ALISTAIR GREIG v (1) KEVIN WALLACE ALEXANDER DAVIDSON and (2) IAIN STUART WILSON
OUTER HOUSE, COURT OF SESSION
[2015] CSOH 44
A224/13
OPINION OF LORD STEWART
In the cause
ALISTAIR GREIG
Pursuer;
against
(1) KEVIN WALLACE ALEXANDER DAVIDSON and (2) IAIN STUART WILSON
Defenders:
Pursuer: Thomson; Brodies LLP
Defenders: Paterson; CMS Cameron McKenna LLP
21 April 2015
[1] This ordinary action for payment called on the procedure roll for a debate on both parties’ preliminary pleas on 12 February continued to 13 February 2015. The debate took place on the closed record dated 2 September 2014 no 11 of process. I made avizandum and have now decided to allow a proof before answer on the whole of the parties’ respective averments reserving the question of relevancy.
Background and summary of the issues
[2] The defenders are the surviving partners of KWAD Solicitors, Aberdeen. In March—April 2008 KWAD concluded three sets of missives on behalf of Alistair Greig the now pursuer for the purchase off plan of three houses at The Park development, Pittodrie, Aberdeen. When the date of entry arrived on 19 December 2008 Mr Greig failed to pay the purchase prices. The developers rescinded the missives on three separate dates in 2009 and 2010. The developers then sued Mr Greig for damages for breach of contract in Peterhead Sheriff Court. The initial proof was restricted to liability. Mr Greig’s defence in the sheriff court was that he was not contractually bound because KWAD had acted without his authority in concluding missives. The learned sheriff found that there had been authority to transact, that Mr Greig was in breach of contract and that the developers were entitled to rescind the missives in each case. He also found Mr Greig liable for any losses incurred by the developers and continued the cause for further procedure. The action was settled by payment to the developers in the sum of £125,000. Mr Greig now sues the former partners of KWAD, the current defenders, for that sum and for legal expenses incurred, a total sum of £192,972.42 with interest.
[3] In the present action Mr Greig now the pursuer avers that he did not instruct the defenders to act for him in the matter, far less to enter into missives; and that by doing so without authority they caused him the loss for which he now seeks reparation. This is his primary basis of claim. He states an alternative basis of claim, introduced by the words: “Separatim esto the defenders had been instructed by the pursuer to conclude missives on his behalf (which is denied)...” The alternative case continues to the effect that the defenders were in breach of their professional duties of care to the pursuer with the result that they negligently concluded missives in terms that were not agreeable to the pursuer and caused the pursuer the loss for which he now seeks reparation.
[4] The interest of the case lies in the identity of the middle-man from whom the pursuer acquired “reservations”, if that is the right word, on the properties. The pursuer paid a total of £15,000 to this intermediary. The intermediary was Purplesky.com LLP. Purplesky belonged to Keith Ingram a former partner in KWAD. At the time Keith Ingram was also said to be a consultant with or in or employed by KWAD and worked from their office. (The pleadings say “employed by” but I would be sceptical about that and on the information to hand neither counsel can confidently state what the true position was and more specifically in what sense, if any, Mr Ingram was an agent of KWAD.) Mr Ingram was the only person in the office who had direct dealings with the pursuer. The defenders claim that they received the pursuer’s instructions via Mr Ingram. In the sheriff court Keith Ingram testified that he had not received and did not pass on the pursuer’s instructions to purchase the properties. The learned sheriff rejected Mr Ingram’s evidence—a mysterious business all round.
