Scottish Sheriff Court Decisions

HERIFFDOM OF LOTHIAN AND BORDERS   Case Number: SC1101/08
	Judgment by   SHERIFF PRINCIPAL MHAIRI M STEPHEN   in appeal in the cause   MS JACQUELINE GEE Pursuer & Respondent   against   AXA CORPORATE SOLUTIONS ASSURANCE SA UK LIMITED   Defenders & Appellants   ___________________________

 

Act: Sheldon, Advocate for the defenders and appellants, instructed by HJB, solicitors

Alt: Shepherd, solicitor, for the pursuer and respondent

 

 

 

EDINBURGH, 27 August 2012

The Sheriff Principal having resumed consideration of the cause and the case stated by the sheriff declines to answer question 1a as unnecessary; answers question 1b in the negative; answers questions 1 and 3 in the negative; answers question 2 in the affirmative; allows the appeal and recalls the sheriff's interlocutors of 2 July and 17 November 2010 thereafter dismisses the action ;certifies the cause as suitable for the employment of counsel; finds the respondent liable to the appellants in the expenses of the appeal; allows an account thereof to be given in and remits the same when lodged to the Auditor of Court to tax and to report thereon.

 

(signed) Mhairi M Stephen

 

NOTE

1.             This summary cause action relates to a road traffic accident in July 2006 when the pursuer's car suffered damage due to a collision with the defenders' insured's delivery vehicle. Fortunately no injury was suffered by either driver and the action relates solely to recovery of damages for repairs to the vehicle and compensation for the loss of use of her car whilst it was being repaired. So far so good and the subject matter entirely straightforward. This type of case arises daily in the sheriff court. The only issue on which evidence was led related to how much the pursuer could recover from the defenders by way of damages for loss of use of her car for a period of some 4 weeks in September /October 2006. At proof the sheriff also heard submissions to the effect that proof was unnecessary as the parties had agreed a division of liability and settlement had already been effected. Accordingly, the only two issues before the sheriff now form the grounds of appeal. The questions of law posed by the sheriff in her stated case are :-

"1a. On whom does the onus of establishing impecuniosity lie?

1b. Was I entitled to repel the defenders objections to the line of questioning in relation to the issue of the pursuer's impecuniosity?

1.             In respect of the said hire charges was I entitled to find that the pursuer at the time of hire of the replacement car impecunious (Lagdon v O'Connor [2004] 1 AC 1067?)

2.             Was I entitled to find that the correspondence between the parties prior to proof amounted to extra judicial admissions only rather than an agreement to settle.

3.             On the facts stated was I entitled to grant decree for payment in favour of the Pursuer?"

 

Apparently questions 1a and 1b were added at the stage of adjustment of the stated case. The appeal was heard over two days in May and July 2012. Given the straightforward nature of the action it is appropriate to consider why six years have elapsed from the date of the incident

2.             The timeline for this summary cause is as follows:

·  The pursuer, Ms Gee, is involved in a road traffic accident on 26 July 2006 when the defenders' insured's driver causes his HGV to collide with Ms Gee's vehicle.

 

·  Despite the sheriff's fourth Finding in Fact Ms Gee continues to use her vehicle until she takes it for repair in September 2006. She hires an Audi A6 Avant 2.0 from Accident Exchange on a credit hire basis from 19 September until 16 October 2006 at a total cost of £4,299.18.

 

·  Prior to litigation a claim is intimated for recovery of Ms Gee's losses. During the pre-litigation negotiations there is correspondence between the defenders' representative and Accident Exchange to the effect that matters may be agreed on the basis of a 50 50 settlement following which the defenders and appellants make payments to the respondent totalling £1,706.68.

 

·  The pursuer and respondent lodges her summons with this court in December 2008 with a first calling in February 2009. After a continuation for negotiations and other sundry procedure a proof is fixed for September 2009. That proof is put off on joint motion and another proof fixed for 9 March 2010 which requires to be discharged due to lack of court time. During this period both parties adjust and amend their statement of claim and answers. The appellants make a call on the respondent to state "whether she had sufficient funds to pay for the cost of hiring a vehicle other than by 'credit hire' ". The respondent then amends her summons to state " The pursuer was impecunious at the start and during the hire period "

 

·  The proof proceeds on 12 May 2010 when evidence is led. The cause is continued to 18 June 2010 for submissions with a further hearing on 2 July 2010 on expenses. The sheriff delivered an ex tempore decision on 2 July granting decree for the sum of £3, 775.63 which is the sum claimed by Ms Gee.

