Scottish Civil Law Reports, Issue 1, February 2017

Process— Minute of Amendment allowed after proof completed Hill v Stewart Milne Group Ltd (IH) 92

Damages— Compensation for breach of sections 19 and 20 of the Equality Act 2010 DM v Fife Council (IH) 8

Party with learning difficulties West Lothian Council v MB and KV (OH) 65

Contributory negligence—Reversing lorry Wagner v Grant (IH) 79 Judicial review— Town and country planning—Development in green belt St Andrews Environmental Protection Association Ltd, Petitioner (IH) 35 Local authority— Education—Discrimination DM v Fife Council (IH) 8 Parent and child— Permanence order—Evidence West Lothian Council v MB and KV (OH) 65

Title to sue—Discharged bankrupt Chiswell v Chiswell (OH) 49 Reduction— Sheriff court decrees—Minute refused as incompetent Harper v Letley (OH) 1 Reparation— Duty of care—Reversing lorry Wagner v Grant (IH) 79 Town and country planning— Development in green belt St Andrews Environmental Protection Association Ltd, Petitioner (IH) 35

February 2017 2017 S.C.L.R. 1−114

SCOTTISH CIVIL LAW REPORTS

Contract— Construction of contract—Whether works “completed and commissioned” Hill v Stewart Milne Group Ltd (IH) 92

2017 S.C.L.R. 1–114

Scottish Civil Law Reports Edited by Sheriff Michael J Fletcher Chiswell v Chiswell (OH) DM v Fife Council (IH) Harper v Letley (OH) Hill v Stewart Milne Group Ltd (IH)

*711748*

49 8 1 92

St Andrews Environmental Protection Association Ltd, Petitioner (IH) Wagner v Grant (IH) West Lothian Council v MB and KV (OH)

35 79 65

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A COURT OF SESSION

9 March 2016

Outer House Lord McEwan GARY JOHN HARPER

Pursuer

B

against SALLY ANN LETLEY

Defender

Reduction—Sheriff court decrees following on minute seeking warrant sell property—Minute refused as incompetent—Respondent making untrue averment in minute proceedings—Whether decree of expenses should be reduced In an action between two former spouses, the husband sought reduction of two sheriff court decrees held by his ex-wife against him, suspension and reduction of diligence and interdict against further diligence, in order to prevent her enforcing a substantial award of expenses against him. In a divorce decree which had been granted the wife had been ordained to sell a property in Broughty Ferry but she had not done so. The husband lodged a minute seeking an incidental order granting warrant for such person as the court sought proper to dispose of the property. The action was defended and after debate the minute was refused as incompetent. An appeal was taken from that interlocutor, but that was subsequently abandoned and an award of expenses, covering both proceedings, of over £10,000 was made. The husband then alleged that his ex-wife made a false statement about interest in the property by a third party and that she had instructed her solicitor to make that averment in the minute proceedings. That was admitted. As a result, the pursuer averred that the defender would never have obtained the decree against him if the sheriff had known of the misrepresentation. The defender sought dismissal and tabled four preliminary pleas including a plea that the action was incompetent.

Counsel for the defender argued that the action should be dismissed. He pointed out that no proof had been heard in the case raised by way of the minute. Instead, after debate the sheriff dealt with it as a matter of competency and dismissed the action following authority. In fact, the pursuer had adopted the wrong remedy and should have sought implement of the court order. In any event, there was a particular difficulty because the pursuer sought reduction of the decree at first instance but the expenses covered both actions.

The facts had not been necessary to a decision on competency and dismissal had been granted, not absolvitor.

Counsel for the pursuer argued that the minute was productive of untruth by the respondent. The fact that the untruth was discovered three months after the appeal had been dismissed meant that the pursuer was entitled to a proof before answer that the sheriff would not have made the decision he did if the dishonesty had been known.

Held that the husband had adopted the incorrect remedy in the sheriff court and he should have sought specific implement of the separate agreement and he had joined issue with his ex-wife in the minute proceedings, had taken an appeal, had abandoned it and had agreed the taxed expenses so that whether the wife was dishonest about Wood was irrelevant for two reasons; it had never been investigated and could have had nothing to do with competency and the action was bound to fail (para.26); and action dismissed.

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Cases referred to: Bain v McConnell Ltd, 1991 S.L.T. 691 Ferguson’s Trustee v Reid, 1931 S.C. 714; 1931 S.L.T. 502 Jamieson v Jamieson, 1952 S.C. (H.L.) 44; 1952 S.L.T. 257 Johnstone and Clark (Engineers) Ltd v Lockhart, 1995 S.L.T. 440 McKelvie v Scottish Steel Scaffolding Co Ltd, 1938 S.C. 278; 1938 S.L.T. 159 3052775 Nova Scotia Ltd v Henderson [2015] CSOH 126; 2015 S.L.T. 691 Royal Bank v Matheson [2012] CSIH 64; 2013 S.C. 146.

B The full circumstances of the case and the arguments of counsel are to be found in the following opinion of the Lord Ordinary, which was delivered on 9 March 2016.

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LORD MCEWAN [1] In this action between former spouses, the husband seeks reduction of two sheriff court decrees held by his ex-wife against him, suspension and reduction of diligence and interdict against further diligence. In simple terms it is an attempt by him to prevent her enforcing a substantial award of expenses against him.

[2] The matter has arisen in this way. The parties were divorced on 24 June 2013 and under the decree the wife was ordained to sell a property in Broughty Ferry (Fairfield Road). Having not done so the husband lodged a minute seeking an incidental order granting warrant for such person as the court saw proper to dispose of Fairfield Road. The action was defended and after debate the minute was refused as incompetent and dismissed. The husband was found liable in expenses. He appealed to the sheriff principal; the appeal was abandoned and expenses conceded. The amount of expenses is over £10,000.

[3] In the present action the husband alleges that his ex-wife made a false statement about interest in the property by a third party, and that she instructed her solicitor to make that averment in the minute proceedings. That is admitted in this action. No proof was heard about any of this. In the present action the pursuer seeks a proof and says that the defender would never have got decree against him if the sheriff had known of the misrepresentation. The ex-wife has now served a charge on the expenses, hence the present action to stop further diligence. The defender seeks dismissal and tables four pleas.

[4] I was referred to a number of cases which I list below: Ferguson’s Trustee v Reid; McKelvie v Scottish Steel Scaffolding Co Ltd; Bain v McConnell Ltd; Johnstone and Clark (Engineers) Ltd v Lockhart; Royal Bank v Matheson; and 3052775 Nova Scotia Ltd v Henderson. The well-known authority Jamieson v Jamieson was also referred to in passing.

[5] Mr Logan moved me to sustain his four pleas and dismiss the action.

He also sought recall of the interdict. He discussed the history of the dispute and pointed out that no proof had been heard in the case raised by way of the minute; after debate Sheriff Way dealt with it as a matter of competency, decided the court was functus and dismissed the action. The appeal to the sheriff principal was abandoned. Expenses were awarded, taxed. Diligence had started on the unpaid expenses. In the minute proceedings the basis of the action was the minute of agreement. Any dishonesty on the part of the wife could not have affected the result. The pursuer adopted the wrong remedy and should have sought implement. He referred me to Johnstone. The issue was really about the expenses but that raised a separate complication. It was an omnibus figure covering the procedure before the sheriff and the sheriff

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principal. These expenses had been conceded in both courts. It was not sought to reduce the decision of the sheriff principal. There had never been a proof on facts untested in a different action. He referred to Bain. There never could be a miscarriage of justice where expenses were conceded and the whole matter dismissed by a joint minute, he looked at Ferguson’s Trustee. Here the person acted on the judgment of the sheriff and sheriff principal and agreed to the taxation of all. In any event what part of the expenses should be unravelled?

[6] It was not proper to go behind the decision of the sheriff who had in any case followed the proper binding authorities. The cases dealt with decrees in absence or by default. This case was a decree in foro and any fraud was not part of the decision. The facts were not necessary to a decision on competency.

The case had been dismissed. There had been no absolvitor. Matters have moved on and the pursuer has probably now been paid in full. This court should not undertake any factual investigation.

[7] Mr Stuart, appearing for the husband, conceded that a s.14 order can only attach to a s.8 or 9 order under the Act. That was what was sought before the sheriff. It was productive of an untruth. Counsel looked at the divorce decree wherein the house was to be sold and the sale was put into the hands of a third party. If it was not sold, then a flat was to be sold and money paid, that sum was not paid nor the house marketed. Diligence was done then suspended.

When Mr Woods was finally asked about his name being used he denied any knowledge. That led to the discovery that a statement (now admitted as untrue) had been made in the pleadings. That was discovered in August 2014.

That was three months after the appeal had been dismissed. These circumstances meant that the pursuer was entitled to a proof before answer that the sheriff would not have made the decision he did if the dishonesty had been known. The pursuer was not bound to fail. Counsel referred to Jamieson.

[8] Counsel posed the question about reduction. The test was to achieve “substantial justice” and that was not barred just because the appeal was abandoned. He looked at Bain, p.695 and the Royal Bank, p.156. It was not necessary to reduce the interlocutor of the sheriff principal. What was sought was to reduce the interlocutor of the sheriff and the decerniture for expenses.

The court should be slow to decline reduction if there was an answer to the minute and the award of expenses. There was an answer because the purported offer was fundamental to the decision of the sheriff. He referred to Nova Scotia where all the cases were cited. Since the offer was bogus and was the basis of the sheriff’s decision the husband was bound to succeed. He read from McKelvie, p.280.

[9] Counsel then looked at Nos 6/3 and 6/6 of Process. These created the obligations, the core obligation being to sell the house in Broughty Ferry. That was the “core obligation” (counsel’s words). No sale took place. When the husband sought the incidental order (No 6/64 of Process) to take the sale out of his hands and give it to another was to change the core obligation. Counsel looked at statement 3 in the minute and compared it with the present record art.5 where the lie was admitted. It was a blatant misrepresentation and had he known the sheriff would not have acted as he did.

[10] Counsel then looked at some affidavits Nos 6/7, 6/12 and 6/11 of Process and a series of emails 6/11, nos 5, 6 and 7. All of these adminicles were designed to show how the lie came to be told and affect the credibility of the defender. Counsel then looked at two hearings in the Outer House in related cases involving the same parties, before moving to an analysis of the note by Sheriff Way. The point to be made was that the sheriff was under the misapprehension that the wife had sold the Broughty Ferry house. If he had

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known that she had not he could not have decided as he did. Accordingly reduction was required.

[11] Let me deal with the authorities.

[12] I look first at Ferguson’s Trustee. There the trustee sought payment of a stockbroker’s account from the defender. Defences were lodged, found to be irrelevant even after amendment and decree was granted. The defender appealed to the sheriff who allowed further amendment, refused leave to appeal and fixed a proof. The sheriff substitute fixed a proof and, inter alia, granted a specification of documents in favour of the defender. With leave, the pursuer appealed to the Court of Session. In the Court of Session the pursuer sought to review the prior interlocutor of the sheriff allowing proof.

[13] The pursuer had acquiesced in that prior interlocutor had obtained an award of expenses upon it and never sought to appeal it. It was held that having acquiesced in it he could not now seek to have it reviewed notwithstanding the very general words of s.29 of the Sheriff Courts (Scotland) Act 1907.

[14] It is important to note that the interlocutor sought to be reviewed dealt only with procedure and not with the merits. The parties had consented to the procedure which was to be followed. McKelvie was again a case from the sheriff court and dealt with reponing.The pursuer had had to pay under a guarantee and sought repayment from the defender. Defences were lodged but the defenders failed to appear on the adjustment roll. The sheriff substitute continued the case for intimation but when at the next calling there was still no appearance he granted decree by default. It was then a decree in foro. The sheriff refused the appeal and the defenders appealed to the Court of Session.

There was an explanation for the failure to appear but it appeared in the argument that the defences were dilatory and without merit. For that reason the court refused the appeal.

[15] The Lord President observed (p.280) that: “([H]e) should be extremely reluctant that a decree pronounced against any defender should become final where there was a substantial defence that had never been heard, and, although the decree was granted by default after certification. . . .”

Bain was a case which did concern reduction. The circumstances which arose from the sheriff court procedure in Kilmarnock were described by the Lord Ordinary as “lamentable”. In the first place the sheriff acted “ultra vires” in dismissing the action. Then in the appeal to the Court of Session the solicitors failed to lodge necessary papers to give effect to an agreement. The appeal was deemed to be abandoned.

[16] The Second Division allowed a proof before answer in an action of reduction over what had occurred. They said that it was not possible to define categorically the cases in which reductions were competent (p.365G). It is clear from the remainder of the opinion (p.696 A–C) that the court regarded what had happened as “highly exceptional”.

[17] In Johnstone v Clark it was sought to reduce a sheriff court decree in foro. The facts averred were that the defender was injured in an industrial accident at work. He sued I.C.I. and the pursuers. The pursuers denied liability, pleaded contributory negligence and indemnity and contribution from I.C.I. No notice of intention to defend was lodged and a decree in absence was obtained against I.C.I. and the pursuers. I.C.I. were reponed and when the pursuers later tried to be reponed it was incompetent since by then the extracted decree had become in foro. The failure to defend was due to a breakdown in communication between their insurers and their solicitors.

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[18] In allowing a proof before answer the Lord Ordinary considered the misdirection and non-receipt of documents to be an exceptional circumstance.

There was also a risk of substantial injustice where the pursuers had a defence and the other defender would receive a windfall.

[19] The Royal Bank is very different. In the first place the decree was in absence and a restricted proof before answer took place, inter alia, about the faults of the bank’s legal advisers. It was accepted that the bank had a defence to the action. The Lord Ordinary looked at the degree of fault in allowing decree to pass which he regarding as being without mitigation. That view was not upheld by an Extra Division which granted reduction on the basis that there was a substantial defence which had never been heard.

[20] 3052775 Nova Scotia involved reduction of a decree by default and proof before answer was allowed. The facts were complex and more than one action was involved concerning the same parties. Due to withdrawal of legal representations, decree by default passed and was never reclaimed. It was clear from the pleadings that there was a substantive defence to the action and answers to that defence. The defence had, of course, not been heard. The Lord Ordinary held that the circumstances were exceptional such that reduction might be necessary to produce substantial justice.

[21] Let me look more closely at what is averred in this case. The pursuer seeks reduction of two decrees dated 31 January2014 (No 6/1 (1) of Process) and 16 January 2015 (No 6/2 (1) of Process). He further asks for suspension, reduction and interdict against further diligence. The decrees are called “the pretended decrees”. These decrees follow on the minute and answers procedures before a sheriff at Dundee. The pleadings and the sheriff’s note are incorporated in the present record. The sheriff found the minute to be incompetent and awarded expenses against the husband in the January 2015 decree. There was an unsuccessful appeal to the sheriff principal which was abandoned and expenses conceded. Both sets of expenses form the decree in January 2015, strictly speaking this is not admitted by the pursuer but the matter was, and had to be, conceded in argument. The pursuer then avers that the wife’s defence to the incidental application was on the basis that she had taken steps to market the house and that: “. . . a Mr Woods had previously viewed (it). . . .” He goes on to aver (cond 5) that the statement that Woods had previously viewed it . . . (etc) . . . was untrue and the defender knew it to be untrue. The wife answers this in this way (ans 5): “. . . admitted that the averment in the answers that Mr Wood had visited the property was untrue . . . the (wife) instructed her solicitor to make that averment. . . .”.

