Scottish Court of Session Decisions

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
	[2013] CSIH 99
	P1217/12 OPINION OF LADY SMITH in the Petition of MARTIN AND CO (UK) LIMITED Petitioners; for An order under section 1 of the Administration of Justice (Scotland) Act 1972 _______________

Act: A Smith, QC; Simpson & Marwick

Alt: Sandison, QC; Brodies LLP (fourth respondent)

20 November 2013

Introduction

[1] This case concerns a company having sought the assistance of the court to recover documentary evidence for the purpose of proceedings likely to be brought in relation to the termination of certain franchise agreements that are said to have existed between the petitioner and the second and third respondents. The franchises relate to the management of property.

[2] On 20 September 2013, the fourth respondent marked a reclaiming motion for review of the Lord Ordinary's interlocutor of 11 September 2013. The Lord Ordinary refused leave to reclaim. On 30 September, the petitioner lodged a note of objection to the competency of the reclaiming motion; the interlocutor of 11 September 2013 was not, it is said, a final one and cannot, accordingly, be reclaimed against without leave (Rule of Court 38.2(1)).

Background

[3] On 15 November 2012, the petitioner presented a petition for recovery of the documents under and in terms of Section 1 of the Administration of Justice Act 1972 ("the 1972 Act"). The documents sought were specified in a schedule. On that date, the petitioners sought and obtained orders for intimation and service and also for commission and diligence in terms of the prayer of the petition. Senior counsel, D I Mackay QC, was appointed Commissioner to execute the order for recovery. The respondents include Carrie Little and Kenny Stenhouse, the first and fourth respondents.

[4] The court's order, as confirmed by interlocutor of 16 November 2012, included authority to enter certain specified premises and required both messengers-at-arms and the police to aid the Commissioner in the execution of the order.

[5] The Commissioner attended at premises specified in the order on 15 November 2012. It is alleged that when he did so, the fourth respondent and Graham Main deliberately obstructed the Commissioner in his execution of the commission in various respects. Those allegations were brought before the Lord Ordinary (Lord Drummond Young), on 23 November 2012, when a report from the Commissioner was before the Lord Ordinary. Counsel for the petitioners moved that the fourth respondent and Mr Main both be found to have been in contempt of court. The petitioner was, accordingly, ordered to lodge a minute in process, detailing the alleged contempt of court. Such a minute was duly lodged and answered with denials that any contempt of court had been committed. The minute and answers form nos 8,10 and 11 of process.

[6] On 18 December 2012, the case called By Order before Lord Drummond Young. He pronounced an interlocutor which included the following:

"Continues the cause By Order in respect of the Contempt of Court proceedings to a date to be afterwards fixed, said date to be within the middle of January 2013 and before another Lord Ordinary".

[7] The contempt matter next called on 5 February 2013, before Lord Tyre and parties were allowed 6 weeks to adjust the minute and answers. No adjustments have been lodged. There have not, as yet, been any further proceedings in relation to the allegation of contempt of court. The issues raised by the minute and answers have yet to be determined. That is a matter to which I shall return.

[8] The proceedings in relation to the recovery of documents ordered by the court have not been straightforward as is evident from the interlocutors. By interlocutor of 1 February 2013 , the first respondent (who is the partner of and lives at the same address as the fourth respondent) was found liable to the petitioner in the expenses of process to that date, on an enhanced scale - on an "agent and client, client paying" basis. By interlocutor of 5 February 2013, the Lord Ordinary made an interim award in relation to those expenses, in the sum of £50,000. The petitioners have sought to enforce that award but following their attempt to do so the first respondent declared herself bankrupt.

[9] The issue of expenses was returned to on 11 September 2013. On that date, the fourth respondent was found liable to the petitioner in the expenses of process. The Lord Ordinary refused in hoc statu (a) the petitioner's motion that those expenses be awarded on an agent/client, client paying basis, and (b) the petitioner's motion that the fourth respondent be found liable to make an interim payment of expenses. The fourth respondent sought and was refused leave to reclaim against that award of expenses.

[10] At the hearing on 11 September, senior counsel for the petitioners stated that, so far as practical recovery of the documents specified in the schedule to the petition was concerned, that exercise was exhausted. He did not, however, concede that the process was at an end.

Hearing on Competency

Submissions for the Fourth Respondent

[11] Senior counsel for the fourth respondent, Mr Sandison QC, said that it was apparent from what had been said on behalf of the petitioner at the hearing on 11 September, that they did not consider that any further procedure was necessary.

Regarding the contempt matter, there had been no substantive procedure in relation to it for many months.

[12] In all the circumstances, the interlocutor of 11 September disposed of the whole merits of the cause. The test was whether or not it could be said that a further order would certainly be necessary; that was not something which could, as at 11 September, be said.