 

·  17 November 2010 the final interlocutor is pronounced following a hearing on expenses.

 

·  19 November 2010 appeal lodged.

 

·  July 2011 draft stated case issued by the sheriff.

 

·  20 February 2012 stated case finalised and issued.

 

·  9 May 2012. Appeal hearing. Submissions by counsel for appellants. Counsel for respondents seeks leave to withdraw from acting as he considers he is unable to meet the appellants' submissions and present his arguments having only been recently instructed. Hearing adjourned.

 

·  31 July 2012 submissions by the solicitors for the respondent. Avizandum.

 

 

SUBMISSIONS FOR THE APPELLANTS

3.             Mr Sheldon, Advocate for the appellants addressed me on both grounds of appeal.

 

4.             The first ground of appeal - whether there was an agreement prior to proof that liability be split on a 50/50 basis? The appellants' submissions on this ground of appeal relied on the correspondence and the documents lodged in the defenders' first inventory productions being the e-mailed correspondence between Accident Exchange and the defenders in April 2008. It is the appellants' position that the exchange of e-mails forms an agreement to settle on a 50/50 basis. The intention and effect is to settle and the agreement binds the parties. Mr Sheldon referred to McBryde on Contract Chapter 6 and para 6.20 on the effect of the words "without prejudice"

 

5.             The sheriff had therefore erred in the manner that she dealt with the matter of the agreement. She took the view that this was a pre-litigation agreement observing that there was no consensus in idem between the parties. The correspondence, on the other hand, clearly reflects an agreement between the parties to settle and therefore it binds the parties. The sheriff is wrong to treat the evidence in the manner she did.

 

6.             Second ground of appeal - whether the credit hire charges incurred by the pursuer are recoverable from the defenders.

 

In respect of this ground of appeal I was reminded that the impecuniosity or otherwise of the pursuer was the sole issue before the sheriff at proof. The only evidence led before the sheriff related to the issue of impecuniosity and that came solely from the pursuer.

 

7.             Essentially Mr Sheldon's argument was that there was no evidence before the sheriff on which she could find the pursuer impecunious. The sheriff ought not to have allowed the evidence of the pursuer (which was objected to). The sheriff ought to have known that by allowing the pursuer's evidence there would be material prejudice to the defenders and appellants. The appellants had received no fair notice in the pleadings of the pursuer's circumstances other than the bald averment that she was impecunious; the sheriff had made an interlocutory decision earlier in the proceedings refusing the appellants' specification of documents. The sheriff had refused the appellants' specification on the unsatisfactory basis that as it was for the pursuer to prove that she had mitigated her loss it was unnecessary to allow the appellants' specification. The defenders had thus suffered prejudice by the lack of fair notice and this prejudice had been compounded by the sheriff's decision to refuse specification of documents. The defenders had made a call on the pursuer in Answer 5 in the following terms:-

"The pursuer is called upon to state whether she had sufficient funds to pay for the cost of hiring a replacement vehicle other than by using the services of a 'credit hire' company. Her failure to answer the call will be founded upon."

 

8.             The manner in which the sheriff deals with the objection taken by the defenders' solicitor to examination in chief of the pursuer relating to impecuniosity is flawed and completely inadequate. The sheriff mentions this at Finding in Fact 7b but gives no reasons for repelling the objection, which in itself, further compounded the prejudice to the defender. Nor does she give satisfactory reasons for finding that the pursuer was impecunious.

 

9.             The pursuer's evidence and the sheriff's findings in fact on that evidence are completely unsatisfactory and insufficient to support a finding of impecuniosity. The relevant Findings in Fact are 6 and 7.

