aid.  On 2 May 2014, by which time legal aid had, I presume, been granted, the first defender succeeded in having the interim interdict recalled; the pursuers having unsuccessfully opposed the motion for recall.  I was informed that the Lord Ordinary (Lord Jones), who granted the motion for recall, did not issue a written opinion.  Counsel advised me that his Lordship was satisfied that the pursuers had pleaded a prima facie case, but considered that the balance of convenience favoured the first defender.  This was because the interim interdicts were having a disproportionate impact on the first defender's ability to obtain employment and also because any damages to which the pursuers might ultimately be found entitled due to the first defender's breach of contract would be quantifiable without difficulty.

[3]        The first defender lodged a counter claim in which he sought damages of £60,000 on the ground that the interim interdict had been wrongfully obtained.  He alleged that, in consequence of the wrongful grant of interim interdict, he had suffered (and continued to suffer) loss of income, which he would otherwise have received from the second defenders.  His employment with them had been terminated following the grant of interim interdict and he had been unable to obtain other permanent employment.  He averred that his reputation had been damaged by the interim interdict and that he had suffered anxiety, stress and inconvenience.  In response to the counter claim, the pursuers relied on their averments in the principal action and denied that the interim interdict had been wrongfully obtained. 

[4]        On 11 July 2014 the court allowed parties a proof before answer in respect of the principal action and counter claim.  The proof was thereafter set down to commence on 28 April 2015.  The action as between the pursuers and the second defenders was settled by way of a joint minute;  by interlocutor of 8 April 2015 the second defenders were assoilzied from the conclusions of the summons insofar as these were directed against them.  On 22 April 2015 the pursuers intimated a minute of abandonment, in which they consented to decree of absolvitor being granted in favour of the first defender in respect of the principal action.  The case came before me on the day appointed for the proof.  Counsel for the pursuers moved at the bar that effect should be given to the minute of abandonment.  Counsel for the first defender did not oppose that.  Accordingly, I granted decree assoilzieing the first defender from the conclusions of the principal action insofar as directed against him.

[5]        That left for consideration the first defender’s counter claim.  Counsel for the first defender moved at the bar for summary decree to be granted under rule of court 21.3.  This was on the basis that there was no defence to the merits of the counter claim and that proof on it should be restricted to quantum of damages.  The pursuers opposed the motion for summary decree.

[6]        In support of his motion for summary decree, counsel for the first defender relied on the recent decision of an Extra Division of the Inner House in Mirza v Salim 2014 SLT 875.  He referred also to an obiter dictum of Lord Justice-Clerk Gill in Loudon v Hamilton 2011 SC 255.  Counsel’s submission was that there was no defence to the merits of the counter claim because the recall of the interim interdict amounted to conclusive proof that the order had been wrongfully obtained.  In the circumstances, the pursuers’ pleadings disclosed no relevant answer to the counter claim except in relation to quantum of damages.

[7]        In Mirza a majority of the court (Lady Dorrian and Lord McGhie) held that, in general, recall of an interim interdict was conclusive proof of its having been wrongfully obtained, with the result that where loss had been caused, damages would automatically follow.  It was not necessary to prove malice or a lack of good faith; a person who seeks interdict acts at his own risk.  The general rule was subject only to limited exceptions, the main (and possibly the only) one being where the interim interdict amounted in substance to a possessory remedy, although I note that Lady Dorrian acknowledged that the general rule might not apply where the reason for recall was that there had been a change of circumstances. 

[8]        Lady Paton took a different view on the point.  She held, at paragraph [57], that whether an interim interdict was wrongous and whether damages should be awarded was an open question, which could only be resolved by the court taking into account all the circumstances of the case; a proof before answer at large would, therefore, be required.

[9]        In Loudon, at paragraph [36], Lord Gill observed that an interim interdict is granted periculo petentis and that where it is shown that the claimant obtained such a remedy to which he was not entitled, he would be liable in damages to those who were subject to the interdict for the losses that they had sustained in consequence of it.

[10]      In response to these submissions, counsel for the pursuers argued that there was a distinction between what he described as a pure recall and a recall after the facts and circumstances of the case had been considered.  The meaning of the term ‘recall’ in this context was not, he said, straightforward.  The principle referred to by the majority of the Extra Division in Mirza only applied where the recall involved there having been a judgment on the facts of the case.

[11]      Counsel for the pursuers went on to submit that Mirza had been wrongly decided.  He accepted that I was bound to follow the decision, but reserved his right to argue on appeal (if necessary before a larger court) that the view of the majority was unsound in law.  He referred to a number of passages from chapter 30 of Burn‑Murdoch, Interdict in the Law of Scotland (1933) dealing with wrongous interdict (paragraphs 458 to 462).  He also referred to Aird v Tarbert School Board 1907 SC 305, a decision of the First Division, which, it would appear, was not cited to the court in Mirza.  Counsel said that the decision in Aird was inconsistent with the majority view in Mirza  and called into question the soundness of that ruling.  In view of this submission, it is appropriate to examine the Aird case in a little detail to see if it is indeed irreconcilable with Mirza. 