[5] As is correct, the defenders’ preliminary plea is argued first. Mr Paterson for the defenders moves me to sustain the defenders’ general preliminary plea and to dismiss the action; or, failing dismissal, to exclude the esto case from probation. He supports the motion with submissions as to (1) the irrelevancy of the inconsistent, alternative averments on which the claim is based and (2) the irrelevancy of the averments about causation of loss in the alternative case. During the course of the argument Mr Paterson develops a submission that (3) the pursuer’s case as a whole must fail on the weaker alternative rule, the alternative case being irrelevant because of the failure to grapple with causation [note of argument for the defenders no 14 of process and note of averments to be deleted no 16 of process]. Mr Thomson for the pursuer opposes the pursuer’s motion and moves me in turn to sustain the defenders’ preliminary plea to the effect of excluding from probation the defenders’ averments supporting the defences on the merits and quoad ultra to allow a proof before answer reserving all pleas. Such a proof would be restricted to quantum of damages. Mr Thomson does not press the argument that decree de plano should be granted [pursuer’s note of argument no 13 of process and note of averments to be deleted no 15 of process].
Alternative and inconsistent averments of fact
[6] Mr Paterson’s submissions on the first point boil down to this: it cannot be in the interests of justice to allow a claimant to say on the one hand: “I did not give instructions: but if I am lying and I did give instructions the defenders made a mess of my instructions.” These are flagrantly inconsistent stances. The propositions which Mr Paterson derives from the authorities are these: there is no general rule permitting claims to proceed on alternative and inconsistent averments of fact; the determining issue is whether it is in the interests of substantive justice to allow inconsistent claims to go to forward; and the court is more easily persuaded to allow inconsistent claims to proceed where ignorance on the part of the pursuer as to the true cause of action is justifiable [T Welsh ed, Macphail on Sheriff Court Practice, 3rd edn (SULI, Edinburgh, 2006), §§ 9.35―9.36; London & Caledonian Marine Insurance Co v Edinburgh Shipping Co (1867) 5 M 982 at 985―986 per Lord Benholme, at 986 per Lord Neaves, at 987 per Lord Justice-Clerk; Cass v Edinburgh & District Tramways Co Ltd (1908) 15 SLT 957 at 958; Clarke v Edinburgh & District Tramways Co Ltd 1914 SC 775 at 780―781 per Lord President; Smart v Bargh 1949 SC 57 at 61―62 per Lord President; M v M 1967 SLT 157 at 158; Safdar v Devlin 1995 SLT 530 at 535C―535I; Royal Bank of Scotland Plc v Harper Macleod 1999 SLT (Sh Ct) 99 at 102B―E]. Mr Paterson submits that the correct ratio of Safdar is not that the pursuer’s alternative case was stated as a retort to the defender’s late change of front. It is more that the pursuer was in justifiable ignorance of the supposed facts constituting the newly contrived defence. In the present case, did Alastair Greig give instructions or didn’t he? He must know. It is not in the interests of justice, says Mr Paterson, to allow Mr Greig’s inconsistent averments to go to proof.
[7] In reply Mr Thomson cites, in addition, Maclaren [J Maclaren, Court of Session Practice (Edinburgh, 1916)] at page 311: “The pursuer may state alternative grounds of action which are inconsistent with each other; but if not alternative the averments must not be self-contradictory.” The same point is made, with more elaboration extending into discussion of the “weaker alternative” question, by Sheriff Dobie [W Dobie, Law and Practice of the Sheriff Courts in Scotland (Edinburgh, 1952)] at 158]. The statements of the rule by Maclaren and Dobie were endorsed, Mr Thomson submits, by the Lord President (Cooper) in the case about one of the famous Carbeth huts, Smart v Bargh [above] at 61. I note however that the Lord President added: “But equally it appears to me that the Court must always retain supervision and control over the extremer types of case... in which it would plainly be incompatible with substantial justice to the opposite party that a case should be allowed to proceed on such inconsistent averments and without the party making those averments being forced to choose between the alternative cases he seeks to make.” The Lord President’s “But equally” introduces a note of equivocation.