 

10.         In support of his submissions Mr Sheldon referred to Kuklinski v Hassell 1993 SLT (Sh Ct) 23 which was a decision of Sheriff Principal Nicholson. I was referred to the relevant passage from Macphail on Sheriff Court Practice at 9.29 which deals with the specification required in written pleadings. The decision in Kuklinski v Hassell makes it clear that adequate notice of material facts in dispute and of any legal ground on which a cause has been pursued and defended must be given. In this case the pursuer and respondent failed to give that notice and the sheriff erred in failing to deal with the deficiency in the pleadings which caused material prejudice to the appellants.

 

11.         It was observed by the appellants that the respondent had persuaded the sheriff to introduce, by way of adjustment to the stated case, question 1(a) "on whom the does the onus of establishing impecuniosity lie?".

 

12.         The appellants' position is that the question of onus of proof was almost irrelevant given his prime submission on the evidence and lack of notice or specification of the respondent's impecuniosity.

 

13.         If, however, the question of onus was an issue before the sheriff during proof then the sheriff had taken an inconsistent or contradictory view on onus having earlier refused the specification of documents for the defenders on the basis that any onus of proving mitigation of loss lay with the pursuer.

 

14.         Nevertheless Mr Sheldon dealt with the question of onus with three straightforward propositions. Firstly, that the pursuer puts the question of impecuniosity in issue in her pleadings and therefore it is for the pursuer to prove impecuniosity. Secondly, to require the onus to lie with the defenders on a matter which relates to the opponent's financial circumstances would be very difficult, if not impossible. The pursuer's financial circumstances are matters peculiarly within the pursuer's knowledge and it is therefore for the pursuer to discharge that onus (Walker v Chesapeake Hillington Limited - unreported decision of Sheriff Mitchell at Glasgow Sheriff Court October 2010). And thirdly, if the onus of proving impecuniosity lay with the defender then that would impose on the defender a negative onus of proof which would be very difficult to discharge.

 

15.         Finally, Mr Sheldon considered the English authorities of Dimond v Lovell [2002] 1 AC and the House of Lords Decision of Lagden v O'Connor [2004] 1 AC. Proper consideration of these authorities did not support the respondent's position that the onus lay with the defenders. It may be for the defenders to point to the pursuer having acquired some betterment but these authorities did not derogate from the proposition that the pursuer had a duty to mitigate loss. These authorities do not deal with the onus of proof and do not suggest that the onus should shift to the contradictor.

 

16.         Accordingly, Mr Sheldon's prime submission is that I should allow the appeal and dismiss the action there being no basis upon which to recalculate the hire charges on a spot rate basis standing the Sheriff's comments at Finding 7a. Alternatively, if I was against him on his second ground of appeal I should allow the appeal based upon the binding agreement and reduce by one half the damages set by the sheriff in her decree. Expenses should follow success and I should consider the cause suitable for the employment of junior counsel.

 

RESPONDENT'S SUBMISSIONS

17.         In reply Miss Shepherd for the respondent suggested that both grounds of appeal sought to challenge the sheriff's view of the evidence. The sheriff, who heard the witnesses, was entitled to reach the conclusion she did both on the question of the pursuer's impecuniosity and also the lack of a binding agreement to split liability for the consequences of the accident. I was referred to Thomson v Kvaerner Govan Limited 2004 SC (HL) 1. I was reminded of the rule relating to the proper approach of an appellate court to a decision on fact by the court of first instance. This is referred to by Lord Hope of Craighead in his judgment on page 5 paragraph [16]. Accordingly, I should be slow to interfere with the sheriff's view of the evidence and the weight she placed on the evidence of the pursuer in particular. As an appeal judge I do not have the "privileges, sometimes broad and sometimes subtle, of the judge who heard and tried the case".