[12]      In Aird the executors of a deceased school teacher sought damages for wrongous interdict.  The background was that the School Board obtained an interim interdict against the deceased by which he was prohibited from acting as head master of the school, from entering the school for the purpose of teaching and from interfering in its management and affairs.  Interim interdict was granted on the School Board's application and on their statement alone.  Shortly thereafter, the interim interdict was recalled, answers for the teacher having been lodged and considered by the court.  The decision to recall the interim interdict was affirmed by the Inner House.  The ground of recall appears to have been that the School Board had not formally passed a resolution to dismiss the deceased and, therefore, there had technically been no dismissal.  Having considered the procedural background and the facts I have summarised, Lord Kinnear, with whom Lords McLaren and Pearson agreed, said this (at page 310):

“Now it is said by the present pursuer that that recall is conclusive of the question whether the interdict was wrongous or not;  and in one sense that is perfectly correct.  The recall of the interdict shews conclusively that it ought not to have been asked for or granted, and, as it was granted periculo petentis like all interim interdicts before answers have been put in, the complainers were responsible for obtaining an interdict which ex hypothesi they ought not to have asked for.  But the question whether it is a wrongous interdict, in the sense of operating as a civil wrong which will support an action of damages, does not depend on the procedure at all, but depends upon what the effect of the interdict was, and whether the prohibition contained in the interdict was really an invasion of the pursuer’s right or not.  The mere fact that the defenders have obtained interim interdict which afterwards turns out to be ill‑founded will not of itself support an action of damages, because it will not of itself shew that any real wrong was done to the pursuer.”

 

[13]      His Lordship then went on to consider what, as he put it, the interdict really did.  He noted that the day after the interim interdict was recalled the Board proceeded to suspend the deceased from acting as schoolmaster and presented a fresh interdict for preventing his continuing to act.  That interdict was granted ad interim and there was no complaint made by the deceased (or his executors) as to the interdict or the conduct of the School Board in applying for it.  Soon after there ensued further statutory procedure in terms of which the Board formally and conclusively dismissed the deceased.  As to that stage of matters again the deceased and his executors made no complaint.  The upshot was that the deceased had been prevented by the original interim interdict from acting as head master or interfering with the management of the school for a total of 17 days and thereafter he was effectually forbidden to interfere with the management of the school or to exercise the duties of schoolmaster, and was formally dismissed. 

[14]      Lord Kinnear noted that, in these circumstances, the deceased and his executors made no claim for wrongous dismissal and no claim for pecuniary loss in respect of anything.  Their only complaint was that the deceased had been kept out of the school for 17 days by an interim interdict which ought not to have been granted.  That allegation established no case of any legal wrong and no case for damages.  Under the prevailing statutory framework the deceased had held office at the pleasure of the School Board.  They were entitled summarily to suspend him from the exercise of his duties.  Accordingly, the interim interdict could not be said to have injuriously affected any legal right of the deceased.  There was, therefore, no invasion of any legal right in the deceased and no damage had been done to him.    

[15]      In my opinion, it is clear, when one examines the facts of the Aird case and Lord Kinnear's analysis of them, that the real issue which the court was considering was whether the pursuers could show that the deceased had suffered damage as a result of the interim interdict.  Since his executors were unable to show that the deceased had sustained any financial loss flowing from the interim interdict, the court held that there was no relevant case for damages for wrongous interdict.  In short, the pursuers could not prove any loss caused by the interim interdict.  I can find nothing in Lord Kinnear’s opinion which detracts from or is inconsistent with the principle that recall of interim interdict will, in general, raise a conclusive presumption that the order was wrongfully obtained.  That was, of course, the principle reiterated by the majority of the Extra Division in Mirza.

[16]      I note also that the majority’s view in Mirza is entirely consistent with and supported by other Inner House authority.  In particular, in Wolthekker v Northern Agricultural Company (1862) 1 M. 211 Lord Justice-Clerk Inglis drew a distinction between rights to which a litigant was entitled – such as diligence on the dependence – and other remedies for which application had to be made to the court, such as interim interdict.  His Lordship observed that the rule governing the former category, by which proof of malice was needed before there could be liability for wrongful recourse to the remedy

“does not hold in those cases, where a party applies to a court for some special diligence or remedy, and requires to make a statement or representation to the court, to induce the court to give him the requisite authority, as in the cases of interdict, landlord’s sequestrations, and warrants against parties in meditatione fugae.  In such cases the applicant must be answerable for the truth of the statement on the face of which he obtains his warrant.  Whether that statement was made in good faith or in bad faith, if it was inconsistent with fact, and unjustifiable, he must be answerable for the consequences.” (page 213)

 

[17]      Three years later in Millar v Hunter (1865) 3 M 740, 745 Lord Inglis stated that recall of an interim interdict was conclusive that it had been wrongfully obtained.  The only example of an exception he gave was in regard to cases where interdict had been resorted to for the purpose of defending possession of a property.

[18]      In my view, examination of these cases (Wolthekker, Millar and Aird) shows that, long before Mirza was decided, there was a clear line of authority supporting the proposition that, in general, recall of an interim interdict amounts to conclusive proof that the order was wrongously obtained. This rule may not apply in cases where the interim interdict can be properly classified as being in the nature of a possessory judgment or where recall has been granted because of a material change in circumstances.  Counsel for the pursuers did not suggest that either of those exceptions applied in the present case. 

[19]      As to the argument advanced for the pursuers that the general rule applies only where there has been an examination of the facts of the case, I consider this to be misconceived.  There is no support for it in the authorities. The case law does not place any such limitation on the application of the rule.  Accordingly, I reject this line of argument.

[20]      In the whole circumstances, I conclude that the pursuers have no defence to the merits of the counter claim.  They accept that the interim interdict, which they obtained ex parte on 3 September 2013,  was recalled by Lord Jones on 2 May 2014.  The recall raises a conclusive presumption that the interim interdict was wrongously obtained.  From this it follows that the only live issue remaining for resolution in the counter claim is whether the wrongous grant of interim interdict  caused the first defender to sustain any loss.  On that question (and only on that question) there will have to be a proof.  I shall, therefore, grant the first defender’s motion for summary decree by sustaining the first defender’s first plea-in-law in the counter claim and repelling the pursuers’ first and second pleas.  The effect of this is that the proof on the counter claim will be restricted to quantum of damages.

[21]      I shall also put the case out by order so that any procedural implications of this ruling can be addressed.