[22] Clearly if correct this is a serious matter for the wife and the solicitor who is not represented in this action. Looking to the record in the minute (No 6/4 (1) of Process) a similar averment about Wood (stated as Woods) appears in ans 3. He is said to have previously viewed the property.

[23] The further procedure in the minute is clear. All that was argued to Sheriff Way was whether the minute was competent. There was no suggestion of any argument on relevancy and the alleged untruth about Wood was never in issue and indeed at that time was not known. The sheriff issued a full reasoned note and followed authorities which he regarded as correctly decided.

It is not for me here to discuss his note but quantum valeat I agree with him and his conclusion.

[24] What is critical here is that before the sheriff and the sheriff principal both parties were represented and so the decrees are in foro. One amount of expenses covers the debate and the conceded appeal. They are not apportioned.

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[25] As I indicated in my summary of the argument I was asked to look at affidavits numbers 6/7 (1) from a Joseph Patrick Woods, number 6/11 (1) from an Amar Sharif and number 6/12(1) from a Marie Johnston. None of them forms part of the pleadings. In the record are incorporated brevitatis causa certain emails dated 4 July 2013, 26 September 2013 and 5 November 2013.

What was said about these emails was that they affect credibility. That may be true but it is not a subject for the debate before me. I am not prepared to consider any of these productions. They cannot in any way be tested in crossexamination before me and to consider these would be unfair to the defender.

I was referred to a decision of Lady Scott in a related action between the same parties. It is reported at [2014] CSOH 168 and in No 6/13 (1) of Process. It raises a different point and was heard as a motion relating to the scale of expenses. Some of the issues raised before me were discussed and in particular the alleged misrepresentations by the wife over the sale of the property.

Affidavits and emails were produced and looked at. Lady Scott was, in my opinion rightly, unwilling to conduct a proof into these matters and get involved in further proceedings (paras 21, 22) in a case which had effectively settled. I refer also what she said about drawing conclusions where there has been no proof. Her actual decision is not material for present purposes. Since the affidavits were disputed she discounted them. In the same way I am not prepared to look at affidavits not incorporated in the pleadings.

[26] What then is to be done. In my opinion the husband adopted the incorrect remedy in the sheriff court. He should have sought specific implement of the separate agreement. He joined issue with his ex-wife in the minute proceedings, took an appeal, abandoned it and agreed the taxed expenses.

Whether the wife was dishonest about Wood is irrelevant for two reasons; it has never been investigated and can having nothing to do with competency.

[27] In my opinion the authorities assist the defender. All of these deal with circumstances quite different to the present and it is easy to see why the circumstances in some of them were “exceptional”. In almost all of these there has been a complete failure by legal representatives or some gross incompetence by the lower court—(Bain is a good example.) The court is often motivated by the obvious desire to allow a proper defence to be heard if there is one (McKelvie) but not where there is none. Furthermore I have earlier said that both parties acquiesced in the sheriff court procedure. That is a powerful factor against now allowing any form of review by way of reduction (see Ferguson’s Trustee). There has been no failure by legal advisers (Johnston v Clark) and there is nothing at all exceptional about this case. It is also important to note that no reduction is sought of the decree of the sheriff principal and the expenses have never been apportioned. There is a final point which was touched on by Mr Logan and it is this. Reduction must have some practical effect so that the court is not seen to act in vain. To reduce both decrees of the sheriff would still leave the interlocutor of the sheriff principal intact as well as the expenses finding in his court. It would be wrong to allow the husband to relitigate the minute a second time in the hope of a different result (which would be unlikely) on the issue of competency. It would be necessary to have a proof on the present record and probably involved the sheriff as a witness (see cond.7) before any of that could be achieved, to do all or any of this on a question of expenses only should not, in my opinion, be countenanced. There must be some finality to these endless disputes and I repeat that the present problem has not resulted from any dishonesty by the wife but became of the selection of the wrong remedy. As Lady Scott said this case is now in the territory of “satellite litigation”.

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[28] In my view on the authorities, and what is averred, the pursuer is bound to fail. I will accordingly dismiss the action, and sustain the defender’s first and third pleas-in-law and find it unnecessary to deal with her second and fourth pleas. I will repel all the pleas for the pursuer. I was told there is an outstanding issue over an interdict. I heard no argument about that but I will continue the case for a hearing on interdict if necessary and on expenses which are meantime reserved.

For the pursuer: Stuart, instructed by Balfour + Manson, Solicitors, Edinburgh.

For the defender: Logan, instructed by Halliday Campbell WS.

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A COURT OF SESSION

11 March 2016

Inner House (Extra Division) Lady Paton, Lord Bracadale and Lord McGhie B

DM

Pursuer (Respondent)

against FIFE COUNCIL

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Defenders (Appellants)

Local authority—Education—Discrimination—Local authority undertaking responsibility for payment of special education for autistic child—Child applying for payment for additional year of education after reaching 18—Refusal by local authority—Whether discrimination— Whether order for payment of special education should be made— Whether entitled to damages—Equality Act 2010 (c.15)—Education (Additional Support for Learning) (Scotland) Act 2004 (asp 4) Damages—Compensation for breach of ss.19 and 20 of the Equality Act 2010 Words —“Reasonable adjustment” Section 29(3) of the Education (Additional Support Learning) (Scotland) Act 2004 provides, inter alia: “In this Act . . . references to a child or young person for whose school education an education authority are responsible to any child or young person being, or about to be, provided with school education— (a) in a school under the management of the education authority, or (b) in pursuance of arrangements made are entered into by the local authority.”

Section 49 of the Education (Scotland) Act 1980 provides, inter alia: “[A]n education authority shall have power to grant, on such conditions as may be prescribed, and make payments in pursuance of, bursaries, scholarships or other allowances to persons over school-age attending courses of full-time or part-time education (whether held in Scotland or elsewhere). . . .”

Section 13 of the Equality Act 2010 provides, inter alia: “Direct discrimination (1) A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others.

(2) If the protected characteristic is age, A does not discriminate against B if A can show A’s treatment of B to be a proportionate means of achieving a legitimate aim. . . .”

Section 15 of the 2010 Act provides, inter alia: “Discrimination arising from disability (1) A person (A) discriminates against another (B) if — (a) A treats B unfavourably because of something arising in consequence of B’s disability, and 8

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(b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim. . . .”

Section 19 of the 2010 Act provides, inter alia: “Indirect discrimination.

(1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B’s.

(2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of B if— (a) A applies, or would apply, it to persons with whom B does not share the characteristic, (b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it, (c) it puts, or would put, B at that disadvantage, and (d) A cannot show it to be a proportionate means of achieving a legitimate aim.

(3) The relevant protected characteristics are— age; disability. . . .”

Section 20 of the 2010 Act provides, inter alia: “Duty to make adjustments.

(1) Where this Act imposes a duty to make reasonable adjustments on a person, this section, sections 21 and 22 and the applicable Schedule apply; and for those purposes, a person whose duties imposed is referred to as A. (2) The duty comprises the following three requirements.

(3) The first requirement is a requirement where a provision, criterion or practice of A’s puts a disabled person at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have taken to avoid the disadvantage. . . .”

Section 21 of the 2010 Act provides, inter alia; “Failure to comply with duty (1) A failure to comply with the first, second or third requirement is a failure to comply with a duty to make reasonable adjustments.

(2) A discriminates against a disabled person if A fails to comply with that duty in relation to that person. . . .”

Part 3 of the 2010 Act—Services and public functions—provides, inter alia: “28 Application of this Part.

(1) This Part does not apply to the protected characteristic of— (a) age, so far as relating to persons who have not attained the age of 18. . . .

29 Provision of services, etc (1) A person (a ‘service-provider’) concerned with the provision of a service to the public or a section of the public (for payment or not) must not discriminate against a person requiring the service by not providing the person with the service.

(2) A service-provider (A) must not, in providing the service, discriminate against a person (B)—

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(a) as to the terms on which A provides the service to B; (b) by terminating the provision of the service to B; (c) by subjecting B to any other detriment. ...

(6) a person must not, in the exercise of a public function that is not the provision of a service to the public or a section of the public, do anything that constitutes discrimination, harassment or victimisation.

(7) A duty to make reasonable adjustments applies to— (a) a service-provider (and see also section 55(7)); (b) a person who exercises a public function that is not the provision of a service to the public or a section of the public. . . .

31 Interpretation and exceptions ...

(3) A reference to the provision of a service includes a reference to the provision of a service in the exercise of a public function . . .”

Section 149 of the 2010 Act provides, inter alia: “Public sector equality duty (1) A public authority must, in the exercise of its function, have due regard to the need to— (a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act; (b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; (c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it. ...

(3) Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to— (a) remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic; (b) take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it; (c) encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low. ...

(6) Compliance with the duties in this section may involve treating some persons more favourably than others . . .

(7) The relevant protected characteristics are— age disability. . . .”

Schedule 2 to the 2010 Act—Services and public functions: reasonable adjustments— provides, inter alia: “The duty.

(1) A must comply with the first, second and third requirements.

(2) For the purposes of this paragraph, the reference in section 20(3), (4) or (5) to a disabled person is to disabled persons generally.

(3) Section 20 has effect as if, in subsection (4), for ‘to avoid the disadvantage’ there were substituted—

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‘(a) to avoid the disadvantage, or (b) to adopt a reasonable alternative method of providing the service or exercising the function.’

(4) In relation to each requirement, the relevant matter is the provision of the service, or the exercise of the function, by A. (5) Being placed at a substantial disadvantage in relation to the exercise of a function means— (a) if a benefit is or may be conferred in the exercise of the function, being placed at a substantial disadvantage in relation to the conferment of the benefit, or (b) if a person is or may be subjected to a detriment in the exercise of the function, suffering an unreasonably adverse experience when being subjected to the detriment. . . .”

The pursuer suffered from autistic spectrum disorder and dyspraxia. He attended Butterstone New School at the expense of the local authority. When he was approaching his 18th birthday it was considered he required another year at the school to assist him in the transformation to employment or further education. His mother applied to the local authority to continue funding and enclosed a letter from the headteacher supporting the request. The request was refused, in a letter dated 23 May 2013, on the basis that the local authority had no obligation to continue funding after the age of 18.

The pursuer raised a summary application averring that the refusal constituted unlawful discrimination on the basis of age and disability contrary to the Equality Act 2010 claiming that he was at a substantial disadvantage compared with non-disabled students. He asked the court for declarator that the defenders had unlawfully discriminated against the pursuer contrary to the Act and to ordain them to provide funding and for decree for payment of £8,000 for anxiety, frustration and upset caused by the uncertainty. The pursuer’s maternal grandfather provided a loan to allow the pursuer to begin the year. In due course the sheriff found in favour of the pursuer and granted decree for payment of the fees and a sum for inconvenience.

The defenders appealed to the Court of Session contending that there had been no unlawful discrimination. Counsel for the defenders submitted that the appeal should be allowed and that the interlocutor of the sheriff be recalled simpliciter. At the age of 18 the pursuer ceased to be a child or young person for whom the defenders had a duty to provide education and the action was not therefore an action seeking the provision of education. It was a cash claim for compensation. In fact, what was in issue was the exercise of a public function, namely the defenders’ discretionary power to grant a bursary in terms of s.49(2) of the Education (Scotland) Act 1980 and Pt.3 of the Act 2010 Act. The refusal to grant a bursary had been made for entirely non-discriminatory and justifiable reasons. The respondent had not been refused a bursary “because” he was disabled. There had been no identification in the present case of any provision, criterion, or practice, which was said to have given rise to the disadvantage relied upon, and which represented the base position for any adjustments made.

Counsel for the respondent argued that considerable respect should be given to the decision of the sheriff as he had heard all the evidence. The sheriff had not erred in law in holding that the operative decision was in May 2013.

The defenders had to have due regard to the need to eliminate discrimination; to advance equality of opportunity; and to remove or minimise disadvantages suffered by persons such as the pursuer. The decision not to fund another year’s schooling was something unfavourable to the pursuer and arose in consequence of the pursuer’s need to stay in school beyond the age of 18 because of the social and emotional challenges caused by autism. Legislation dealing with equality should be given a generous interpretation. The decision not to award a bursary, which was a benefit, resulted in the disadvantage and

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consistent discrimination. The defenders had unlawfully discriminated against the pursuer on the basis of his age and it was questionable whether comparators were needed.

Held (1) that the sheriff was entitled to find that there had been indirect discrimination by the defender’s letter of 23 May 2013 in terms of s.19 of the 2010 Act in respect of the protected characteristic of disability (para.59); (2) (per Lord Bracadale and Lord McGee) that there was no basis upon which a finding could have been made that payment of the full amount of the pursuer’s fees for an additional year was a reasonable adjustment which might have been applied to any identified group of disabled so as to have allowed it to have been described as a generic adjustment or one applying to the disabled, generally (para.103) and appeal allowed to the extent that the sheriff’s interlocutor of 29 September 2014 recalled and in place thereof the following interlocutor granted: “Therefore sustains the pursuer’s pleas-in-law numbers 1, 4, and 6; declares that the defenders unlawfully discriminated against the pursuer; grants decree against the defenders in the sum of £2,500, with interest. . . .”

Cases referred to: Allardice v Wallace, 1957 S.L.T. 225 Aster Communities Ltd v Akerman-Livingstone [2015] UKSC 15; [2015] 2 W.L.R. 721; [2015] 3 All E.R. 725 Homer v Chief Constable of West Yorkshire Police [2012] I.C.R. 704 Lothian Regional Council v A, (IH) 1992 S.C.L.R. 376; 1992 S.L.T. 858 M M v Secretary of State for Work and Pensions [2014] 1 W.L.R.1716; [2014] 2 All E.R. 289 Noor v Foreign and Commonwealth Office [2011] I.C.R. 695 Paully v First Group plc [2015] 1 W.L.R. 3384 Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] I.C.R 337.

On 11 March 2016 the following opinions were delivered. The full circumstances of the case and the arguments of counsel are to be found in the opinion of Lady Paton.

LADY PATON

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Complaint of discrimination in education: age and/or disability

[1] The pursuer was born on 6 June 1995. He has an autistic spectrum disorder and dyspraxia. He is disabled within the meaning of s.6 of the Equality Act 2010. The defenders, as the local education authority, were responsible for his school education. In that context, s.29(3) of the Education (Additional Support for Learning) (Scotland) Act 2004, provides: [Her Ladyship quoted the section as set out above and continued:] [2] Initially the pursuer attempted to undertake his secondary school education at a mainstream school under the management of the defenders, namely Waid Academy, Anstruther, Fife. However his disability made that impossible for him. In January 2010, he began attending Butterstone School (also known as “The New School”). Butterstone is an independent private school catering for children and young persons with special educational needs.

After a dispute between the defenders and the pursuer and his family concerning a placing request (including an action in the sheriff court in which the pursuer and his family were successful), the defenders undertook responsibility for the payment of the pursuer’s school fees from 16 May 2011 onwards.