 

18.         Turning to the first ground of appeal Miss Shepherd put forward three propositions in support of the sheriff's opinion on the purported agreement. These were: firstly, that the appellants did not lead evidence to prove that there was a binding pre-litigation settlement. They were not entitled to rely on the copy e-mails as they did not speak for themselves despite the terms of paragraph 4 of the Joint Minute of Agreement. Secondly, standing the terms of the correspondence between the parties the sheriff's decision that the correspondence pointed to any agreement being merely an extra judicial admission was entirely correct and thirdly, given the actings of the parties at the time of proof the sheriff was correct in observing that there was no consensus in idem and therefore no binding agreement. I was referred to the authority of Van Klaveren v Servisair UK Limited [2009].CSIH 37

 

19.         The second ground of appeal was central to proof. Essentially the respondent's submission was that it was not for the pursuer to prove that she was impecunious she did not require to plead impecuniosity. Miss Shepherd relied on the dicta of Lord Hope and Nicholls in Lagden v O'Connor in support of that submission and that the circumstances pertaining in this case were not dissimilar to the circumstances personal to Mr Lagden. The sheriff was entitled to make the finding of impecuniosity from the circumstances spoken to by the pursuer. She had no work, no money in her bank account, was separated and had sole responsibility for the children. She was in dire straits. It goes without saying that the sheriff must have accepted the evidence of the pursuer. That was sufficient to meet the criteria of impecuniosity. The pleadings relating to impecuniosity give fair notice of the pursuer's position to the defenders. The pursuer averred impecuniosity in order to give notice to the defenders and to assist. The issue of the refusal of the specification of documents was neither here nor there as it was open to the defenders to renew their specification or appeal.

 

20.         Miss Shepherd questioned whether Dimond v Lovell which is an English authority reflected the law in Scotland and further that the case of Walker v Chesapeake relied upon by the appellant was neither binding nor applicable to this case given that it post-dates the date of proof and was a decision of a sheriff in Glasgow.

 

21.         I was also referred to the decisions of Sheriff Horsburgh in Cunningham v City of Edinburgh Council and Sheriff O'Grady in Duncan v City of Edinburgh Council both 2009 and unreported.

 

22.         In essence Miss Shepherd's submission was to the effect that the onus was on the defenders to show that the pursuer had acted unreasonably in choosing the credit hire agreement. In any event the sheriff being well aware of the concept of impecuniosity was entitled to accept, as she did, in finding that the "pursuer acted reasonably in using the services of Accident Exchange. The costs incurred by her were reasonable in all the circumstances." The appeal should be refused and the sheriff's decision adhered to.

 

DECISION

23.         The history of this case does nothing to allay public concerns that litigation is slow, inefficient and expensive. That is most unfortunate especially as the clue to the procedure which ought to be adopted is in the title - this is a summary cause action and is the type of litigation which ought to be capable of being resolved economically and expeditiously. The parties and the court and particularly the sheriff have contributed to the needless delay in a case which is a simple, straightforward road traffic accident with no personal injury arising. There were, indeed, only two issues before the sheriff and these are the issues which now form the grounds of appeal. Further unnecessary delay and cost has been added during the appeal when counsel for the respondent appeared unprepared to meet the argument advanced by the appellants.

 

24.         A pursuer may recover damages for losses incurred due to the negligence of another driver. It is the duty of the innocent pursuer to mitigate his or her loss. The loss of use of a vehicle damaged due to a road traffic accident is one of the losses which, in appropriate circumstances, may be claimed. That loss may be met by the hire of a replacement car and the cost of that hire will be the measure of damages recoverable for the loss of use.

 

25.         However the pursuer can only recover what is reasonable - that in mitigation of her loss of use of her own vehicle it was necessary and reasonable to hire another vehicle and that the vehicle hired is equivalent to the damaged vehicle. It appears that no issue arises from these points in this case.

 

26.         As the pursuer can only recover what is reasonable, it is noted that in this case the pursuer seeks to recover expenditure not actually incurred. In a credit hire agreement the hirer is not liable to pay the hire charges until liability has been decided or there has been a court decree. If it was reasonable for the pursuer to hire a replacement vehicle and that hire is on credit hire terms the damages recoverable from the defenders will not necessarily be the amount of the credit hire that the pursuer agrees to pay the credit hire company. The amount recovered will depend upon the financial circumstances of the pursuer. If the pursuer could afford to hire a replacement vehicle in the normal way that is without credit terms and paying the basic hire rate in advance then the amount recoverable for loss of use of the damaged vehicle will be the sum attributable to the basic hire rate of the replacement vehicle.