[8] Two factors, according to the Lord President in Smart [above] at 61, make it “easier” for the Court to allow proof of “alternative cases based on inconsistent averments”. The Lord President’s factors are: (1) where there is justifiable ignorance of the true state of affairs; and (2) where the averments are the defender’s (for the pragmatic reason that otherwise the defender might fall foul of the rule requiring all competent defences to be put forward at the same time). My reading of this qualification is that it applies to control what the Lord President called “extremer cases”. Putting the Lord President’s “but equally” qualification in context by looking at the whole case report including the arguments of the parties, I think that the general rule is as I state it below.
[9] I observe that in some ways the fact situation in Safdar v Devlin [above] is the mirror image of the situation in the present case. In Safdar the missives were allegedly defective. The primary claim in Safdar was for professional negligence. The last-minute defence was that the missives had been dictated by the client’s husband. The pursuer then stated an alternative case that, esto the client’s husband had dictated the missives, the solicitor subsequently adopted them and became liable for the defects in that way. The Lord Ordinary allowed a proof before answer. In the present case the pursuer has pled his primary claim (no authority to transact) and his alternative claim (negligence) together, at the outset: but this is understandable since he knows and knew in advance what the first line of defence would be. The alternative case is a predictable retort to the expected defence. Mr Thomson submits with reference to Safdar that the deciding factor cannot be the point in time when the alternative case is pled (cf. M v M [above] at 158).
[10] I have looked at the case cited by Maclaren for the proposition that “if not alternative the averments must not be self-contradictory”, M'Sourley v Magistrates of Paisley 1910 SLT. M'Sourley was a claim for personal injury caused by the collapse of a stand at the Paisley races, the stand having been erected by a volunteer committee, averred to be lessees of the common good ground vested in the magistrates. The ratio of Lord Kincairney’s opinion at 88―89 is [emphasis added]:
“On the whole, I am of opinion that the magistrates are not liable in damages for the injury caused to the pursuer, either because the stand was erected on their property, or because it was erected by their tenants, or because of any duty in the matter lying on them as magistrates at common law, or imposed by statute. These are the whole grounds of action disclosed by the original condescendence…. But the pursuer has made a most important addition to his record on revisal. It comes to this—that the defenders are liable because the committee who erected the stand did so as the defenders' agents, and because they received the whole profits, meaning, I suppose, the entry money. Now, I cannot deny that these are relevant averments, or that the defenders may be liable if the stand was erected either by them or their agents, and if the action had been laid on that ground only, I would have allowed an issue. But my great difficulty lies is this, — that this new averment not only introduces a totally new ground of action, but is totally inconsistent with, and contradictory of, the former ground of action. If the committee were the defenders' lessees, they were not their agents, and if their agents, then not their lessees; but the original statements as to a lease have been left standing, and this new averment that the committee were the agents of the defenders is not introduced as an alternative. It appears to me that two entirely inconsistent grounds of action are stated side by side, so that I find it impossible to say on which statement the action is rested. In these circumstances, I have come to the conclusion, I admit with hesitation, that this case is badly pleaded and that I cannot send the case to a jury on the record as it stands.”
So, I infer, the primary proposition might be re-stated in this way: inconsistent averments may be tabled, provided they are presented in the alternative. Mr Thomson submits that the general rule is that it is permissible to state alternative and inconsistent cases, if otherwise relevant, unless it is incompatible with substantial justice to do so. In my opinion this is correct.
[11] Mr Thomson’s argument continues that if it be open to the defenders to defend themselves by proving authority to act, then it is in accordance with “substantial justice” that the pursuer should be allowed to lay his case on the basis that the defenders did not implement their supposed instructions with ordinary professional care. In this respect, according to Mr Thomson, the present case is in point of principle on all fours with M v M [above]: the husband tried to annul the marriage on the ground of non-consummation because of the wife’s “impotence”; and when the wife replied that the husband’s impotence was the reason, the husband retorted, “alternatively and esto...”, that his own impotence was an equally good ground for annulment. The Lord Ordinary allowed a proof before answer. (I observe that the action was one of status so that decree could not be granted without inquiry.)