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[3] In 2013, the pursuer was approaching his 18th birthday, 6 June 2013.

His mother Dr K M and the head teacher of Butterstone considered that he needed a further year at the school. It was hoped that would enable him to transition to further education and/or employment. Accordingly by letter dated 16 April 2013, Dr K M requested that the defenders continue funding the pursuer for 2013–14 (£43,410 for the year): app. pp.3–4, and 6; electronic bundle pp.161–162 and 164. In particular she explained: “I am writing to request a further year funding for my son . . . who is currently attending The New School Butterstone.

“D is now doing well at school and working towards his qualifications this summer. There are a number of courses he is not going to be able to finish in time for this academic session and he would benefit greatly from another year at school to complete these programmes. The transition back into school was not easy for D and it has taken him considerable time to get him settled and working well.

“I am enclosing a letter from the head teacher at The New School Butterstone which outlines how D would benefit from another year at school. We feel that D missed a lot of education time through the difficulties he had at Waid and in making the transition back into education. He is making excellent progress and is ambitious in his studies. He needs another year at school to achieve a level that would allow him to go on to successful further study in an area that is of interest to him. I hope you can support D in achieving his potential through another year at school. . . .”

Dr K M enclosed a letter from the head teacher supporting her request. The head teacher had formed her own view, and also had professional advice from Charles Gibb, educational psychologist (appeal print p.38; electronic bundle p.41).

[4] By letter dated 23 May 2013, the defenders refused Dr K M’s request, advising that their statutory obligation to provide education for a child came to an end when the child reached the age of 18. They explained that they had given careful consideration to the request and continued (app. p.5; electronic bundle p.163): “The original request to place D at The New School, and your successful appeal against the refusal of that request, were made under the Education (Additional Support for Learning) (Scotland) Act 2004, which makes provision for meeting the additional support needs of children and young persons for whose school education the education authority are responsible.

Since turning 16 D has been a young person, the definition of which within the Act is ‘a person . . . who has not attained the age of eighteen years’. As D will be 18 on 6 June 2013 the Council will no longer be responsible for his school education. Consequently I do not think that your request can be treated as a placing request under the Act. The Council has no duty to continue to fund D’s placement at The New School. We will therefore not fund his placement for an additional year as you request’. . .”

[5] The pursuer’s fees for 2012–13 had been paid in advance. He was able to remain at Butterstone for the final three weeks of term until 28 June 2013.

[6] The pursuer then raised a summary application against the defenders in Kirkcaldy Sheriff Court, averring that their refusal of 23 May 2013 constituted unlawful discrimination against him on the basis of age and disability, contrary to the Equality Act 2010 as set out in the initial writ (app. pp.12 et seq; electronic bundle pp.170 et seq). Reference was made to the 2010 Act, inter alia s.29(2) and (7) and ss.20–21. In particular it was averred that:

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“13. The pursuer is at a substantial disadvantage compared with non-disabled students in relation to the practice of leaving school age at age 18, having completed six years of secondary education, and the defenders’ policy of not providing funding for schooling beyond that. Because of his disability, he has not been able to attain within the normal time the level of academic, social and emotional preparation needed to progress to college, but it is reasonably expected that he can do so with a further year’s attendance at The New School. Funding this additional year would therefore be a reasonable adjustment to the defenders’ usual provision and practice.

14. In failing to allow the pursuer to remain at The New School for a final academic year, in the face of all the professional advice available and notwithstanding the detrimental effects identified, the defenders have failed to make reasonable adjustments to avoid said substantial disadvantage to the pursuer.

15. There is nothing in law which prevents the defenders from continuing to fund the pursuer’s education at The New School for a further academic year. Figures provided by the Council indicate that in each of the previous five years for which figures were available (September 2008 through September 2012 school censuses), no fewer than eight and as many as 18 pupils aged over 18 were attending Fife mainstream schools. Thus the defenders clearly have power to fund schooling beyond the age 18, indeed it is their normal practice to do so to the end of the academic year following the pupil’s 18th birthday.”

[7] The initial writ craved the court to grant declarator that the defenders had unlawfully discriminated against the pursuer contrary to the Equality Act 2010; to ordain the defenders to implement their duties in terms of the 2010 Act by providing funding to allow the pursuer to remain at the school (including implement ad interim); and to grant decree against the defenders for payment to the pursuer of £8,000 with interest from 23 May 2013 for the anxiety, frustration and upset caused by the uncertainty regarding his future.

[8] The pursuer’s maternal grandfather provided a loan for the school fees for 2013–14 (payable in advance of each term: app. pp.9–11; electronic bundle pp.167–169). The pursuer was accordingly able to return to Butterstone on 28 August 2013 when the school year 2013–14 began.

[9] Meantime the pursuer’s summary application proceeded in the sheriff court. The pleadings were adjusted at some stage so that the craves were for payment of an amount equivalent to the school fees for the year 2013–14 together with a sum for upset and distress.

[10] On 28 August 2013 (the day of the pursuer’s return to school) there was a hearing on interim orders before Sheriff McCulloch. During submissions, the pursuer’s solicitor suggested that the defenders might consider awarding the pursuer an allowance or bursary in terms of s.49 of the Education (Scotland) Act 1980. The sheriff requested the defenders to consider that matter. The defenders undertook to do so.

[11] Subsequently by letter to the pursuer dated 3 October 2013 (app. pp.7–8, electronic bundle pp.165–166), the defenders refused to grant the pursuer funding by way of a bursary. In their letter, they explained: “As you are aware, your legal proceedings against Fife Council called in court on 28 August. At that hearing, it was suggested by your solicitor that funding for your attendance at the New School for the session 2013 to 2014 could be provided under s.49(2) of the Education (Scotland) Act 1980. The sheriff asked Fife Council to proceed on the basis that such a request had been made.

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“An allowance granted under s.49(2) would be a bursary granted by the council as education authority, which would be subject to the rules set out in the Education Authority Bursaries (Scotland) Regulations 2007/149.

“I have given careful consideration to your request and to the reasons you have given for making it. I have also taken account of the professional advice of our educational psychologist. The education authority is given the discretion to grant or refuse such payments. I have for the following reasons decided to refuse your request: • A considerable sum of money (£87,930) has already been expended by the council in supporting your education at the New School.

• The cost of funding a further session is substantial, being at least £43,000.

• The Education and Learning Directorate is of the view that, funding having previously been provided, adequate preparations should have been made for your transition from school education during the course of the session 2012–13.

• The Education and Learning Directorate is not satisfied that further attendance at the New School will result in your being significantly better prepared to make a transition to further education. In any event, it is not satisfied that any benefit to you would justify the substantial cost involved.

• Funding for additional support during school education is made under the provisions of the Education (Additional Support For Learning) (Scotland) Act 2004, under which funding ceases when a person reaches the age of 18. The council is not satisfied that it would be appropriate, save in exceptional cases, to use bursary payments to effectively continue additional support provision beyond the age of 18.

• The council is also concerned that it may not be in the interests of pupils to make bursaries available to them, in order to fund additional years of secondary school education. That would tend to be detrimental to their focusing on completing their academic education within the usual timescale.”

[12] Despite the defenders’ refusal, the pursuer was able to continue with his education at Butterstone as a result of his grandfather’s loan. During the school year 2013–14, the summary application in the sheriff court reached the stage of evidence and submissions. Evidence was led before Sheriff J H Williamson on 17–18 February, 11 March, and 12–13 June 2014. The pursuer did not give evidence. Subsequently on 13 August 2014, counsel lodged written submissions. On 29 September 2014 the sheriff issued his judgment, attaching counsel’s written submissions as appendices. The sheriff found in favour of the pursuer, and granted decree against the defenders for payment to the pursuer of £45,910 and £2,500 (appeal print p.32; electronic bundle p.35).

[13] The sheriff made, inter alia, the following findings in fact and law (appeal print pp.31 et seq; electronic bundle pp.33 et seq): “. . . 6. The defenders met the cost of the New School fees incurred by the pursuer’s placement in terms of s.1(1) of the 1980 Act until his 18th birthday and thereafter until the end of the academic year 2012–13 in terms of s.49 of the 1980 Act. 7. At a hearing on interim orders in relation to this application the defenders treated the pursuer’s representations as an application for funding for the academic year 2013–2014 in terms of s.49 of the 1980 Act. By letter dated 3 October 2013 the defenders refused that application.

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8. The defenders refused the pursuer’s mother’s request of 16 April 2013 for further funding by letter dated 23 May 2013. In refusing the request the defenders relied upon the provisions of the Education (Additional Support for Learning) (Scotland) Act 2004.

9. The defenders’ decision of 23 May 2013 was based solely on the pursuer’s age, namely that he had attained the age of 18.

10. In making the decision of 23 May 2013 the defenders relied upon a policy (sc provision), criterion or practice (PCP) namely that they would not fund the education of persons over the age of 18 other than those who attained the age of 18 in their final year of schooling.

11. It would have been a reasonable adjustment for the defenders to make payment of the pursuer’s New School fees for the academic year 2013–14.

12. In reaching their decision of 23 May 2013 the defenders failed to take account of the pursuer’s disability and the impact their decision would have upon him as a result of that disability.

13. In implementing the PCP the defenders failed to take account of the pursuer’s disability and the impact the implementation would have upon him as a result of that disability.

14. The defenders discriminated against the pursuer in failing to take account of his disability.

15. The defenders discriminated against the pursuer on the basis of his age.

16. The defenders’ treatment of the pursuer was not a proportionate means of achieving a legitimate aim.

17. As a result of the defenders’ discrimination the pursuer suffered stress and anxiety.

18. The sum of £2,500 is a reasonable estimate of the pursuer’s injury and loss.”

[14] The defenders appealed to the Court of Session, contending that there had been no unlawful discrimination.

Education legislation School education

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[15] In terms of s.1 of the Education (Scotland) Act 1980, and ss.1 and 2 of the Standards in Scotland’s Schools etc. Act 2000, the education authority have a duty to provide school education to children and young persons. School age is five to 16 (s.31 of the 1980 Act). A child is a person not over school age.

A young person is over school age but under 18 (s.135 of the 1980 Act).

[16] The statutes—including the clear dividing line between adult and child being fixed at 18—are modelled on the United Nations Convention on the Rights of the Child (UNCRC) arts.28, 29, and 12.

[17] The Education (Additional Support for Learning) (Scotland) Act 2004 provides for additional support in education to persons aged under 18: for example, ss.1, 2 (co-ordinated support plans), 4 (duties of education authority in relation to children and young persons for whom they are responsible, with the qualification that the authority “is not required to do anything which would result in ‘unreasonable public expenditure’ ”), 6 (the identification of additional support needs). There are also certain “transitioning” duties: s.12(5) and (6) provides that no later than 12 months before school leaving, steps must be taken including requesting information from agencies, taking the views of the child or young person, taking account of the information provided, and assessing the adequacy of the additional support for the child or young person during the relevant period. Section 13 provides that the education authority

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must pass on information to appropriate agencies no later than six months before the leaving date. The ‘Supporting children’s learning code of practice’ (Revised edn, 2010) paras 27 et seq gives further guidance in relation to pupils in specialist placements.

A

Further education

[18] Various legislative provisions empower an education authority to assist adults (i.e. persons over the age of 18) to pursue further education. For example, s.49 of the Education (Scotland) Act 1980 provides, inter alia: [Her Ladyship quoted the section as set out above and continued

B

Equality and discrimination legislation: age and/or disability

[19] The following are excerpts from the Equality Act 2010. [Her Ladyship quoted the sections from the Act as set out above and continued:] [With reference to section 20 Duty to make adjustments, her Ladyship added: The second and third requirements concern a “physical feature” and “an auxiliary aid”, neither being relevant in this case.]

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Submissions for the defenders and appellants

[20] Senior counsel for the defenders submitted that the appeal should be allowed, and the sheriff’s interlocutor of 29 September 2014 recalled simpliciter.

[21] At the age of 18, the pursuer ceased to be a child or young person for whom the defenders had a duty to provide education. The pursuer’s action was not therefore an action seeking the provision of education: it was a cash claim for compensation. The pursuer had in fact received the education he wanted in 2013–14, although he had been obliged to pay for it. The issue was: should the defenders be obliged to reimburse him, or to pay him compensation.

It was the defenders’ position that what was in issue was the exercise of a public function, namely the defenders’ discretionary power to grant a bursary in terms of s.49(2) of the Education (Scotland) Act 1980 and Pt.3 of the Equality Act 2010.

D

1 The relevant refusal was found in the defenders’ letter of 3 October 2013

[22] The letter of 23 May 2013 merely explained that the defenders’ responsibility for the pursuer’s school education came to an end on his 18th birthday. The letter was not a decision about a bursary: that came later, in the letter of 3 October 2013. It could not be inferred from the letters that the former decision precluded the latter decision, or that the latter decision was pre-judged.

2 Section 13: a claim based on age discrimination depended on demonstrating that because of age, the claimant had been treated less favourably than others; it was therefore necessary to identify a relevant set of comparators

[23] Section 13 of the Equality Act 2010 concerned direct discrimination.

The letter of 23 May 2013 was a simple statement that the defenders had no duty to provide education once the pursuer was aged 18. As for the letter of 3 October 2013 refusing to grant a bursary, that had been made for entirely non-discriminatory and justifiable reasons, as set out in the letter. Also in order to demonstrate discrimination, the pursuer had to produce comparators, either actual or hypothetical, and then demonstrate that he had been treated less favourably than the comparators (Shamoon v Chief Constable of the RUC, Lord Hope at paras 39, 52, 63; Lord Hutton at para.90; Lord Scott at paras

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107–112, 116; Lord Rodger at paras 132, 137, 141). In the present case, there was no evidence of comparators, i.e. other applicants for bursaries. Any hypothetical comparator was in a materially different position. No case of discrimination on the ground of age had been made out.

3 Section 15: a claim based on discrimination arising from disability depended on demonstrating that a person had been treated unfavourably because of something arising in consequence of that person’s disability

B

[24] It was accepted that the pursuer was disabled. However he had not been refused a bursary “because” he was disabled. In the context of direct discrimination (s.15), there was no finding to the effect that the bursary was refused “because of” something arising in consequence of the pursuer’s disability.

4 Section 19: a complaint of indirect discrimination depended on demonstrating a “provision, criterion or practice” that put disabled persons at a disadvantage

C

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[25] The letter of 23 May 2013 did not contain a “provision, criterion or practice”, but rather a statement of law, namely that the defenders ceased to be responsible for the pursuer’s school education once he reached the age of 18. The letter of 3 October 2013 was not a refusal of education, but a refusal of a bursary. No provision, criterion or practice had been identified. No relevant comparators had been identified. There had been no evidence of indirect discrimination by means of a provision, criterion or practice contrary to s.19 of the Equality Act 2010.