 

27.         In the cases of Dimond v Lovell [2002] 1 AC 384 and Lagden v O'Connor [2004] 1 AC 1067 the court discussed the difference between the basic hiring rate and the credit hire rate. The basic hire rate is the rate normally paid by individuals who choose to hire a vehicle by effectively paying in advance. It is often referred to as the "spot hire" rate. The credit hire rate takes account of additional advantages which the credit hire company gives to the hirer, namely, credit; the credit hire company also takes over the handling and pursuing of the claim for damages and of course there must be an element of profit for the credit hire company. These additional elements are not part of the recoverable loss of the hirer.

 

28.         In Dimond v Lovell [2002] 1 AC 384 the majority of the House of Lords decided that a car owner could not recover more than the "spot rate" quoted by hirers and not the additional benefits the accident hire company provides eg credit and representation. Lagden v O'Connor developed that line of authority and effectively established an exception to the rule laid down in Dimond. If it was shown that the claimant's impecuniosity was such that he would have been unable to obtain a replacement car had he not used a credit hire company then the reasonable additional charges of that company would be recoverable as damages. Thus the court would not be precluded from considering the innocent motorist's lack of means.

 

29.         If the pursuer cannot afford to hire a replacement car by paying in advance (described as "impecunious" in the cases referred to) then the pursuer prima facie is entitled to recover the whole of the credit hire rate. The reasoning being that, if the claimant or pursuer is impecunious then if it is reasonable to hire a replacement car he has no choice but to take the credit terms. Whether the pursuer is impecunious depends on the facts and circumstances relating to the pursuer and especially the pursuer's financial circumstances which, in my view, are correctly described as "facts and circumstances peculiarly within the knowledge of the pursuer".

 

30.         The word "impecunious" or "impecuniosity" does not describe a state of being independent of an individual's financial circumstances. According to Lord Hope in Lagden paragraph [41] it is an adjective incapable of precise definition. It describes a lack of money. It requires consideration to be given to a claimant's financial circumstances relative to the ability to pay in advance for a hire car.

 

31.         Lords Hope and Nicholls give some pointers in Lagden as to what they think may be important. Lord Nicholls at paragraph 9 states:-

"There remains the difficult point of what is meant by 'impecunious' in the context of the present type of case. Lack of financial means is, almost always, a question of priorities. In the present context what it signifies is inability to pay car hire charges without making sacrifices the plaintiff could not reasonably be expected to make."

Impecuniosity was not the issue in Lagden but rather the consequences for the plaintiff of his impecuniosity if he had to spend more to mitigate his loss of use of the vehicle and whether that would be recoverable as damages from the defendant.

 

32.         Lord Hope, along with other judges, in the House of Lords dealt with concern about a flood of small value road traffic claims in the court system on this point and at paragraph 42 states:-

"In practice the dividing line is likely to lie between those who have, and those who do not have, the benefit of a recognised credit or debit card."

It is important to observe that Lagden did not deal with the onus of proving impecuniosity. The point is so obvious that I doubt the House of Lords would have thought onus to be an issue at all. In my view, the issue in this appeal is not the question - on whom does the onus of proving impecuniosity lie? Impecuniosity is a subset of the duty to mitigate loss which lies with the pursuer or claimant and which in turn is a subset of what damages may I recover? Lagden opened the way for an impecunious claimant or pursuer to avail herself of the exception to the rule laid down in Dimond v Lovell and stated that the court could consider the injured party's lack of means when approaching the issue of damages. The impecunious pursuer is, of course, an exception to the general rule and it is for the pursuer who asserts lack of means to put that in issue and to bring evidence to support the assertion. It appears to me that the question is a matter for pleading and evidence and it is for the party placing the issue of impecuniosity before the court to bring evidence in support that averment.