[12] Returning to the present averments, the words which introduce the alternative case are: “Separatim esto the defenders had been instructed by the pursuer to conclude missives on his behalf (which is denied)... “ Loosely translated this can be read as “Separately and alternatively, supposing that the defenders had been instructed by the pursuer to conclude missive on his behalf (which is denied)...” My observation is that the pleader at this point enters the territory of what grammarians might call the “hypothetical (unreal) past conditional”. This is the realm of “counter-factuals”, to use the modern parlance, the realm where they talk of nothing else but the length of Cleopatra’s nose and such like. In my view it distorts the meaning of the quoted averment to read it as: “If I am lying...” At the same time I observe that the pleader could have brought out the sense more effectively with an averment focusing on what may or may not have been in the defenders’ minds, along the lines of: “Separatim esto the defenders proceeded on the basis that they had authority to transact on the pursuer’s behalf... “
[13] As a matter of impression it is not helpful to the pursuer’s cause that he did not challenge the missives with a plea or counterclaim for reduction ope exceptionis in the sheriff court; it is not helpful that he did not give evidence on oath on his own behalf to the learned sheriff; and, possibly, it is not helpful that he did not appeal the learned sheriff’s decision on the merits—the learned sheriff refused leave to appeal the merits and the case was settled before final judicial determination. On the other hand it would be incorrect to judge the relevancy of the pursuer’s pleadings on the basis of an unhelpful impression. The pursuer does not know, except by report, precisely what happened between Mr Ingram and the defenders; and he does not know what was in the defenders’ minds when they transacted or purported to transact on his behalf.
[14] The defenders stop short of making a categorical assertion that they had the pursuer’s authority to contract on his behalf. Mr Paterson explains this by saying that all they know is what they were told by Mr Ingram. What they were told, according to the defences, is “that the pursuer had confirmed to Mr Ingram his instructions to proceed with missives for the properties.” There may have been a breakdown in communication or—I don’t know—scope for misinterpretation. Mr Paterson tells me that the defenders’ position is that Mr Ingram is “lying” when he testifies on oath that the pursuer did not give instructions. A possibility not adverted to in the pleadings is that Mr Ingram may have passed on the wrong message and done so knowingly. There was potential for conflicts of interest. I note the learned sheriff’s observation that there was “a general air of discomfort on the part of those witnesses who gave evidence about the creation of the agreement [between the developers and Purplesky]” relating to the “astonishing level of commission provided for in the agreement.”
[15] In Smart [above], the Lord President mentioned two factors which make it easier for the Court to allow alternative and inconsistent cases to go to proof. I think there may be a third factor, namely where sharp practice is alleged or hinted at, above all where members of the legal profession could be implicated. Mr Paterson says: “It is unjust to allow a party to run an alternative case that he knows to be untrue.” I have to agree: but I cannot know at this time that the pursuer is running “an alternative case that he knows to be untrue”. Of course, if the pursuer is “lying”, as Mr Paterson puts it, and if the pursuer is tempted to do so on oath, then he should be advised, if he has not already been given this advice, that there is a risk of the case being reported for possible prosecution for perjury. My conclusion is that it is not contrary to the substantive justice of the situation to allow the pursuer to try and prove both his cases.
The relevancy of the pursuer’s averments as to causation
[16] Mr Paterson also complains that the pursuer’s pleadings do not give fair notice of the causal connection between the defenders’ alleged breach of duty and the pursuer’s claimed loss. In this connection he refers to Jamieson v Allan McNeill & Son WS 1974 SLT (Notes) 9; Kyle v Stormonth Darling WS 1993 SC 57 at 66E—67E and 69G—70B per Lord McCluskey delivering the Opinion of the Court; McGeadie v Bhateja and Anr [2013] CSIH 106 at [12] per Lord Drummond Young delivering the Opinion of the Court. The pursuer’s averments detail five conditions that the pursuer would have insisted on if consulted about the missives. Mr Patterson says that the reader is left in ignorance as to whether—if the pursuer’s instructions had been given as detailed and had been acted on by the defenders—there would have been a bargain with the developers, or a different bargain and, if a different bargain, what the loss would have been. (The “conditions” are not like qualifications appended to an offer to purchase, more like pre-conditions of the pursuer’s involvement in any transaction to do with the development properties in any guise: but parties concur in using the term “conditions”.)