5 Sections 20 and 29(7): a claim based on reasonable adjustments in terms of the “first requirement” required identification of the relevant “provision, criterion or practice” relating to “a relevant matter” (here the grant of a bursary) which placed the claimant at a substantial disadvantage in comparison with persons who were not disabled

[26] In order to determine whether there had been a failure to comply with s.20(3) of the 2010 Act, it was essential to identify the provision, criterion, or practice which was said to give rise to the disadvantage relied upon, and which represented the base position before any adjustments were made (Paulley v First Group plc; M M v Secretary of State for Work and Pensions; Noor v Foreign and Commonwealth Office). There had been no such identification in the present case. There had been no evidence and no findings in fact on the matter.

6 The sheriff having failed to make findings that would have entitled him to conclude that the defenders unlawfully discriminated against the pursuer, the appeal should be allowed

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[27] Counsel criticised the sheriff’s findings in fact and findings in fact and law. In the sheriff’s note, there was no mention of the Equality Act 2010, although that Act was supposed to be the basis of the decision. The reference to the 2012 Regulations [The Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012 [SSI 2012/162, [the 2012 Regulations]]did not assist, as those regulations could not form the basis of the pursuer’s case. The Education (Additional Support for Learning) (Scotland) Act 2004 did not impose any duty on an education authority to continue to provide fees.

[28] While the sheriff seemed to suggest that in May 2013, the defenders should ex proprio motu have thought of a way in which the pursuer could be funded for another year (for example, by a bursary) and should then have made the pursuer an offer, that was not an exercise which the 2010 Act

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demanded. Para.11 of the sheriff’s discussion section (appeal print p.48, electronic bundle p.51) was the only attempt to find comparators, but that attempt was unsuccessful when tested by the statutory provisions. The sheriff did not address the test contained in the 2010 Act, and in para.15 of his discussion section (appeal print, p.50; electronic bundle p.53) did not define what sort of adjustment he was referring to.

A

7 The sheriff’s interlocutor should be recalled

[29] There were no shorthand notes and no recording of the evidence led. The findings in fact were not sufficient to enable the appeal court to recall the sheriff’s interlocutor and to substitute a fresh interlocutor (cf Shamoon). In all the circumstances, the appeal should be allowed, and the sheriff’s interlocutor of 29 September 2014 recalled simpliciter.

B

Submissions for the pursuer and respondent

[30] The appeal should be dismissed, and the sheriff’s interlocutor adhered to.

Alternatively, if the court considered that there was difficulty with any of the reasoning, the court could substitute its own findings in law. Alternatively as this was a case in which it could not be said that no discrimination could ever be found, the case could be remitted back to the sheriff.

C

1 Overview

[31] Considerable respect should be given to the sheriff’s decision, as he had heard all the evidence (cf Shamoon at para.59). The sheriff’s findings in fact, findings in fact and law, and his note summarising the evidence, should be read together. It was not correct to say that the sheriff did not refer to the relevant statutory provisions. At p.44 of the appeal print (p.47 of the electronic bundle), he set out the statutes and cases. The written submissions were contained in appendices to his decision. Accordingly he had incorporated much of the statutory scheme and had set out the legal background. His reasoning was provided in that context.

[32] Counsel referred to the ‘Supporting children’s learning code of practice’, a code published by the Scottish Government in relation to the 2004 Act. The code was important to set the context, particularly in relation to the transitioning of a pupil such as the pursuer to further education or employment (pp.113–119).

D

E

2 The May decision was the relevant one

[33] The pursuer’s position was that the May decision was the operative decision. There required to be planning for the pursuer’s future: nothing was done, and he was in effect abandoned. The defenders had a number of statutory discretions which they could have exercised in May 2013. Moreover they had duties to assist with his transitioning: sheriff’s discussion section paras 11, 13, 14, and 17 (appeal print pp.48 et seq; electronic bundle pp.51 et seq) referring, inter alia, to reg.5(1) of the 2012 Regulations. The pursuer’s mother had made the request in April 2013. Her request was a general one, for “funding”, and was not specifically for funding under the 2004 Act. The defenders had refused the request, and had taken no further steps until they responded to Sheriff McCulloch’s request in August 2013. The defenders could, and should, have reviewed the discretionary options available to them, including bursaries, in the context of appropriate steps being taken to transition the pursuer to his next stage. The timing of their consideration of the option of a bursary was of the essence.

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[34] The sheriff had not therefore erred in law in holding that the operative decision was in May 2013. S.149(1)(a) and (b) and (3)(a) of the Equality Act 2010 did not impose a duty: but the section was nevertheless important, and set the context (namely the defenders must have due regard to the need to eliminate discrimination; to advance equality of opportunity; and to remove or minimise disadvantages suffered by persons such as the pursuer). The importance of s.149 was underlined by the 2012 Regulations. Also in terms of the Equality Act 2010 Code of Practice, paras 7.20 and 7.21, the defenders “should anticipate the requirements of disabled people and the adjustments that may have to be made for them”.

[35] In all the circumstances, the sheriff was right to focus on the decision in May 2013, for the reasons he gave in para.4 of his discussion section (appeal print p.46; electronic bundle p.49). He had not erred in law.

[36] The relief to which the pursuer was entitled was declarator of unlawful discrimination, and damages. The sheriff dealt with the damages for anxiety (£2,500). As for the school fees, the pursuer had returned to school on 28 August 2013. Removal of the pursuer from the school would have been detrimental to him: para.4 of the discussion section (appeal print p.46; electronic bundle p.49). Accordingly the whole of the year’s fees were due in damages.

3 Discrimination arising from disability: section 15

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[37] As explained in the government’s explanatory notes to the bill in respect of s.15 of the 2010 Act (joint authorities tab 7.4; electronic bundle p.322): “this clause provides that it is discrimination to treat a disabled person unfavourably not because of the person’s disability itself but because of something arising from, or in consequence of, his or her disability, such as the need to take a period of disability-related absence . . .”. The decision not to fund another year’s schooling was something unfavourable to the pursuer, and arose in consequence of the pursuer’s need to stay in school beyond the age of 18 because of the social and emotional challenges caused by autism. The pursuer’s autism had prevented him from making the transition to other settings: he needed another year in school. The defenders were in breach of s.15(1), and had no defence in terms of s.15(2). There was a possible defence in s.15(1)(b) (“a proportionate means of achieving a legitimate aim”, cf dicta of Lady Hale at paras 17–18 of Aster Communities Ltd v Akerman-Livingstone), but such a defence had not been pled by the defenders.

[38] If the school’s [sic] reason for refusing a bursary had been that other opportunities for the pursuer had been identified and it would not be a good idea to fund him for another year at Butterstone, that could not be criticised: but here the reason was simply age (18). Legislation dealing with equality should be given a generous interpretation.

4 Indirect discrimination: section 19

[39] The PCP which was discriminatory was “not to exercise a discretion to fund an individual beyond the age of 18”. The proper interpretation of the letter of 23 May 2013 was that the defenders had made a decision that they would not exercise a discretion to fund a placement in relation to a pupil aged 18 or over. The relevant group for comparison purposes would be the group of pupils in the UK applying for funding beyond the age of 18. An apparently neutral PCP (not funding pupils beyond the age of 18) put a disabled person such as the pursuer at a disadvantage, as the transitioning period would be more difficult for him: a longer transition was necessary: cf the sheriff’s

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discussion section para.11 (appeal print p.48; electronic bundle p.51). The Commission for Equality supported the pursuer on this point: written submissions para.24 (tab 6.4; electronic bundle p.224).

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5 Reasonable adjustments: section 20

[40] Authorities such as M M and Paulley established that it was necessary to identify a PCP which put a particular individual at a disadvantage. The PCP was the defenders’ decision that they would not exercise a discretion to fund a placement in relation to a pupil aged 18 or over. The decision not to award a bursary (a benefit) resulted in the disadvantage and constituted discrimination.

The defenders had a duty in terms of s.20 to make reasonable adjustments for the pursuer. In the present case, that duty comprised the first requirement.

“The first requirement is a requirement, where a provision, criterion or practice of (the defenders) puts a disabled person at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage (s.20(3)).”

The defenders’ decision to refuse funding was a relevant substantial disadvantage in terms of para.2(5) of Sched.2 to the 2010 Act (cf dicta of Elias LJ at paras 70–77 of M M). The pursuer was placed in a worse position than non-disabled pupils, because he needed more time when transitioning to the next stage than non-disabled pupils. The steps which could have been taken included a “reasonable adjustment” of the policy, for example, the grant of a bursary. It was accepted that there were financial aspects: cf ans.13 in the pleadings (appeal print p.13; electronic bundle p.16). The sheriff had taken those matters into account: paras 14 and 15 of his discussion section (appeal print p.50; electronic bundle p.53). The adjustment which could have been made was straightforward, and, as the sheriff correctly held in para.15 “it [could] not be argued that the adjustment was not reasonable”.

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6 Age discrimination: section 13

[41] By not funding a further year at Butterstone, the defenders had unlawfully discriminated against the pursuer on the basis of his age. The comparator exercise in the present case was difficult, but there was no difficulty identifying the reason for the discrimination: it was age. In the absence of comparators, the court could look at other considerations supporting the inference of discrimination: the very words of the letter of 23 May 2013 made it clear that age was the operative factor (cf Lord Rodger, para.142 of Shamoon). There could be hypothetical comparators. In this particular case, the situation was clear: the pursuer was less favourably treated because he had reached the age of 18. It was questionable whether comparators were needed.

[42] It was accepted that there was a system of school education up to the age of 18, and that the defenders might have had a good defence based on “justification”: but that defence had not been advanced. There had been no pleadings and no evidence on that matter.

[43] The appeal should be refused.

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Reply for the defenders and appellants

[44] The relevant decision was the refusal of a discretionary bursary. That was not to be confused with the issue of education.

[45] There were two procedural points. First, this court could not make findings (cf Allardice v Wallace). Secondly, the courts had disapproved of the

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practice of simply attaching submissions to a judgment, particularly as one could not know what the court had made of the submissions (Lothian Regional Council v A at [pp.381G–382A;] p.863K).

[46] The sheriff had to apply the 2010 Act, dealing with each section. The sheriff had failed to do so.

Discussion

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[47] In my opinion, this appeal illustrates the difficulties which may arise where two separate legislative schemes apply to one case. The two schemes in this particular case are (a) the education legislation, and (b) the equality and non-discrimination legislation.

[48] As the Commission for Equality and Human Rights (EHRC) point out in their written submissions, para.10: “. . . duties under the Equalities Acts may have the effect that local authority powers arising under other legislation ought to be exercised in a particular way in order to avoid unlawful discrimination”. That submission reflects s.149 of the Equality Act 2010, which provides: [Her Ladyship quoted the section as set out above and continued:] [49] The public authority in the present case is the local education authority (the defenders): Equality Act 2010, s.150 and Sched.19, Pt.3. In terms of s.1 of the Education (Scotland) Act 1980, the defenders have a duty to “secure that there is made for their area adequate and efficient provision of school education and further education”. I accept that their duty to provide school education normally ceases when a pupil reaches the age of 18 (see paras 15–16 above). However in terms of s.1(2A) of the 1980 Act, the education authority also has a “power to provide . . . further education for their area . . .”. Section 49 is an example: it provides that: “(1) . . . an education authority shall have power to grant . . . and make payments in pursuance of, bursaries, scholarships or other allowances to persons over school age attending courses of full-time or part-time education. . . .” Another example of a power to fund pupils beyond the age of 18 is s.20 of the Local Government in Scotland Act 2003 (financial assistance to advance wellbeing): see the written submissions for the EHRC, para.10.

[50] Against that background, I accept that Dr K M’s request for “a further year funding” for 2013–14 for her son, who would by then be over the age of 18, would prima facie appear to be a request for the provision of school education for someone no longer a child or young person, and would appear to invite a justifiable refusal. Put another way, the education legislation contains such a clear cut-off point at the age of 18 that no education authority could be prima facie criticised for refusing to provide school education for someone who had attained the age of 18.

[51] However in the pursuer’s case, two additional factors had to be taken into account, namely: (i) the pursuer’s admitted disability; and (ii) the equality and non-discrimination legislative scheme, including the Equality Act 2010, the Equality Directive 2000/78/EC of 27 November 2000, the 2012 Regulations and the Equality Act 2010 Code of Practice.

[52] As set out in Dr K M’s letter of 16 April 2013 enclosing a letter from the head teacher of Butterstone, the pursuer’s disability meant that he needed more time than other pupils to develop socially, emotionally and academically such that he could make a realistic attempt to transition to the next stage. The sheriff’s findings in fact cover this matter in full: see findings in fact 2 6, 9, 12–15, 24–25, 31; and see too the discussion section, para.11. The letter was widely-framed: it was not restricted to a request under the Education

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(Additional Support for Learning) (Scotland) Act 2004; nor was it restricted to “the provision of education”, as the letter used phrases such as “. . . a further year funding . . . I hope you can support D in achieving his potential through another year at school . . .”.

[53] As a result, I consider that Dr KM’s request in her letter of 16 April 2013 was more complex than it might at first appear. The defenders (who were well aware of the pursuer’s disabilities and “how his disabilities affect his life”: finding in fact 4) required to give that request careful thought.

[54] In particular, the defenders had to consider the fact that their duty in normal circumstances was to provide school education for children and young persons up to the age of 18. But in addition they had to consider that the pursuer had a disability qualifying in terms of s.6 of the Equality Act 2010 (an autistic spectrum disorder and dyspraxia). They had to take into account the statutory powers which they could exercise, and the terms of Dr K M’s widelyframed letter. Further, the defenders had to take into account the terms of s.149 of the Equality Act 2010; ss.12(5), (6) and 13 of the Education (Additional Support for Learning)(Scotland) Act 2004; and the ‘Supporting children’s learning code of practice’, paras 27 et seq (school to post-school transition): see para.17 above. Note too the sheriff’s discussion section para.11, 13 and 14 referring, inter alia, to reg.5(1) of the 2012 Regulations.

[55] In these circumstances I consider that the sheriff, who heard and considered all the evidence and the submissions (both written and oral), was entitled to reach certain conclusions on questions of mixed fact and law, as follows.

[56] In my opinion the sheriff was entitled to conclude as a matter of mixed fact and law that the defenders had exercised, expressly or impliedly, one of their discretionary powers in order to fund the pursuer’s school education for the three weeks following upon his 18th birthday (finding in fact and law 6). I have reached that view because, when considering the pursuer’s case in May 2013, the defenders knew that they were funding his school attendance for a period of three weeks even although he was aged over 18. They did not claim a refund from the pursuer or his family. The sheriff was entitled to proceed on the basis that they used one of their discretionary powers (which he identified as s.49 of the 1980 Act) in order to permit the pursuer to complete his final year although he had become 18 during that year.

[57] I consider that the sheriff was also entitled to find in fact and law that: “10. In making the decision of 23 May 2013 the defenders relied upon a policy (sc provision), criterion or practice namely that they would not fund the education of persons over the age of 18 other than those who attained the age of 18 in their final year of schooling (emphasis added).”

[58] That being so, the defenders were aware not only that there was a clear cut-off point at the age of 18, but also that they had certain powers and discretions which could be exercised to assist a pupil who had reached the age of 18. The defenders were aware that they could, if they so chose, offer assistance to the pursuer: (a) in relation to completing the school year during which he became 18; and (b) in relation to a further year at Butterstone which, according to evidence accepted by the sheriff, was hoped would give the pursuer sufficient time both to learn from the courses offered by the school and also to develop socially, emotionally, and academically, thus reaching the desired stage which non-disabled pupils reached earlier and more easily.