 

33.         In the course of submissions Miss Shepherd for the respondent referred to the decision of Sheriff O'Grady in the unreported case of John Duncan v City of Edinburgh Council as authority for the proposition that the onus of proving a deduction from expenditure in mitigation lies with the defender. Firstly, the issue being dealt with by Sheriff O'Grady did not relate to the pursuer's impecuniosity. Instead that case dealt in effect with an argument on betterment centring on the pursuer's decision to use a credit hire company to obtain a specialist vehicle suited to his specific requirements and including a tow hook. No doubt the passage in Lagden to which the sheriff refers in that case is the speech of Lord Hope at paragraph [34]:-

"It is for the defendant who seeks a deduction from expenditure in mitigation on the ground of betterment to make out his case for doing so. It is not enough that an element of betterment can be identified. It has to be shown that the claimant had a choice, and that he would have been able to mitigate his loss at less cost. The wrongdoer is not entitled to demand of the injured party that he incur a loss, bear a burden or make unreasonable sacrifices in the mitigation of his damages. He is entitled to demand that, where there are choices to be made, the least expensive route which will achieve mitigation must be selected. So if the evidence shows that the claimant had a choice, and that the route to mitigation which he chose was more costly than an alternative that was open to him, then a case will have been made out for a deduction. But if he shows that the claimant had no other choice available to him, the betterment must be seen as incidental to the step which he was entitled to take in the mitigation of his loss and there will be no ground for it to be deducted."

 

34.         Accordingly, Lagden is certainly not authority for the proposition that the defenders bear the onus of proving the impecuniosity or otherwise of his opponent. It is simply an absurd proposition for the respondent to suggest and indeed for the sheriff to accept that there might have been an onus on the defenders in this respect.

 

35.         Principles have been established on onus of proof in both civil and criminal jurisdiction. Normally, the burden of proof lies with the party who asserts the affirmative as the Pursuer does here when she places her impecuniosity in issue. The maxim ei qui affirmat, non ei qui negat, incumbit probatio applies .This is a well established principle of the law of Scotland .Furthermore when there are facts peculiarly within the knowledge of one of the parties as here another general rule applies which would require the Pursuer to prove her financial standing . That rule is - where one party makes a negative averment of facts and circumstances which are peculiarly within the knowledge of the other then the other, being the party within whose knowledge it lies, and who asserts the affirmative is the party to prove it and not the party who avers the negative. Any burden thus lies on the party asserting the question of impecuniosity which is, of course, the pursuer who wishes to avail herself of the exception to the rule on damages set down in Dimond v Lovell.

 

36.         It is not difficult to understand the wisdom of that rule. On the contrary, it is virtually impossible for the defender to prove the Pursuer's financial circumstances. It would require great diligence and disclosure for the defenders to begin to assemble and establish a matrix of the opponent's means. Frankly, it defies common sense to suggest, in this case, that there is any onus on the defenders in respect of the pursuer's impecuniosity. It is quite unreasonable and unworkable to expect the Appellants to prove what is, in effect, a negative and that of facts almost exclusively within the Pursuer's knowledge. It is for these reasons that I decline to answer the question of law 1a . The answer is obvious and ought to have been obvious to the Sheriff. The party who asserts impecuniosity must prove it .Unfortunately, the Sheriff makes no mention in her stated case of her approach to this issue.

 

37.         Of course, in the absence of notice and disclosure by the party asserting the positive averment of impecuniosity, the defenders might hope to avoid an expensive proof and seek information informally first of all and then by specification of documents. It appears that the defenders in this case did so but the pursuer opposed the specification and the same sheriff who heard the proof refused the defenders' motion for a commission and diligence in terms of that specification. I am informed that the motion was refused by the sheriff on a correct view of where any onus lay but an imperfect appreciation of the purpose and scope of a commission and diligence which, amongst other things, is a tool available to either party in an effort to prepare for proof or limit proof and indeed facilitate settlement.

 

38.         I turn now to the crux of the second ground of appeal. This long preamble on the authorities and onus of proof merely sets the scene for the real issues on appeal and that is the specification of facts about which the pursuer intends to lead evidence and whether the opponent has fair notice of these facts. It is the essence of the appellants' argument that the respondent fails to aver facts to enable her to establish impecuniosity and thereby has failed to lead proper and sufficient evidence on which the sheriff was entitled to make a finding on or relating to the pursuer's impecuniosity.