[13] In support of his submission that the test was one of whether a further order is certainly necessary, he referred to Robertson Petitioner (No. 1) 2010 SLT 143. The present case was, he submitted, a stronger one than Robertson, where the possibility of a requirement for further procedure had been expressly foreseen in the interlocutor which was held to have disposed of the whole merits of the cause. He also referred to the case of McGuinness v Bremner plc 1988 SLT 340 and submitted that it showed that it was not open to the fourth respondent to engineer circumstances which would, with clarity, have enabled him to reclaim by, for instance, enrolling a motion for dismissal of the petition.

[14] The subject matter of this cause was, he submitted, whether or not there should be a Commission and Diligence granted for the recovery of specified documents, its purpose had been exhausted.

Submissions for the Petitioner

[15] Senior counsel for the petitioner, Mr Smith QC, began with some general observations. This was an attempt to reclaim against a ruling on expenses, a matter which would not normally be susceptible to review. Lord Drummond Young had refused leave to reclaim and, when doing so, had stated that he was concerned about the delay that might arise and which would, potentially, only be to the prejudice of the petitioner in trying to enforce the award of expenses. He had also made it clear that, once the outcome of the minute for contempt was known, it would be open to the petitioner, if so advised, to re-enrol their motion that expenses should be awarded on a higher scale and for an interim payment.

[16] In all these circumstances, it would be highly undesirable if the Outer House business were to be interrupted now by a reclaiming motion. It was not at all surprising that Lord Drummond Young had refused leave.

[17] Regarding the case of Robertson, it was a petition under section 459 of the Companies Act 1985 and that was a different type of process. The process in the present case was essentially sui generis. Petitions under section 1 of the 1972 had unusual features.

[18] Further, Robertson was not authority for the proposition that unless it can be said that further orders will certainly be necessary, an interlocutor will always be held to have disposed of the whole subject matter of the cause; there were many cases in which there was only a possibility of further orders where it could not be said truly, in the round, that the whole subject matter of the cause had been disposed of.

[19] Regarding the case of McGuinness, as was evident from the discussion in the annotation to RC38.1, it was not incompetent for a party to reclaim from an interlocutor pronounced on his own motion. However, if the fourth respondent were to enrol for dismissal of the present petition that motion would be opposed on the basis that the issues raised by the Minute for contempt of court have not yet been determined.

[20] Regarding the present case, whilst the petitioner accepted that the end of the road had been reached so far as document recovery was concerned, the contempt issue had yet to be determined. He referred to the allegations set out in the minute by way of seeking to demonstrate that the issue was a serious one and it had to be adjudicated upon. The court had an interest and should be concerned regarding the allegations made. The whole subject matter of the cause had not been disposed of by the interlocutor of 11 September.

[21] Mr Smith referred to the case of Apollo Engineering Ltd v James Scott Ltd 2013 UKSC 37 as being a recent discussion by the Supreme Court of how to approach the analysis of an interlocutor when determining whether or not leave to appeal is required albeit under reference to section 40 of the Court of Session Act 1988.

[22] Mr Smith explained that the background to the petitioner's motion that the fourth respondent be found liable in expenses - after the first respondent had declared herself bankrupt - was that they relied on material which demonstrated that he was the "prime mover" for whom the first respondent had been a "front".

[23] In the circumstances, the note of objection was, he submitted, well founded and, leave being required but not having been granted, the reclaiming motion should be held to be incompetent.

Discussion and Decision

[24] Rule of Court 38.2(1) provides:

" 38.2. - (1) An interlocutor disposing, either by itself or taken along with a previous interlocutor, of -

(a)  the whole subject-matter of the cause; or

(b)  the whole merits of the cause whether or not the question of expenses is reserved or not disposed of,

may be reclaimed against, without leave, within 21 days after the date on which the interlocutor was pronounced."

Parties were in agreement that it is subparagraph (a) of that rule which is relevant in the present case. "Cause" is defined in rule 1.3 as being "any proceedings". It is, as was observed by Lord Hope of Craighead, at paragraph 23 of the Appollo Engineering Ltd case, a "word of wide ambit".

[25] The fourth respondent lodged a motion for review of the Lord Ordinary's interlocutor of 11 September, nine days later, on 20 September. Time is not an issue. The issue that arises is whether, in the circumstances, the fourth respondent is entitled to reclaim the interlocutor at all, leave to do so having been refused. To put it another way, did the interlocutor of 11 September dispose of the whole subject-matter of the cause?

[26] I am satisfied that it did not do so, for two reasons.

[27] The first reason relates to the outstanding allegations of contempt of court which are:

" ...the name given to conduct which challenges or affronts the authority of the Court or the supremacy of the law itself, whether it takes place in or in connection with civil or criminal proceedings. The offence of contempt of court is an offence sui generis and it is peculiarly within the province of the court itself, civil or criminal as the case may be, to punish it under its power which arises from the inherent and necessary jurisdiction to take effective action to vindicate its authority and preserve the due and impartial administration of justice [see HMA v Cordiner 1973 SLT 125 at 126]." (HMA v Airs 1975 JC 64 @ 69 per Lord Justice-General Emslie).