[59] In those circumstances, I consider that the sheriff was entitled to find that there had been indirect discrimination by the defenders’ letter of 23 May 2013 in terms of s.19 of the 2010 Act in respect of the protected characteristic

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of disability. The sheriff was entitled to take the view that the proper interpretation of the letter was that the defenders had made a decision that they would not advise the pursuer and his family of the various options and strategies available and invite further discussion or applications for grants or bursaries, thus failing to alert the pursuer and his family to ways of facilitating the pursuer’s development and learning processes so that he, as a disabled person, could endeavour to achieve the appropriate social, emotional and academic standards which would render his attendance at college—or indeed any other school-leaving goal—more feasible. The defenders’ response, applying an apparently straightforward and neutral provision, criterion or practice (namely “that they would not fund the education of persons over the age of 18 other than those who attained the age of 18 in their final year of schooling”: sheriff’s finding in fact and law 10) put the pursuer as a disabled person at a substantial and particular disadvantage compared with a hypothetical group of non-disabled persons aged 18 or over throughout the UK who had not been held back by a disability such as that suffered by the pursuer and who were engaged in the process of transitioning—unhampered by that disability—to further education and/or employment. This was particularly so bearing in mind the context, which included the defenders’ duties to take steps during the period of the pursuer’s transitioning (ss.12(5), (6) and 13 of the Education (Additional Support for Learning) (Scotland) Act 2004; the ‘Supporting children’s learning code of practice, paras 27 et seq)—duties which the defenders appear to have failed satisfactorily to fulfil (sheriff’s finding in fact 23 and discussion section paras 2, 5–6, 11, 13–14). As Lady Hale explained in Homer v Chief Constable of West Yorkshire Police, para.14, the wording of s.19: “(was) not intended to make it more difficult establish indirect discrimination: quite the reverse . . . Now all that is needed is a particular disadvantage when compared with other people who do not share the characteristic in question. . . .” (cf the written submissions of the EHRC, para.23).

[60] The defenders could reasonably have taken steps to assist the pursuer.

The defenders had a duty in terms of s.20 to make “reasonable adjustments” for the pursuer: ss.20(3) and 29(2) and (7) of the 2010 Act. A “reasonable adjustment” to their provision, criterion, or practice of non-funding beyond the age of 18 (unless to complete a final year) could have included advising Dr K M of the various options available (for example, a bursary in terms of s.49; or financial assistance to advance well-being in terms of s.20 of the Local Government in Scotland Act 2003). Obviously the success of an additional year could not be guaranteed; also there would be financial considerations.

But the sheriff took those matters into account (discussion section paras 13, 14 and 15; see too Noor v Foreign & Commonwealth Office, para.33). The sheriff was in my view entitled, on the basis of the evidence and submissions before him, to find in fact and law that “The defenders’ treatment of the pursuer was not a proportionate means of achieving a legitimate aim”—in other words, that there was no justification for their treatment. Thus the sheriff was entitled to conclude that the defenders had failed to comply with their duty to make reasonable adjustments (s.21 of the 2010 Act).

[61] The breach of ss.19 and 20 could not, in my opinion, be cured by the subsequent treatment in August to October 2013 of the summary application as a request for a bursary in terms of s.49, resulting in a refusal of a bursary on apparently valid and non-discriminatory grounds (cf the sheriff’s view at para.4 of the discussion section). What was required was action as described in paras 53–60 above to have been taken timeously following upon Dr K M’s letter of 16 April 2013.

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[62] I accept that the sheriff may not have expressed his reasoning and conclusions in precisely the same manner as is set out above. But there is in my view a clear sufficiency in his findings in fact, findings in fact and law, and note, to support his conclusion that the defenders unlawfully discriminated against the pursuer in May 2013.

[63] As I am persuaded that there was, in May 2013, unlawful indirect discrimination against the pursuer arising from his disability contrary to s.19 of the 2010 Act, with a failure to make reasonable adjustments contrary to s.20 of the 2010 Act, it is unnecessary to examine in detail any other provisions in the equality and non-discrimination legislative scheme. I would add obiter that I was not persuaded that there was any direct discrimination arising from disability (s.15), or that there was any discrimination (direct or indirect) based solely on age (ss.5, 13, 19), although age was the neutral criterion involved in the indirect discrimination arising from disability in terms of s.19 (cf para.59 above). I do not therefore agree with the sheriff’s findings in fact and law 9 and 15. However that does not affect the conclusion that there was unlawful discrimination by the response letter dated 23 May 2013—a conclusion which, in my view, the sheriff was entitled to reach, as discussed above.

[64] The only remaining issues are: (i) the remedies available; and (ii) quantification of any monetary award. I note that no specific arguments were advanced in this appeal in respect of either of those matters.

[65] In terms of s.119(3) of the 2010 Act: “The sheriff has power to make any order which could be made by the Court of Session—

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(a) in proceedings for reparation; (b) on a petition for judicial review.”

D [66] Against that background, I consider that the sheriff was entitled to grant an award representing damages or compensation for the breach of ss.19 and 20 of the 2010 Act. My initial view was that the sheriff was entitled to make the awards he did. However I have been persuaded by the reasoning set out in the opinions of Lord Bracadale and Lord McGhie that it was not open to the sheriff to make an award for the school fees payable for the year 2013–14, for the reasons they give. Accordingly that part of his interlocutor falls to be recalled. The sheriff was entitled to make an award of damages in respect of solatium reflecting the anxiety and upset suffered by the pursuer as a result of the uncertainty caused by the refusal of funding in May 2013. On the information before me, I am unable to criticise the amount awarded.

E

Decision

[67] For the reasons given above, I propose that the appeal be allowed to the extent that the sheriff’s interlocutor of 29 September 2014 is recalled and in place thereof the following interlocutor granted: “THEREFORE: sustains the pursuer’s pleas-in-law numbers 1, 4 and 6; declares that the defenders unlawfully discriminated against the pursuer; grants decree against the defenders in the sum of TWO THOUSAND FIVE HUNDRED POUNDS (£2,500) sterling with interest at the rate of 8 per centum per annum from date of decree until payment; repels all other pleas-in-law; finds the defenders liable to the pursuer in the expenses of the action and allows accounts thereof to be submitted to the Auditor of Court to tax and to report; certifies the cause as suitable for the employment of junior counsel.”

The question of expenses should be continued.

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LORD BRACADALE [68] I am grateful to your Ladyship in the chair for setting out the circumstances, the relevant statutory provisions and the submissions of the parties. I have come to the view that while the sheriff was entitled to find that the local authority did discriminate against the pursuer, the claim in respect of the payment of the fees for the seventh year at the New School must fail. In this respect I agree with the opinion of Lord McGhie which I had the benefit of reading in draft. I have come to this view for reasons which I shall endeavour to explain below.

[69] The letter sent by Dr K M dated 16 April 2013 was clearly a request for funding for a further year for the pursuer to attend the New School; the reason given was the difficulty with transition and this was supported by a letter from the head of the school. Your Ladyship has set out the terms of the response of the local authority dated 23 May 2013 refusing further funding after the pursuer reached the age of 18 years. The sheriff found that it was this decision that gave rise to discrimination and I agree that he was entitled to do so.

[70] At the heart of this case is the transition of the pursuer from school to further education or training. In that respect, the local authority had certain duties, particularly under the Education (Additional Support for Learning) (Scotland) Act 2004, s.12(5), (6) and (13). On the evidence before him the sheriff was satisfied that the local authority had failed properly to fulfil these duties. On the evidence before him he was no doubt entitled to come to that conclusion. But that in itself would not give rise to a cause for an action by the pursuer against the local authority for damages in respect of discrimination.

Section 149 of the Equality Act 2010 (the 2010 Act) provides for the public sector equality duty under which a public authority in the exercise of its functions must have due regard to eliminate discrimination; advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; and foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

In terms of subs.(3) having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard to the need to do various things, including taking certain steps. Section 149 falls within Pt.11 of the 2010 Act which is headed “Advancement of equality” and within Ch.1 of that part which is headed “Public sector equality duty”. It is, however, important to note that s.156, which is within the same chapter, provides that “a failure in respect of a performance of a duty imposed by or under this chapter does not confer a cause of action at private law”. In order for an individual to raise an action for damages in respect of discrimination by a public authority against that individual it would be necessary to rely on one or more of the specific sections of the 2010 Act dealing with discrimination.

[71] Before the sheriff the pursuer made a claim for discrimination based on a number of sections of the 2010 Act. The judgment of the sheriff is difficult to follow, not the least because he has failed to relate the heads of claim to the relevant statutory provisions. The reader is driven to infer from the language used under which section or sections the sheriff found discrimination to have been proved.

[72] The language used by the sheriff makes it plain that he based his decision in relation to the claim for payment of the fees for a further year at the New School on the provisions of the 2010 Act relating to the duty to make reasonable adjustments (findings in fact and law 10 and 11). It is clear that the

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reference to “policy, criterion or practice” in finding in fact and law 10 is simply an error and what the sheriff intended was a reference to “provision, criterion or practice” which phrase features in ss.19 and 20 of the 2010 Act. In finding in fact and law 11 the sheriff found that it would have been a reasonable adjustment for the local authority to make payment of the pursuer’s fees for the academic year 2013–14. It is necessary therefore to examine the provisions in relation to the duty to make reasonable adjustments.

[73] The local authority is a person who exercises a public function in terms of s.29 of the 2010 Act. The local authority in the exercise of its public function must not do anything that constitutes discrimination (s.29(6)). In addition, in terms of subs.(7) the local authority has a duty to make reasonable adjustments.

[74] The duty to make reasonable adjustments is provided in ss.20, 21 and 22 and, in relation to a person, such as the local authority, exercising a public function, Sched.2. The duty comprises three requirements (s.20(2)). For present purposes only the first requirement of the duty to make reasonable adjustments set out in s.20(3) is relevant: that is a requirement, where a PCP puts a disabled person at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage. Failure to comply with the first requirement is a failure to comply with a duty to make reasonable adjustments (s.21(1)). Failure to comply with that duty in relation to a person constitutes discrimination (s.21(2)).

[75] In relation to persons exercising a public function, where a duty to make reasonable adjustments is imposed, Sched.2 applies. This has the effect of modifying the provisions in relation to the making of reasonable adjustments in the case of a person exercising a public function. In terms of para.2 of Sched.2 the reference in s.20(3) to a “disabled person” is to “disabled persons generally”.

This means that the duty is owed to disabled persons generally, or perhaps to a particular class of disabled persons; it is an anticipatory duty which means that persons exercising public functions must anticipate the needs of disabled people and make appropriate reasonable adjustments (M M v Secretary of State for Work and Pensions, Elias LJ paras 36–45; Paulley v First Group plc).

[76] Accordingly, it is necessary to identify what would be a reasonable adjustment in respect of disabled persons generally or a class of disabled persons before exploring whether in a particular case in terms of s.21(2) there has been a failure to comply in relation to an individual. Underhill LJ put it this way in Paulley at para.63: “The starting point is the principle, emphasised by both parties in their submissions before us, that, as Lord Dyson MR says in Finnigan [[2014] 1 W.L.R. 445], at para.32: “the duty to make reasonable adjustments is anticipatory. It is owed to disabled persons at large in advance of an individual disabled person coming within the purview of the public authority exercising the relevant function.”

“It follows, as he goes on to say, at para.36, that: “It is importantn . . . to keep in mind the distinction between (anticipatory) changes to a (PCP) which are applicable to a category or sub-category of disabled persons and changes which are applied to individual disabled persons on an ad hoc basis. The duty to adjust a (PCP) is to be judged by reference to the former, and not the latter.”

Thus the questions: (a) whether a given PCP puts disabled persons generally at a substantial disadvantage in comparison with non-disabled persons; and (b)

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whether, if so, the defendant has failed to take reasonable steps to avoid that disadvantage are to be decided by reference to the disadvantage suffered by the relevant class of disabled person rather than by the individual claimant. The question whether, if such a breach is established, it constitutes a breach “in relation to” the claimant—see s.21(2) of the Act—is separate and comes later.”

[77] The sheriff identifies the PCP at finding in fact and law 10 as being “that (the local authority) would not fund the education of persons over the age of 18 other than those who had attained the age of 18 in their final year of schooling”. In the discussion section at para.8 he describes it as “in no circumstances would they fund a pupil’s attendance at school for a seventh year or for that matter allow them to attend for a seventh year”.

[78] The relevant matter for the purposes of the first requirement in s.20(3) in the present case is the transition from school to further education, training or work. The question must then arise as to what would be a reasonable adjustment in respect of disabled persons in general or the appropriate class of disabled persons. In the case of the pursuer it would be necessary to identify the class of disabled persons to which he belonged and in respect of whom a reasonable adjustment would be the payment of fees for a seventh year. If such a class could be identified and the pursuer came within that class then the question would arise as to whether the local authority had discriminated against the pursuer by failing to comply with that duty in relation to him (s.21(2)).

[79] The sheriff does not appear to have approached the application of the duty to make reasonable adjustments in this way. He has concentrated entirely on the treatment of the pursuer by the local authority. While I can see that a reasonable adjustment in relation to a class of disabled persons who were approaching the age of 18 and were having difficulty with transition might be to advise the disabled persons in that class of the availability of discretionary bursaries to fund a seventh year, or to treat a request for funding as an application for a discretionary bursary, I do not think that it can be the case that a reasonable adjustment for such a class of disabled persons would be to pay the fees for a further year of school education in every case. I agree with the conclusion of Lord McGhie that on the material before us it is not possible to identify a class of disabled persons in respect of whom it could be said that payment of fees by way of bursary would be a reasonable adjustment and that it is highly unlikely that payment of such fees would ever be capable of applying as a reasonable adjustment in a generic way.

[80] A further reason why I consider that it was not open to the sheriff to find in favour of the pursuer in respect of the claim for payment of the fees under ss.19 and 20 of the 2010 Act relates to the approach which the local authority should have taken in their response on 23 May 2013. Had the local authority treated the letter dated 16 April from Dr K M as an application for a bursary then it might have decided to pay the fees or it might not. It is instructive to note in this regard what the sheriff himself says in relation to this in para.13 of his discussion: “At the time the defenders were asked to fund an additional year they made no proper assessment to conclude whether or not it would be a reasonable adjustment vis à vis any alternatives. Such assessment may well have enabled them to reach a justifiable conclusion that it was not. They would have been able to consider, as they did subsequently, all the evidence for and against the request.”

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application for a bursary it exercised its discretion by refusing to pay the fees and giving reasons; that was recognised by the sheriff not to be discriminatory.

This reinforces my view that the extent of the discrimination against the pursuer did not go beyond the failure to advise him of the availability of a bursary or treating the letter as an application for a bursary.

[81] I agree that the claims of discrimination under ss.13 and 15 were not made out. I am satisfied therefore that in this case there was a breach of the duty to make reasonable adjustments and that the local authority failed to comply with that duty in relation to the pursuer; in the light of that the award in respect of the claim based on compensation for injured feelings should be affirmed. But the breach of duty would not give rise to a requirement to pay the fees for a further year at the New School and I would allow the appeal to the extent of quashing the liability in respect of the payment of fees for an additional year at the New School.