 

39.         In Lagden v O'Connor in the speech of Lord Hope of Craighead reference is made to the question of whether the pursuer has the use of a recognised credit or debit card and that this may form a basic test of impecuniosity. As I have said, whether someone is "impecunious" will depend on the circumstances of the pursuer.

 

40.         Against that background, I turn to look at the second ground of appeal which states:-

"Further, the sheriff has erred in law in holding that it was established in evidence that the pursuer was impecunious. There was insufficient evidence led by the pursuer to entitle the sheriff to make such a finding"

and the relevant parts of the Sheriff's stated case which are Findings in Fact 5 -8 and the sheriff's note.

 

It does not appear to be disputed that it was necessary and reasonable for the pursuer to require to hire a replacement vehicle. Perhaps Finding in Fact 5 is the sheriff's finding in this regard, although it appears to be more of a narrative as to how the pursuer got in touch with accident exchange.

 

41.         Finding 7a and 7b do not appear to me to be findings in fact at all. Finding in Fact 7a is indeed a narrative that the defenders' witness gave evidence about spot rates which the sheriff says she did not require to consider on the grounds of the pursuer's impecuniosity. There are no findings in fact on the "spot rates". 7a may have been suggested or inserted by way of adjustment however this ought to be part of the sheriff's note and not a finding in fact. The stated case lacks any proper finding on the normal method of quantifying damages ie "spot rates".

 

42.         Finding in Fact 7b likewise is not a finding in fact but an inadequate account of the defenders' objection to the evidence elicited from the pursuer in relation to her financial standing. The sheriff correctly observes that the objection is based on lack of notice in the pleadings; lack of vouching and the impediment faced by the defenders' due to their specification of documents having been refused by the sheriff. What is totally lacking, however, is any reasoning by the sheriff on the objection and on her decision to repel the objection and allow the evidence. This is of fundamental importance in this proof and therefore in this appeal. It is the de quo of this case. The sheriff's stated case gives no clue as to how or why she comes to her decision. I cannot ascertain what her view of the arguments might have been. These are important matters especially as the sheriff puts these matters in issue for me in this appeal standing her questions in law. In my view, the appellants are correct in identifying that the specification of the pursuer's pleadings and the approach taken by the sheriff to the evidence led from the pursuer are the crucial issues for this ground of appeal.

 

43.         The respondent puts the averment of impecuniosity in issue for proof. She gives only a clue that she is seeking to take herself into the exception from the normal rule relating to recovery of damages for loss of the use of her vehicle. She requires to say more. She and only she can supply specification of her financial circumstances. Her advisers who refer significantly to the decision of the House of Lords in Lagden v O'Connor are indeed given some pointers by their Lordships as to what factors may be important but still specification is lacking.

 

44.         The case of Kuklinski v Hassell makes it clear that small claims and summary cause actions have no special rules regarding specification compared to an ordinary action. Thus fair notice must be given of any material facts which are in dispute. It cannot be disputed that the issue of the pursuer's impecuniosity is a material fact as it was the only issue for proof. The bare assertion of impecuniosity only gives the defender a clue as to what the pursuer is hoping to achieve and gives no specification of the respondent's financial circumstances whatsoever and therefore no notice of the material facts which she requires to prove her state of impecuniosity. Standing the importance of these facts they ought to have been averred in support of the general averment on impecuniosity and the failure on the part of the pursuer to aver any facts mean, in my view, that the defenders suffered clear and material prejudice. It has never been and certainly can no longer be suggested that it is suitable for one party to say to the other that the detail will be revealed at proof. This is not only unacceptable but prejudicial. Likewise the sheriff ought to have been alert to the clear prejudice to the defenders and in dealing with the objection ought to have regard to this obvious prejudice. Accordingly, the question posed by the sheriff as question 1B in the stated case should be answered in the negative. She should not have repelled the objection made properly and timeously by the defenders.