[17] Mr Thomson replies that the conditions are cumulative. With these five conditions built in there would have been three possible outcomes: first, the developers would not have agreed to the conditions, in which case there would have been no contract and no loss; or, secondly, that the developers would have agreed the pursuer’s conditions and would have purified them, in which case there would have been no loss to the pursuer personally, because the first of his conditions is that any contract was to be concluded in the name of the pursuer’s property company AJZ Properties and Holiday Lets Ltd; thirdly, the developers would have agreed the conditions but would have been unable to purify them, in which event there would have been no loss. Mr Thomson continues that there is no need to ponder the outcomes supposing the conditions had been fulfilled because the pursuer would not have been a party to the contract. Adequate notice is given of the causal connection. The defenders cannot have difficulty in knowing the case made against them.
[18] On the whole I prefer Mr Thomson’s argument. The issue is not about instructions actually given: the issue is whether the defenders should have sought confirmation from the pursuer directly, whether the defenders should have sought specific instructions and what would have happened if specific instructions had been sought and given. There is adequate notice. In relation to the question of company involvement, the pursuer may be able to prove that his dealings always involved submitting missives in the name of his company without a personal guarantee, as opposed to simply taking title in the company’s name and, if that were so, it might well enhance his case. On the other hand I am not sure that it necessarily follows in a claim of this kind that, if the company were to have sustained the loss, it can be assumed that the company owner would have suffered no loss personally. Parties have not discussed this point.
The weaker alternative rule
[19] Mr Paterson goes on to submit that, because the alternative case fails to grapple with causation, the alternative case is irrelevant in law; and that where a claim is premised on alternative averments of fact and one of the alternatives is irrelevant the rule is that the whole claim must fail. This is the so-called “weaker alternative rule”. Mr Paterson looks for support to T Welsh ed, Macphail on Sheriff Court Practice, 3rd edn (SULI, Edinburgh, 2006), § 9.36; Murray v Wylie 1916 SC 356 at 360—361 per Lord President; Haigh & Ringrose Ltd v Barrhead Builders Ltd 1981 SLT 157 at 157, col 2. Mr Thomson protests that no notice of this “weaker alternative” submission is given in the pursuer’s note of argument and that the submission should not be entertained. He further submits that if the alternative case is irrelevant the proper course is simply to exclude the alternative case from probation allowing the primary case to stand. I agree with this latter submission.
[20] The weaker alternative rule is capable of being misunderstood, as it was apparently by the defenders in Haigh [above]. The logic of the rule is this: someone who will not commit to proving the truth of a relevant factual basis for his or her claim cannot insist on what might turn out to be a pointless fact-finding inquiry. The deficiency struck at by the weaker alternative rule lies in the refusal to choose between relevant and irrelevant bases of claim; and it is this that sabotages the claim as a whole. The insistent equivocation of the thrawn pursuer in Murray, or of his thrawn though eminent counsel, was what doomed that claim to dismissal [above at 361 per Lord President; at 364 per Lord Skerrington].
[21] In the present case the admittedly relevant primary case is unequivocal and the alternative case is a contingent one, proceeding expressly and under protest on the disputed hypothesis which is the primary defence. The weaker alternative rule does not apply; the action cannot be dismissed by application of that rule; and since I have held, in any event, that the alternative case is not irrelevant, neither shall I exclude the alternative case from probation.