LORD MCGHIE [82] I gratefully adopt Lady Paton’s careful exposition of the background to this appeal and her helpful citation of relevant statutory provisions. I have found the inter-related provisions of the 2010 Act difficult to analyse and difficult to apply to the circumstances of the present case. But I am satisfied that the sheriff’s decision cannot stand and that, as agreed by counsel, we should make our own decision on the material available rather than return it to the sheriff for further procedure. I would allow the appeal in part as I consider that the award based on a finding of liability to pay the school fees cannot be supported.

[83] It is impossible to approach the matter without a feeling of sympathy for the pursuer and an expression of admiration for his family who have not only campaigned on his behalf but provided substantial support. There is no doubt that it was an entirely sensible and appropriate decision that he should have a further year at the New School to allow him to make the most of his school years. However, it must be said that I have found nothing in the wide range of duties explored before us to suggest that he had a positive right to be funded by the defenders after he was 18. If the defenders had dealt with everything properly in May 2013, there would, in my view, have been no basis for a challenge to their ultimate decision that he should not receive a bursary.

[84] The pleadings and submissions in this case covered so much material that the sheriff can perhaps be forgiven for failing to identify the particular statutory grounds on which he based his decision. However, although I shall have to deal with the specifics of his approach to the concept of reasonable adjustment in the context of the defenders’ duties under the 2010 Act, I see no purpose to be served by more general analysis of his findings or reasoning.

The problem is that while the sheriff was careful to set out the statutory basis for several of his preliminary findings in fact and law he did not do so in respect of any of the critical findings relating to discrimination. An underlying difficulty is that, on the face of it, he appears to have based his thinking to a considerable extent on his view of the defenders’ failure to perform all the duties incumbent on them in terms of the Education Acts. Section 149 of the 2010 Act does impose a duty on the defenders which encompasses such duties but s.156 expressly provides that this is “not a cause of action at private law”.

It does not appear that any reference was made to that section in proceedings before the sheriff.

[85] The exercise of teasing out whether and to what extent duties which are not a cause of action at private law may be founded on in an action at

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private law is plainly one of potential difficulty. There is no indication that the sheriff attempted this exercise. Indeed, counsel did not attempt the exercise.

For the pursuer, it was accepted that the case was based on the provisions of the 2010 Act. Mr McKendrick said that the rest was simply relevant background. How it might come to be relevant was left an open question.

[86] I have come to accept that there is sufficient material in the findings in fact and in the clear inferences to be drawn from the undisputed timetable of events and written material to allow us to deal with the legal issues. The pursuer’s case was based on the duties imposed on the defenders by s.29 of the 2010 Act and the detail of the duties to be found in ss.13, 15, 19 and 20: see submissions at p.54 of appeal print.

[87] The sheriff does not expressly find a breach of any specific section. The critical findings in fact and law 8–17 are essentially just findings in fact. At 7 of his discussion he says simply that, “the claim of age discrimination succeeds”.

This may be taken to imply a breach of s.13. As will be seen, I have come to accept that there was an entitlement to compensation for “discrimination” and that the award the sheriff made in that respect cannot be challenged. It is therefore unnecessary to deal in any detail with the sheriff’s findings of discrimination. But it may be said that I consider that his characterisation of the defenders’ argument on age discrimination as being “naïve” (discussion 6) puts things the wrong way round. The defenders’ defence was the sophisticated one that it was necessary to look beyond the simple fact of age to see that the real reason for the decision was that there was no statutory obligation to fund schooling for people over 18. At a simplistic level that can, of course, be viewed as discrimination based on age. But I accept that on a proper analysis, there was no breach of s.13 because the comparison being made by the defenders was not between young people of 17 and those of 18 but between people in respect of whom they had a duty to provide education and those in respect of whom they had no such duty.

[88] The defenders’ decision in May 2013 might well have been justified under s.13(2) because a decision based on a statutory scheme can normally be taken to reflect a proportionate means of achieving a legitimate aim. But, in any event, I am satisfied that the defenders were entitled to rely on s.23. Where a statutory duty applied to one group and not another, this was a material difference between the circumstances of the two different age groups. I do not consider the sheriff’s conclusion on this to have been well founded.

[89] We heard no persuasive reason to counter Mrs Scott’s reliance on s.23, but it might be added that if the defenders are wrong, it is not clear what this section adds. The start point under s.13 is to establish that the discrimination is “because” of the protected characteristic. Cases like Shamoon make it clear that it is not enough to point to a protected characteristic and show a comparison of outcome. It is necessary to show that the different outcome is because of that characteristic. In many cases there would be no need for s.23 because that causal link will be missing. There may be circumstances where comparison is unnecessary—as discussed by Lord Rodger, for example, in Shamoon at ] para.]142. But on any view, s.23 makes it clear that a simplistic approach to s.13 is insufficient. The mere difference of age, superficially the reason for the discrimination, is not sufficient for the purposes of the Act. [90] The sheriff makes no attempt to base his decision on indirect discrimination but it is appropriate to say a few words about s.15. This provides that it is discrimination against a disabled person, B, to treat B “unfavourably”.

This does not require comparison with another person. I think it is right to say that this provision requires us to consider the October decision because the

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May decision was not based on disability. Be that as it may, there must, on any view, be some causal link. The sheriff has made no appropriate finding. The pursuer required further education as a consequence of his disability. He did not get it. Even if this can properly be described as “unfavourable treatment” in the context of s.15 (which I doubt), it is hard to see how it could be said that the defenders treated the pursuer unfavourably “as a consequence” of the disability. The defenders decided that the pursuer was not entitled to a continuation of his education because he was outwith the age limit for the statutory scheme. That was not a consequence of his disability in any way but a consequence of his age and their application of the statutory scheme.

Although the apparent need for a bursary or grant was a consequence of disability, refusal of a grant can hardly be so described.

[91] In any event, the substantive decision was the decision to make an award of £43,410 in respect of the annual school fees. The sheriff’s comments and reasoning make it clear that this was based on his view of the provisions of s.20. The decision proceeded on the basis that making a payment of that amount would have been a “reasonable adjustment” for the purposes of the Act. That is explicit in the finding in fact and law 11. At 9 of the discussion the sheriff says: “Two issues arise from the operation of the PCP, firstly, does it put the pursuer at a substantial disadvantage compared with non-disabled students and is the payment of his fees for an additional year reasonable to avoid that disadvantage?” He goes on to answer these questions in the affirmative.

[92] Before looking further at the provisions dealing with reasonable adjustment it is necessary to identify the PCP which requires adjustment. The defenders’ letter of 23 May 2013 is properly to be read as evidencing application of a criterion or practice of dealing with requests for funding for education after the age of 18 as falling to be refused because the statutory obligation ceased at that age. As explained by Lady Paton at paras 52–57, the sheriff was entitled to make the finding of fact and law 10: “In making the decision of 23 May 2013 the defenders relied upon a policy (sic) criterion or practice namely that they would not fund education of persons over the age of 18 etc.”

His discussion at 8 shows that he had in mind the statutory provision and the word “policy” can be taken as a simple typing error. The letter from Dr M was not a request to provide education. It was explicitly a request to provide funding. The defenders appear to have applied a practice or criterion of relying on an age cut off without requiring special consideration of the circumstances of the disabled. Some categories of disabled person would plainly be at a substantial disadvantage within the meaning of s.20(3) compared with people whose education was unimpeded by disability. There is no justification for interfering with the sheriff’s findings that there was a PCP applying a simple cut-off. As a broad approach, such a cut off was entirely understandable but I am satisfied that it plainly required some adjustment to deal with young people in special circumstances.

[93] To determine the nature and scope of the statutory duty to make reasonable adjustment it is necessary to have regard to a number of linked provisions. The duty itself is found in Pt.3 of the Act which deals with services and public functions. Section 29(1) provides a duty not to discriminate in the provision of services. This subsection is not easy to apply literally as it makes no reference to protected characteristics but s.29(6) provides three separate duties in the exercise of a public function: duties not to discriminate, not to harass and not to victimise. The duty not to discriminate plainly relies on the examples of “discrimination “defined in earlier sections. Section 29(7) seems to create an entirely separate type of duty. It simply provides that “a duty to

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make reasonable adjustments applies to a service provider”. But that duty to make reasonable adjustments is converted into a duty not to discriminate by s.21(2). The scope or content of the duty appears in s.20—the terms of which are set out fully by Lady Paton at 19.

[94] For present purposes the relevant provision is s.20(3) which applies where a PCP puts a disabled person at a substantial disadvantage. “Substantial” is defined by s.212 to mean “more than minor or trivial”. The duty under s.20(3) is to take such steps as it is reasonable to have to take to avoid the disadvantage. However, it was not disputed that the scope of that duty was limited or further defined by the provisions of Sched.2—also set out by Lady Paton at 19. The important provision is para.2(2) which is in the following terms: [His Lordship quoted the section as set out above and continued:] I am satisfied that the effect of this provision is that the adjustment is to be one capable of applying to disabled persons as a class and not to be specific to one individual.

[95] The nature of the duties as anticipatory and to be assessed by reference to a class of disabled person rather than an individual pursuer was described

by Lewison LJ in Paulley v First Group plc,, para.31, as “common ground”. I did not understand it to be disputed by Mr McKendrick that this meant that any adjustment to a PCP required to be generic. The critical point is that the reasonable adjustment required by the statute is to be one capable of general application to an identifiable general class. It is an adjustment to a PCP which applies to meet the needs of the disabled. In practice it will rarely be possible to decide whether an adjustment is reasonable without having regard to specific classes of disability. The category of being disabled would normally be too wide to allow a single type of adjustment. It seems to me that to determine whether an adjustment is reasonable it will normally be necessary to identify a class or group of disabled persons into which the pursuer would fall and then consider whether a proposed adjustment is reasonable in relation to that group. The reasonableness or otherwise of a proposed adjustment may well depend on the size of the group.

[96] It is unnecessary at this stage to deal with the matter in terms of specific onus although it normally makes sense to require the pursuer to identify some possible adjustment of the PCP which allows it to be applied in a way which meets the needs of the class of the class of disabled people of whom the pursuer is one. It might be for the defenders to show why that was not reasonable. The problem in the present case is that the sheriff has made no attempt to approach the matter generically.

[97] It would be possible, no doubt, to start by looking at disabled young persons generally and testing the reasonableness of a proposed adjustment by reference to that group. A PCP of applying a funding cut off at 18 plainly required some adjustment to allow for consideration of the needs of the disabled. I would have no difficulty in holding that when dealing with a disabled young person it would have been a reasonable adjustment to their practice to ensure that he was advised of the possibility of applying for a bursary. A more direct adjustment of policy when considering an application for funding by a person over 18 suffering from a disability would be to ensure that when any application was made by such person, however worded, it was treated as applying for any form of financial assistance which the defenders were empowered to provide. The defenders failed to apply any such adjustment when considering the pursuer’s application.

[98] But advising of the possibility of obtaining a bursary or considering whether to exercise a power to grant a bursary is not the same as making an

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actual payment. If a reasonable adjustment is one which is to be applied generally and not one tied to the circumstances of a specific applicant, it is plain that varying or adjusting the normal practice by agreeing to pay the fees of every disabled person who wanted to continue schooling after 18 would go beyond what we could determine to be reasonable—at least in absence of any persuasive evidence to that effect. Put in positive terms, it might readily be seen to be a reasonable adjustment for the defenders to say: “Our PCP is to provide no funding for school education after a child reaches 18 but if that child’s schooling has been impeded in any way by a disability we shall give careful consideration to his circumstances to decide whether he should receive funding by way of a bursary.”

But it is not so obvious that the policy required adjustment to the effect that if a child’s schooling had been impeded to any extent by disability, payment of a bursary to allow existing schooling to continue beyond 18 would be made.

[99] An attempt to find a class of disabled persons in respect of whom it could be said that payment of fees by way of bursary would be reasonable is far from straightforward. I am not satisfied that it can be done on the material before us. We might have been slow to interfere with any finding of the sheriff attempting to define a generic approach but there is no basis for us to attempt that exercise ourselves and consideration of the matter points to a conclusion that it is highly unlikely that payment of full fees would ever be capable of applying as a reasonable adjustment in a generic way. Defining the class in terms of persons whose disabilities have interfered to any extent with the progress of their schooling presents no great difficulty if the reasonable adjustment required is simply to give consideration to the granting of a bursary in all such cases. But to narrow the class further so as to make it essential to provide funding is not an exercise I feel competent to embark upon at this stage. I am driven to conclude that this goes beyond what could be regarded as a reasonable adjustment.

[100] The sheriff’s reasons for his application of a reasonable adjustment were set out at length. It is clear that they involved a close examination of the position of the pursuer. He did recognise that if the defenders had made a proper assessment—by which he apparently had in mind the duties imposed by reg.5 of the 2012 Regulations—the defenders might well have concluded that funding for an extra year at the New School was not appropriate. He found they made no assessment. But insofar as he was relying on these Regulations, it is plain that the pursuer’s case cannot rest on them. The need for assessment can be accepted as a reasonable adjustment but that does not advance the case for adjustment by way of payment of a bursary.

[101] The sheriff made reference to the decision of the EAT in Noor v Foreign and Colonial Office [2011] ICR 695. That was an employment case.

The duty expressly relied on was that imposed by s.4A(1) of the Disability Discrimination Act 1995. That section does not use the term “reasonable adjustment”. It creates an obligation on employers to “take such steps as it is reasonable, in all the circumstances of the case, for him to have to take” to prevent a particular PCP having a disadvantage for the “person concerned”.

It seems plain that this requires an adjustment adapted to the needs of the individual employee—or potential employee. The discussion in the case in terms of “reasonable adjustment” may have been intended as a shorthand reference to the above provisions of s.4A(1) or may have been a reference to some statutory provision, not referred to in the judgement. At para.20 the Tribunal quoted s.18B(1) of the Act which does refer to circumstances where

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there is a duty to make reasonable adjustments but it is not clear from the decision whether the Tribunal regarded that as broadly equivalent to the duty under s.4A(1). It is sufficient to say that the general approach of the Tribunal in Noor may be misleading if relied on as a guide to the proper application of the duty to make reasonable adjustments in the context of the 2010 Act. [102] That said, there is no reason to doubt the specific proposition which the sheriff took from the case which was that it was not necessary to show that an adjustment would be completely effective for it to be reasonable. It might be added that it seems clear that reasonableness requires to be assessed in light of the time when the adjustment is applied and not with the benefit of hindsight. It appears that the sheriff had been invited to consider how the extra year at New School had turned out. He properly disregarded that. But following his examination of the specific circumstances of the pursuer, the sheriff repeated his conclusion: “In the circumstances it cannot be argued that the adjustment was not reasonable”: [para.]15. As we have seen, the adjustment in question was payment of the pursuer’s school fees for the additional year: [para.]9. It is plain from this that the sheriff treated the requirement to make reasonable adjustment to a PCP as something to be applied at a personal or ad hoc level. The reasoning is clearly indicative of a misunderstanding of the nature of reasonable adjustments in the context.