[28] An allegation of contempt of court is, accordingly, of itself, a matter of some substance and it may take place and be dealt with, within pre-existing proceedings. Further, it is clear, from reading the allegations contained in the minute no.8 of process that the allegations made in this case - which are insisted on - are serious ones and go to the heart of the implementation of the court's orders in relation to the original purpose of this petition. If they are well founded, they would seem to demonstrate clear attempts to frustrate that purpose and to flout the authority of the court.

[29] It has long been the case that an allegation of contempt of court may be determined by and punished by the Lord Ordinary within the process in relation to which it occurs, particularly where there is a close relationship in time and/or place between the relevant litigation and the conduct that is said to have amounted to contempt. Separate proceedings are not required (see: HMA v Airs; Robertson and Gough v HMA 2008 JC 146, per Lord Osborne, at paragraph 42). There are circumstances where it may be considered appropriate that another judge determine the matter, such as where the contempt has been directed at the judge himself, as discussed in Robertson and Gough, but that does not involve the institution of separate proceedings, as exemplified in the present case. The minute and answers relating to the contempt allegation are parts of the petition proceedings. They form part of the same process, they have been treated as an aspect of the petition proceedings and the fact that Lord Drummond Young decided to direct that the resolution of the contempt issue be determined by a judge other than himself does not mean that fresh or separate proceedings were instituted.

[30] On the contrary, when the allegation of contempt was brought before the court on 23 November, it did so as part of the same proceedings and thus became part of the subject matter of the same cause, as defined in rule 1.3. The subject matter ceased being solely the issue of whether or not the court should grant orders to assist in the recovery of evidence; the issue of whether or not the fourth respondent and/or Mr Main had conducted themselves in a manner which frustrated or sought to frustrate the petitioner's objectives and so as to amount, in the circumstances, to a contempt of court became as much a part of the subject matter of the cause as those matters covered by the averments in the original petition. Neither it nor the question of what sanction should be imposed if contempt of court did occur, have as yet been determined.

[31] Secondly, properly understood, the terms of the interlocutor of 11 September and the circumstances in which it was pronounced demonstrate such interdependency between the contempt issue and the original subject matter of the petition - recovery of documents - as to show that it did not dispose of the whole subject matter of the cause. The court's final view on expenses was, in the circumstances, being deferred until the outcome of the contempt of court minute was known.

[32] I do not accept that the determination of whether or not an interlocutor disposes of the whole subject matter of the cause is simply a matter of asking whether or not it can certainly be said that no further order will be necessary, as submitted by Mr Sandison. I say that for two reasons.

[33] First, whilst on the facts of Robertson, it could be said of the interlocutor which was held to have disposed of the whole subject matter of the cause that further orders were not going to be certainly "necessary", the court did not articulate the test as Mr Sandison would have had this court do. The point appears, rather, to have been that, looking at matters as a whole, the earlier interlocutor did not entail any deferment of the whole merits of the cause and therefore had disposed of the whole subject matter and that, further and perhaps most importantly, the interlocutor against which the respondents were seeking to reclaim without leave - a later interlocutor making "no further order" - was not in any sense dispositive of any issue in the case at all.

[34] Secondly, the relevant question is, simply, whether or not the interlocutor under consideration either by itself or taken along with earlier interlocutors disposes of the whole subject matter of the cause. There is no need nor, indeed, any legitimate justification for importing another legal test of "no further orders being certainly necessary" which is what Mr Sandison's submission, ultimately, amounted to. The question that has to be addressed when considering whether or not the interlocutor falls within RC38.2(1)(a) or not is one of fact and it will always be a matter of looking at and deciding the matter on the basis of the whole facts and circumstances of the individual case. Support from that straightforward interpretation and application of the relevant rules of court can be gained from the approach of the Supreme Court in the Appollo Engineering Ltd case where, at paragraph 27, Lord Hope, having considered the whole circumstances, stated:

"On balance, however, I think that it would be more correct to regard it as a judgment "on the whole merits of the cause" within the meaning of section 40(1)(a) of the 1988 Act, even though the Inner House did not address itself to the issues raised in the stated case."

and whilst that was a conclusion on the application of section 40(1)(a) of the Court of Session Act 1988, there would seem to be no reason in principle for not adopting a similar approach when deciding whether or not an interlocutor disposes of the "whole subject matter of the cause" .

[35] In the present case there can, in any event, be no doubt that there is a need for further orders. Quite apart from any further consideration of expenses, orders will be required in relation to that part of the subject matter of the cause covered by the averments in the minute and answers nos 8, 9 and 10 of process and the resolution of the issues which they raise.

[36] I turn, separately, to the matter of further procedure in relation to the allegations of contempt of court. Unfortunately, the interlocutor of 6 February 2013, allowing parties six weeks to adjust the minute and answers made no order for further procedure and no further steps have been taken in that regard. That will now require to be attended to.

[37] In these circumstances, I will pronounce an interlocutor (a) sustaining the petitioner's note of objection and finding the fourth respondent's reclaiming motion to be incompetent; and (b) remitting the cause to the Outer House to proceed as accords, such further procedure to include that the case call By Order forthwith for the purpose of determining further procedure in relation to the minute and answers nos 8, 10, 11 of process.