The relevancy of the defence on the merits
[22] Mr Thomson for the pursuer, arguing in his turn the pursuer’s preliminary plea, moves me to exclude from probation and delete the defenders’ averments on the merits, that is, as regards the primary case, the averments bearing on the defenders’ authority to transact on the pursuer’s behalf and, as regards the alternative case, the averments about the defenders’ fulfilment of the professional duties of care owed by them to the pursuer. Mr Thomson also submits that the defenders’ averments at 12D—E and 12E of the closed record about the correctness of the learned sheriff’s judgment are irrelevant and should be excluded from probation and deleted.
[23] As regards the answer to the primary case, there is, as I have said, no clear offer on the defenders’ part to prove that they did have authority or instructions to transact, notwithstanding the pursuer’s calls for further specification [record, no 11 of process, 8E, 9A―B, 10E]. An irrelevant defence, says Mr Thomson. There is a defence to the secondary case but it is simply: “Admitted that certain duties were incumbent upon KWAD under explanation that they fulfilled all such duties.” Hopelessly inspecific, says Mr Thomson. I acknowledge that Mr Thomson’s arguments are not without merit but I am going to reject them.
[24] During the debate Mr Paterson tells me that the pursuer instructed the defenders to conclude missives on his behalf. Why is there no categorical averment in terms? Instead the defenders confine themselves to pleading bits and pieces of evidence including the import of Mr Ingram’s file note [closed record no 11 of process, 9B]: “The file note stated that the pursuer had confirmed to Mr Ingram his instructions to proceed with missives for the Properties.” This file note is hearsay: but, if authenticated and depending on interpretation, it may be primary evidence of the essential facts as part of the res gestae [O’Shea v H M Advocate [2014] HCJAC 137]; and even as secondary evidence, it could well be habile to prove the essentials of the defence [Civil Evidence (Scotland) Act 1982 s. 2; Cumbernauld Housing Partnership Ltd v Clark [2015] CSIH 22 at [31] per Lord Brodie delivering the Opinion of the Court]. There is also, for what it is worth―not a point focused by the parties― a general denial of the pursuer’s primary case [record no 11 of process, 8E]. With some hesitation and without approving the defenders’ approach to pleading, I conclude that the whole averments made in answer to the primary case are, if proved, capable―or at least not incapable―of supporting the inference that the pursuer as an individual, through Keith Ingram, authorised the defenders to transact on his behalf. (The defenders may think― I should be surprised if the pursuer accepts this―that because the defences refer to the sheriff court judgment “for its whole terms” it is open to lead evidence of all the facts and circumstances which supported the learned sheriff’s conclusion.) I do not have to decide whether, as Mr Thomson submits, on the averments as they stand, the defenders can cross-examine the pursuer to the effect that he is a liar. The pursuer has been put on notice of a possible difficulty.
[25] As regards the defence to the secondary case, I am persuaded that the defenders’ formulaic explanation that they “fulfilled all duties all such duties [as were incumbent on them]” does not require to be deleted. As Mr Paterson points out the deletion would leave standing the general denial of breach of duty; there are genuine questions about the facts; and the defenders are entitled to put the pursuer to his proof on this question [McManus v Speirs Dick and Smith Ltd 1989 SLT 806 at 807L and 808E]. My decision on the matter involves, as Mr Paterson understands, that the inspecific averment, because it has been challenged and allowed to go to proof conditionally, may preclude the defenders from opening specific, positive lines of evidence.
[26] I agree that the averments about the learned sheriff’s judgment which Mr Thomson wants me to blue pencil are irrelevant. Indeed many more averments about the proceedings in the sheriff court―on both sides of the case―are strictly irrelevant and superfluous: but, so long as this is understood, it is not inexpedient and does no injustice to allow the superfluous averments to stand on record.
Conclusion
[27] The outcome follows from the decisions made above. The pursuer’s first plea-in-law, the plea to the relevancy of the defences, falls to be repelled. For the rest I shall allow a proof before answer of the whole averments reserving the defenders’ plea to the relevancy, that is the defenders’ first plea-in-law. I shall hold over all questions of expenses in the meantime while indicating that my inclination would be to make the expenses of and relative to the procedure roll hearing expenses in the cause.