[103] As indicated above, I am persuaded that we can properly proceed on the basis that the defenders failed to make any adjustment to their practice of ending funding at 18. I see no reason to challenge the finding that an award of £2,500 was appropriate for the uncertainty and anxiety which this must have caused. But I am satisfied that the award of £45,910 cannot be supported. It turns on the proposition that the reasonable adjustment required under s.20 was one tailored to the specific circumstances of the pursuer. This leaves out of account the provisions of Sched.2. I see no basis upon which we could make a finding that payment of the full amount of the pursuer’s fees for an additional year was a reasonable adjustment which might have been applied to any identified group of disabled so as to allow it to be described as a generic adjustment or one applying to the disabled generally.

[104] In the result, I would allow the appeal insofar as necessary to quash the first finding of liability in the sum of £45,910 is concerned and substitute a liability in the sum of £2500 with interest.

For the pursuer and respondent: McKendrick, instructed by Drummond Miller, Solicitors, Edinburgh, for Govan Law Centre, Solicitors, Glasgow.

For the defenders and appellants: J. Scott QC, Stalker, instructed by Balfour + Manson LLP, Solicitors, Edinburgh.

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A COURT OF SESSION

18 March 2016

Inner House (Extra Division) Lord Drunmmond Young, Lady Clark of Calton and Lord Malcolm ST ANDREWS ENVIRONMENTAL PROTECTION ASSOCIATION LTD

Petitioner (Reclaimer)

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for Judicial Review of a decision of Fife Council of 16 May 2014 to grant planning permission in principle for the erection of a secondary school with associated facilities at land to the north of Pipeland Farm, Largo Road, St Andrews.

Respondents Town and country planning—Judicial review—New school development situated in green belt and contrary to development plan—Whether no other site available—Whether permission should be granted

C

Judicial review—Town and country planning—New school development situated in green belt and contrary to development plan—Whether no other site available—Whether permission should be granted The proceedings in the Outer House are reported at (OH) 2015 S.C.L.R. 535.

On 16 May 2014 Fife Council granted planning permission in principle for a new secondary school, and associated facilities, including playing fields (the proposed new Madras College) on land owned by Hermiston Securities Ltd in St Andrews. The applicant for permission was the property services department of the council as education authority. The development was in the green belt and on prime agricultural land, and thus was contrary to the terms of the development plan and it was a controversial decision. The petitioner, with the benefit of a protective expenses order, raised a petition seeking judicial review of the grant of planning permission. In the petition, it was claimed that the planning committee recommended that the application be refused, in the interest of protecting the countryside, the green belt and prime agricultural land. It averred that there was insufficient evidence that no other site was available for the new school; that the proposal was contrary to local plan policies; and that no material considerations justified setting them aside. The application came before the full council, which granted the application, subject to a number of conditions. In doing so significant weight was placed on the need for the school and the lack of a “suitable available alternative site” within the environs of St Andrews. Weight was also placed on the need for a single site facility, which was difficult to provide because ta very large site would be required. The committee considered that another possible site, which had been identified, would not allow for a single site facility. The Scottish Ministers had intimated that they did not intend to call in the planning application.

The Lord Ordinary refused the application for judicial review. He found that the planning authority did not overlook the possibility of the other site being used in conjunction with playing fields at a different site. The petitioner reclaimed.

The petitioner repeated the submission that the planning report and the planning authority erred in treating the alternative site as a split site and in failing to carry out a proper planning balancing exercise, before concluding

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that the site chosen was the only site available. The requirements for the new school had been treated as determinative, and thus there was no assessment of whether the planning disadvantages of the site chosen by the respondents outweighed any educational advantages flowing from it, nor whether any disadvantages of another site outweighed the benefits which would flow from avoiding the development in the green belt. The planning officer’s report foreclosed the planning assessment which the planning authority was required to carry out. It did so by advising that the decisions taken by the education authority resolve the key planning issue, namely whether the need for a new school justified building on the green belt. It diverted the authority from the site allocated as an option for a new school in the local plan and steered the planning authority away from the obvious solution of an underpass bridge linking the alternative site with a site suitable for playing fields.

Counsel for the planning authority submitted that the view of the education authority that the site was the only suitable site, reached after an extensive process of consultation, was a material consideration in favour of the proposal.

The desire was to have playing fields next to the school buildings. There was an urgent and pressing need for a new school. Even if the court was against the respondent it did not follow that the court should grant the remedy of reduction.

Held (1) that there was merit in the criticism that the planning authority had been presented with, and had accepted, the education authority’s decision as determinative of the judgment which it had been required to make (para.39); and (2) that the planning authority had adopted an erroneous approach, similar in nature to that discussed in R (Langley Park School for Girls Governing Body) v Bromley LBC, and any councillor reading the report would have reasonably assumed that if there was to have been a new school, it would have had to have been at the site chosen and the planning authority had been diverted from the planning judgment which it had been required to have carried out if it were properly exercising its jurisdiction (para.42) and reclaiming motion allowed, the decision quashed as unlawful, and the whole matter remitted for consideration.

Observed that when a council was both applicant and planning authority, it would not always be easy for planning officers, councillors and others to separate and safeguard its planning jurisdiction from its interest in the proposed development. It was that danger which was addressed in Planning Advice Note 82. Amongst other things, it stressed (in para.19) that the authority’s corporate decision to support development had not to “take precedence over the need for a proper and fair assessment”; nor should the authority’s wish to have proceeded to a certain timetable. It was not suggested that any conscious decision had been taken to have given priority to the council’s decision as education authority to build at Pipeland; but the importance of constant vigilance against the obvious risks inherent in a council adjudicating upon its own application had to be emphasised (para.44).

Cases referred to:

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City of Edinburgh Council, The v Secretary of State for Scotland, (HL) 1997 S.C.L.R. 1112; 1998 S.C. (HL) 33; 1998 S.L.T. 120 R (on the application of Langley Park School for Girls Governing Body v Bromley London Borough Council [2009] EWCA Civ 734; [2010] P. & C.R. 10 Tesco Stores Ltd v Dundee City Council [2012] UKSC 13; 2012 S.C. (U.K.S.C.) 278; 2012 S.L.T. 739.

The whole circumstances of the case and the arguments of counsel are to be found in the following opinion of the court which was delivered by Lord Malcolm on 18 March 2016.

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2017 S.C.L.R. St Andrews Environmental Protection Association Ltd (IH) 37 LORD MALCOLM [1] On 16 May 2014 Fife Council, acting as planning authority, granted planning permission in principle for a new secondary school and associated facilities, including playing fields, (the proposed new Madras College) on land owned by Hermiston Securities Ltd to the north of Pipeland Farm, Largo Road, St Andrews. The applicant was the property services department of the council, acting on behalf of the council as education authority. The decision gave the go ahead for a major development in the green belt and on prime agricultural land, and thus was contrary to the terms of the development plan.

The proposal to build at Pipeland has proved controversial, and came after many years of local debate as to the best way forward in respect of the acknowledged need for new and better secondary school facilities in the area.

[2] The St Andrews Environmental Protection Association Ltd (the petitioner), with the benefit of a protective expenses order, has raised a petition seeking judicial review of the grant of planning permission. The objects of the petitioner include the advancement of the environmental protection of St Andrews. The petition notes that on 20 March 2014 the North East (Fife) planning committee recommended that the application be refused in the interests of, amongst other things, protecting the countryside, the green belt and prime agricultural land to the south of St Andrews. The committee considered that there was insufficient evidence that no other site was available for the new school; that the proposal was contrary to local plan policies; and that no material considerations justified setting them aside. In so acting the committee rejected the planning officer’s recommendation for conditional approval.

[3] The application then came before the full council, which, after considering the planning officer’s favourable report and the planning committee’s recommendation to refuse the application, granted planning permission in principle, subject to a number of conditions. The reasons given for making this decision noted that the new secondary school development was contrary to the development plan. Significant weight was placed on the need for the school and the “lack of a suitable, available, alternative site” within the environs of St Andrews; a phrase taken from advice set out in national planning policy regarding development in the green belt. The reasons continued: “There is overwhelming evidence set out over a significant period of time that the existing two secondary school buildings that make up Madras are not providing an appropriate environment for the delivery of the secondary education curriculum for St Andrews and the North East Fife settlements that make up the school catchment for Madras. The various documents and assessments submitted with the application along with the description of the school requirements set by the executive committee of Fife Council in December 2012 indicate that there are very few areas of land large enough within the vicinity of St Andrews that could deliver an appropriate replacement school. The school requirements (a single site facility) also rendered the option identified within the local plan (North Haugh) as unsuitable. Of those sites that are large enough only the Pipeland site is both suitable and available within a reasonable time scale that would ensure that progress on the replacement school commenced within the next 12 months. Ultimately, the determination has been made on the basis of whether an alternative site is suitable for the proposed development, not whether the proposed development can be altered or reduced so that it can be made to fit an alternative site. The weight attached to this matter is considered to be sufficient to set aside the terms of the development plan in this regard.”

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[4] There was no question as to the landscape impact of the development within the green belt. A large, high building, with associated car and bus parks, would have an unavoidable urban context that could not respond to the green belt landscape setting nor follow the height and form restrictions placed on the adjacent hospital building in 2004. Given the pupil numbers, the scale of the school building could not be reduced and the playing fields necessarily resulted in the creation of flat platforms. There would be major intrusion in respect of personal privacy and amenity. So far as other issues, such as traffic and transport, natural heritage and contaminated land were concerned, the view was taken that they could be adequately addressed by conditions imposed upon the planning permission. Following upon the decision the Scottish Ministers intimated that they did not intend to call in the planning application.

[5] The requirements for the new school identified by the executive committee as education authority in December 2012 included that the new school should, “where possible”, be able to deliver all aspects of the curriculum and the extended curriculum on a single site, and “if possible” be afforded the space to maximise flexibility as the demands and requirements of the curriculum develop and change. The committee also wanted to avoid a lengthy decant of pupils while the new school was being built, and agreed that the council should not settle for a school that would be second or third best in its pursuit of a replacement Madras College. The committee concluded that Pipeland is the only site, of several which had been considered, which meets the key criteria of availability, affordability, flexibility and deliverability. It would also avoid decant arrangements.

The submissions before the Lord Ordinary

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[6] Before the Lord Ordinary the petitioner contended that the planning officer’s report and the full council’s decision treated the education authority’s criteria as if they were overriding planning requirements. There was no balancing of educational and planning considerations in respect of Pipeland and the alternative sites. The decision to rule out the local plan site at North Haugh as too small ignored the possibility of combining it with the current playing fields at Station Park. The two sites are contiguous, although separated by a major road, namely the A91. Any concern as to a split site is easily addressed by, for example, the construction of an underpass.

[7] For the planning authority it was submitted that it was fully entitled to conclude that Pipeland was the only site which would meet the requirements for the proposed development. Reference was made to the report to the December 2012 executive committee, which, in respect of North Haugh, drew attention to the need for an underpass, and also for an access road, something which could be delayed given the time scale for a proposed distributor road.

The report also pointed to certain constraints which were said to render the North Haugh site “undevelopable for use as a secondary school”. It was noted that previous negotiations with the university (which owns the land) had proved unsuccessful.

The Lord Ordinary’s decision

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[8] The Lord Ordinary refused the application for judicial review. His reasons can be summarised as follows. The planning authority did not overlook the possibility of North Haugh being used in conjunction with the playing fields at Station Park. It was referred to as a split site. In the circumstances that was neither perverse nor erroneous, given the separation by a major A class road.

As to the complaint that the education authority’s requirements were treated

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2017 S.C.L.R. St Andrews Environmental Protection Association Ltd (IH) 39 as determinative of the no other suitable site issue, the Lord Ordinary considered it obvious that there are likely to be disadvantages if a school is made up of a number of campuses situated on sites remote from each other.

However, a careful reading of the planning officer’s report showed that the North Haugh site was not ruled out only on the basis that it is a split site. Nor could it be said that no consideration was given to the disadvantage of having the school buildings located at North Haugh, with the playing fields across the road at Station Park, or to any other factor (para.33). The Lord Ordinary quoted the planning officer at para.2.6.21 of the report: “The provision of sports pitches on the same site as the school building itself is a key outcome of the ‘single site’ expectation. Physical education is part of the curriculum and providing the facilities next to the building thus reducing pupil and staff travel time to the playing pitches is the main impact of this decision. The decision to discount any site not large enough to have the playing pitches on the single site rules out North Haugh. . . .”

[9] The Lord Ordinary accepted that the degree of disadvantage resulting from the split site would be less than where the sites were remote from each other. However, he observed that, “it does not follow that the disadvantage at North Haugh/Station Park would not be significant”. The councillors were better placed than the court to determine that matter. The split site was not the only factor. The planning officer’s report (para.2.6.22) stated that the North Haugh site did not have the space which might be necessary for a developing curriculum in the future.

[10] The view was taken that the council’s decision was made for the reasons set out in the planning officer’s report of 20 March 2014. These did not include any reference to issues concerning the availability or otherwise of the North Haugh site. The Lord Ordinary stressed that the court cannot enter into the planning merits of the matter. “If the North Haugh/Station Park was unsuitable then it mattered not a jot that development on it would be more consistent with the development plan than development at Pipeland”. The weight to be attached to the disadvantage of the site being split and too small for future development were for the judgment of the planning authority.

[11] The Lord Ordinary advised that, had he been persuaded that the decision was unlawful, he would have granted decree of reduction. He would not have accepted a submission that there was no real possibility of the council, if and when reconsidering the matter, coming to a different decision.

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[12] The Lord Ordinary’s decision is now the subject of this reclaiming motion (appeal). For the petitioner, Mr Findlay repeated the submission that the planning report and the planning authority erred in treating North Haugh/ Station Park as a split site, and in failing to carry out a proper planning balancing exercise before concluding that Pipeland is the only suitable site. Reference was made to s.25(1) of the Town and Country Planning (Scotland) Act 1997 and to various decided cases, including R (on the application of Langley Park School for Girls Governing Body) v Bromley London Borough Council, especially Sullivan LJ at paras 52–53. Mr Findlay stressed that the judicial review has to be carried out under reference to the reasons given by the planning authority, not those made on earlier occasions by the education authority when ruling in or ruling out the various possible locations considered for the new school. The reasons given by the planning authority were lifted straight from the conclusions in the planning officer’s report. Reference was made to the “requirements” for the

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new school, even though the education authority had expressed only preferences, for example, “where possible” to have a single site. They were treated as determinative, and thus there was no assessment of whether the planning disadvantages of the Pipeland site outweighed any educational advantages flowing from it; nor whether any disadvantages of another site outweighed the benefits which would flow from avoiding development in the green belt. The planning authority required to address these matters before it could conclude that development on the green belt was necessary and justified. The report foreclosed the planning assessment which the planning authority was required to carry out. It did this by, in effect, advising that the decisions taken by the education authority resolved the key planning issue, namely whether the need for a new school justified building on the green belt.