 

45.         Furthermore, it follows that the sheriff and also the respondent in her submissions fell into error in accepting that the issue of impecuniosity was proved by the pursuer's own evidence. The submission made by Miss Shepherd, for the respondent, relating to the privileges of the sheriff or judge at first instance is nothing to the point. No matter how credible or reliable the pursuer may have been the sheriff was not entitled to accept that evidence as sufficient to prove impecuniosity given the lack of vouching and the clear prejudice to the defenders. The sheriff, herself, has fallen into the trap of finding impecuniosity because she believed and accepted the pursuer's evidence. What the sheriff is in effect saying is the person who asserts impecuniosity is impecunious because she says she is. There were no checks, balances or vouching of her evidence. The relevant findings in fact made by the sheriff indicate, in any event, that the evidence given by the pursuer some four years after the accident was of a vague almost casual nature or at least the drafting of the findings in fact indicate a casual approach to the evidence. Counsel for the appellant in his submission on the sheriff's stated case showed undisguised restraint as to the terms of the stated case. However, even if I am wrong in determining that the sheriff ought to have upheld the objection to the evidence clearly the evidence which the sheriff had before her, was not of a quality and sufficiency to find that she was impecunious. The sheriff's own drafting of the stated case indicates that the financial information provided orally was given with the caveat "as far as she could recall". The sheriff gives no basis for saying "She was emotionally and financially in dire straits" and "would not have been able to pay up front for any alternative transport. She was impecunious." It is clear from the sheriff's note that she made the finding based upon the pursuer's evidence and that alone. The sheriff therefore fell into error by finding that the pursuer was impecunious because the pursuer herself said so. In the absence of vouching this is a flawed approach to the issue of what evidence is required to prove impecuniosity. I will therefore answer the question of law 1 in the negative.

 

46.         I now turn to the first ground of appeal relating to the status of the exchange of e-mails relating to settlement.

 

47.         The first ground of appeal is in the following terms:-

"The sheriff erred in law in reaching the decision that the correspondence between parties agreeing a 50/50 split on liability amounted only to an extra judicial admission by the pursuer."

 

48.         The sheriff deals with this point in Findings in Fact 10 - 14a. It appears to me that Finding in Fact 10 has some relevance to this issue although it is difficult to know what relevance the quantum aspect may have if the point is truly whether there is an agreement to split liability on a 50/50 basis and whether this agreement is binding.

 

49.         It appears that the sheriff's reasoning conflates the issue of the agreement with the question of expenses. The sheriff's reasoning is not clear but it does appear that she takes the view that this was an extra judicial admission or agreement and that there was no consensus in idem. I confess to finding the sheriff's reasoning difficult to follow. The Sheriff somewhat glosses over the submissions on the correspondence and reaches the conclusion that there was no consensus in idem. However, she heard the parties prior to and during proof and she appears to form the view that there was no agreement as to the settlement figure on the morning of proof despite the defenders' assertion that the matter had settled. She appears to draw a distinction between a pre -litigation agreement and a binding agreement to settle. Although her reasoning is not apparent to me there is indeed a clear difference between an agreement to settle without resort to litigation and whether that has effect once an action has been commenced.

 

50.         In my view therefore there is a distinction to be drawn between an informal agreement to settle extra judicially and the effect that agreement may have in the event of litigation. It is not a trite point that the parties to any purported agreement are not the same parties that engaged in this litigation. Clearly, it is known from the discussion in the cases on credit hire charges (supra) that one of the benefits for a pursuer is that the credit hire company assumes responsibility for recovery of the charges on behalf of the pursuer. Nevertheless, this is not a case where there has been subrogation of the pursuer's right to claim damages. Thus the parties to the purported agreement are not the same as the parties to the litigation and although I find the reasoning of the sheriff unsatisfactory on this point I cannot say that she has plainly erred and I propose to answer the question of law 2 in the affirmative quoad the action before the sheriff.

 

51.         It follows from my opinion on the second and principal ground of appeal that question 3 also falls to be answered in the negative.

 

52.         I will accordingly, allow the appeal, dismiss the action there being no evidence entitling the sheriff to grant decree as claimed by the pursuer. Further, in view of the sheriff's failure to make any findings on the evidence of Mr Sadler on "spot rates "there is no basis on which I can grant decree for any other lesser sum. Expenses will be awarded to the successful appellants and I also certify the cause as suitable for the employment of junior counsel in respect of the appeal.