[13] The report diverted the authority from, amongst others, the site allocated as an option for a new school in the local plan, and steered the planning authority away from the obvious solution of an underpass or bridge linking North Haugh and Station Park. While similar criticisms could be made in respect of other sites, the failings on the part of the planning authority could be illustrated by the lack of any consideration as to whether the disadvantages of the North Haugh/Station Park site, whether viewed as a split site or not, were of such moment as to justify the serious harm flowing from development at Pipeland. It was not a matter of the planning authority having weighed up the relevant material considerations and come to a balanced decision in terms of s.25 of the Act. This exercise simply never took place.

[14] For the planning authority, under reference to Tesco Stores Ltd v Dundee City Council, Mr Armstrong QC submitted that the decision of the education authority that Pipeland is the only suitable site, reached after a long and extensive process of statutory consultation, was a material consideration in favour of the proposal. There was only one application before the council. It was not “a beauty contest”. The desire is to have the playing fields “next to” the school buildings. There is an urgent and pressing need for the school.

North Haugh consistently scored close to the bottom of the sites considered by the education authority. Based on the information in the environmental statement, the education authority is of the opinion that North Haugh is not developable as a secondary school. In any event, it is considered that it is not available in the short term. Counsel made extensive reference to the environmental statement and to documents relating to the education authority’s search for a new site. There would be no guarantee of success in respect of any exercise of compulsory purchase powers, should such be needed. At one time a site at Kilrymont had been promoted, but, as a split site, it did not attract the support of parents.

[15] Mr Armstrong submitted that the guidance in Tesco at paras 24 and 37–38 had been followed. The planning report did not rule out other sites. It and the planning authority simply gave the views of the education authority overriding weight, as they were entitled to do. Reference was made to Lord Clyde’s speech in City of Edinburgh Council v Secretary of State for Scotland at [p.1122;] pp.44–45.

[16] If it was a reasonable reading of the planning report that it was Pipeland or nothing, Mr Armstrong accepted that the report would be misleading. He also agreed that it is reasonable to conclude that, in rejecting North Haugh/ Station Park, the planning authority was of the view that it was a split site, not a single site. However, this would remain the position even if an underpass was constructed, because the playing fields would not be adjacent to and overlooked by the school buildings.

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2017 S.C.L.R. St Andrews Environmental Protection Association Ltd (IH) 41 [17] If the court was against him on the main issue, Mr Armstrong submitted that it did not follow that the court should grant the remedy of reduction. The case could be put out by order for discussion in light of the specific terms of the court’s decision.

[18] In reply, Mr Findlay drew attention to the terms of Planning Advice Note 82 which provides guidance in cases, such as the present, when the council has an interest in the proposed development. He referred to paras 28–29 of the Tesco decision. Even on [its] own terms, the education authority’s “requirements” were not absolute, but no flexibility had been demonstrated by the planning authority. No document discussed the underpass joint site possibility regarding North Haugh/Station Park. The view that the playing fields had to be beside the school buildings was proposed for the first time by Mr Armstrong in the course of the hearing. It was unlikely that the pitches at Pipeland would be “next to” the school buildings.

[19] With reference to the various reasons given in earlier documents for rejecting a particular site, the focus should be on the reasons adopted by the planning authority for its decision. They did not include any alleged problems concerning the “developability” of the North Haugh site. The environmental statement provided information to the planning authority for the purpose of assisting it in its own assessment, not as a substitute for such an assessment.

Much of Mr Armstrong’s submission proceeded upon the mistaken assumption that the environmental statement could be read as forming part of the reasons for the planning decision.

[20] As the affidavits before the court demonstrate, to suggest that the North Haugh site is not available is a hotly contested issue, but, as the Lord Ordinary correctly noted, this question did not feature in the reasons for the decision under challenge. The petitioner “concentrated its fire” on the planning report and the reasons given for the grant of planning permission. Some sites had been withdrawn from consideration as being unavailable, but the North Haugh/Station Park site was not amongst them.

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Case law

[21] The City of Edinburgh Council decision, so far as relevant, addressed the proper approach to the enhanced status of the development plan. This is now set out in s.25(1) of the 1997 Act, which provides that, where regard has to be made to the development plan, a planning determination shall be made in accordance with it, unless material considerations indicate otherwise. It was stressed that the planning decision remained one of judgment for the decisiontaker, whose assessment as to the weight to be given to the relevant material considerations would not be subject to review, unless it could be categorised as irrational or perverse. It was re-affirmed that matters of planning judgment are for the planning authority, not the court.

[22] Tesco Stores considered a question arising in the context of the sequential approach to site selection for new retail developments. The Dundee local plan provided that out-of-centre developments would be permitted only if no suitable site was available within, or failing that, on the edge of the city centre.

The planning authority gave permission to Asda for an out-of-centre superstore on the basis that it was justified by certain material considerations. Tesco argued that the authority had misinterpreted the policy by proceeding upon the basis that “suitable” meant “suitable for the development proposed by the applicant”. It should have been understood as covering sites “suitable for meeting identified retail deficiencies in retail provision in the area”. As a result the planning authority failed to appreciate the extent of the conflict between

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the proposal and the development plan. The authority treated the nature and scale of the proposed development as definitive when assessing whether another suitable site was available. A site was available in Lochee, but had been ruled out as being too small for Asda’s requirements. The Lochee site afforded 1.45 hectares. The application site extended to 6.68 hectares.

[23] The UK Supreme Court held that the planning authority had been correct to construe the policy as directing attention to a suitable alternative site “for the proposed development”. That was the ordinary meaning of the words used in the policy (Lord Reed at para.25). This was subject to the qualification that the sequential approach required “flexibility and realism from developers and retailers as well as planning authorities” (para.28). This resolved the concern that otherwise a developer could ride roughshod over the policy by ensuring that the proposal was of such a scale and nature as could not be accommodated in a city centre or edge of city centre location. Where appropriate a retailer should be prepared to adjust or subdivide its proposal so that it could fit within the centre, and also demonstrate that this had been fully addressed. It would be “an oversimplification to say that the characteristics of the proposed development . . . are necessarily definitive for the purpose of the sequential test” (para.29).

[24] Lord Reed was satisfied that a flexible approach had been adopted.

The Lochee site was far smaller than the applicants required. The car parking facilities were inadequate. “In accepting that assessment, the (planning authority) exercised their judgment as to how the policy should be applied to the facts; they did not proceed on an erroneous understanding of the policy” (para.30). In any event there was no prospect of any other development of the application site (the former NCR facility on the Kingsway), nor of any development elsewhere which could deliver equivalent planning and economic benefits. Any decision other than approval of the application was “implausible” (para.31).

[25] Mr Armstrong submitted that this decision provided strong support for the lawfulness of the grant of planning permission at Pipeland. Though relating to the sequential approach to the location of retail developments, not to development in the green belt, the case did concern a policy similar in its terms to that applied by the council. However we do not understand the decision in Tesco Stores as providing any confirmation of Mr Armstrong’s proposition that the council was entitled to give “overriding weight” to the applicant’s criteria for the new school. Lord Reed emphasised that the planning authority must be satisfied that a flexible approach has been demonstrated by the developer before proceeding with an out-of-centre site. The underlying rationale is that, when considering the sequential test, the retailer is expected to take on board the preference for a centre or edge-of-centre site, and do all that can reasonably be expected of it to comply with the planning objective of avoiding out-of-centre retail development. It is that objective which is to drive both retailers and planning authorities when assessing whether there is a suitable site which is consistent with local and national planning policy. This assessment cannot be sidestepped by the planning authority under reference to the applicant’s requirements (or preferences) for the attributes of the development site.

[26] While of course allowed to have regard to the information submitted along with the application, the planning authority must critically and thoughtfully ponder the whole matter for itself—not simply accept the assurances and previous decisions of the developer. It seems clear that the Lochee site was always a non-starter, thus Tesco’s attempt to thwart its rival’s

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2017 S.C.L.R. St Andrews Environmental Protection Association Ltd (IH) 43 proposal was always doomed to failure. However, if one thinks of a case where there are a number of alternative sites which are realistic possibilities, there is nothing in Lord Reed’s judgment to suggest that the planning authority can delegate the assessment to the developer, with it being given carte blanche as to the criteria to be applied. On the contrary, an exercise of planning judgement on the part of the planning authority concerning the application of the policy and the sequential test is required. Similar comments can be made in respect of a decision as to whether a development in the green belt is justified on the basis of the absence of an alternative urban location.

[27] In the Langley Park case, a girls’ school objected to proposals designed to provide new and better facilities for a boys’ school by relocating the buildings on the existing site. The problem was that the new buildings involved a substantial intrusion into Metropolitan Open Land (MOL), the London equivalent of green belt, and which is entitled to a similar level of protection.

Other less intrusive options for the siting of the new buildings had been considered by the applicant, but the development proposal was adopted largely because it minimised disruption to the school’s activities during the construction phase. It was preferred by the education authority as the optimum layout solution for the new school in “educational, operational, environmental and planning terms”.

[28] The planning report offered little or no assessment of the impact of the proposal on the openness and visual amenity of the MOL. The girls’ school had relied upon an option scheme whereby the MOL would not be affected.

However, in the report to committee, the advice was that, in effect, this scheme need not be considered. The proposal before the committee should be “considered on its merits”. Furthermore, given the educational need “on balance it may be considered acceptable”.

[29] In the reasons given for the grant of planning permission, the members noted the objection based on the less intrusive option for the new school, however “the application . . . did not contain that option”. Thus attention was focused only on the acceptability or otherwise of the proposal before the committee. No consideration was given to whether the damage to the MOL could be avoided by requiring the applicants and the education authority to work up proposals based upon the other scheme. The harm done to the MOL was judged to be overcome by the educational need for the new school.

[30] In a judicial review application brought by the objecting school, the process leading to approval was criticised as having failed to grapple with the central issue, namely whether the claimed educational benefits meant that the particular impact on openness was inevitable, or whether they could be achieved with less harm to the MOL. The court agreed that the decision was “seriously flawed” and quashed the permission. At paras 52–53 Sullivan LJ said: “The starting point must be the extent of the harm in planning terms (conflict with policy etc.) that would be caused by the application. If little or no harm would be caused by granting permission there would be no need to consider whether the harm (or the lack of it) might be avoided. The less the harm the more likely it would be (all other things being equal) that the local planning authority would need to be thoroughly persuaded of the merits of avoiding or reducing it by adopting an alternative scheme. At the other end of the spectrum, if a local planning authority considered that a proposed development would do really serious harm it would be entitled to refuse planning permission if it had not been persuaded by the applicant that there was no possibility, whether by adopting an alternative scheme, or otherwise, of avoiding or reducing that harm.

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St Andrews Environmental Protection Association Ltd (IH) 2017 S.C.L.R. 53. Where any particular application falls within this spectrum; whether there is a need to consider the possibility of avoiding or reducing the planning harm that would be caused by a particular proposal; and if so, how far evidence in support of that possibility, or the lack of it, should have been worked up in detail by the objectors or the applicant for permission; are all matters of planning judgment for the local planning authority. In the present case the members were not asked to make that judgment. They were effectively told at the onset that they could ignore (whether the injury could be avoided or reduced by alternative siting within the application site), and did so simply because the application for planning permission did not include the alternative siting for which the objectors were contending, and the members were considering the merits of that application.”

[31] There are obvious parallels between the Langley Park case and the present.

Sullivan LJ stated that the members should have assessed the nature and degree of harm arising from the proposal; the nature and urgency of the need; the scope for alternatives which “could sensibly satisfy the need”; and “the extent to which the feasibility of such alternatives had been demonstrated (i.e. the weight which could be afforded to them)”. This did not happen because other options had been “ruled out” as not part of the planning application (para.55).

Having diverted the committee from considering whether the planning harm could be avoided or reduced by alternative siting of the buildings, the report was “misleading”.

[32] It was contended that any failures should not cause the court to quash the decision since the other option was impracticable, and this on the basis that the pupils and staff would have nowhere to go while the new school was being built. Sullivan LJ noted that the reasons given for the planning decision did not endorse that point of view. “Primary importance” had been given by the applicants to minimising disruption to the school during the redevelopment process, something which pointed to locating the new buildings away from the existing school. At paras 60–61 his Lordship said: “It is readily understandable that the (applicant), and perhaps the respondent in its capacity as local education authority, would accord overriding importance to this factor. The respondent was not, however, considering this application for planning permission in its capacity as the local education authority. It was considering the application as the local planning authority, and was under a statutory duty to determine the application in accordance with the development plan . . . unless material considerations indicated otherwise . . . As the local planning authority, the respondent’s priority in accordance with policy G2 was to ensure that any injury to the openness and visual amenity of the MOL was, if not avoided, then at least minimised as far as possible.

61. The ‘impracticability’ submission is premised on the priority accorded by the (applicants) to the objective of minimising disruption to the existing school. Siting the new buildings on the open part of the site would obviously meet this objective. The objectors were contending that siting the new buildings on the built up part of the site would better meet the policy imperative of not injuring the openness of the MOL. Whether there was a tension between the (applicants’) objective and the policy imperative, and if so how it should be resolved, eg by requiring the boys school to accept more than ‘minimum disruption’ and/or the use of more than the ‘absolute minimum’ of temporary teaching accommodation during the construction process, are matters for the respondent to determine as local planning authority. Since the report had not begun to engage with these issues, it is understandable that the members did not regard them as any part of the

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2017 S.C.L.R. St Andrews Environmental Protection Association Ltd (IH) 45 ‘merits’ of the application which they had to determine. For these reasons I am not persuaded that relief should be refused on the ground of ‘impracticability’ ”.

A

Discussion and decision

[33] There is, and has been for some time, a clear need for a new location for Madras College, ideally on a site not only big enough to encompass all the buildings and associated facilities, including playing fields, but also with room for possible expansion in the future. Over many years various possible locations have been studied, consulted upon, and assessed. In choosing its preferred site, the education authority applied its key criteria, which, understandably, focused on educational priorities, not planning considerations. In due course it applied to the planning authority for permission to erect the new school on a site which is in the green belt and on prime agricultural land. The proposal is contrary to the development plan, and thus, in terms of s.25 of the Act, can be approved only if justified by sufficiently weighty material considerations. In this regard, national planning policy advises that such a development might be approved on the basis of proven need and the absence of a suitable and available alternative site.

[34] The planning authority was satisfied that appropriate conditions could regulate many important environmental and other impacts at Pipeland, for example regarding traffic and residential amenity. None the less, the fact of development in the green belt could not be avoided or mitigated. Given the admitted need, the key issue, which has proved to be very controversial, was whether the school had to be located at Pipeland, or whether it could and should be directed elsewhere with lesser or no adverse environmental consequences.

The focus of much of the objections rested on the site identified in the local plan for a new school campus, namely North Haugh. None the less, before the planning authority a number of others sites remained “in the running” as potentially suitable locations.

[35] In these circumstances, the task for the planning authority was a relatively complex one. Assuming that it was satisfied as to educational need, and that non-green belt impacts at Pipeland could be addressed by appropriate conditions, it then had to assess the respective merits and demerits of the other sites as compared with the merits and demerits of Pipeland. The preferences and requirements of the applicant were relevant factors, but by no means decisive. Any applicant developer, whether for retail, housing, or an educational development, will be influenced, perhaps primarily influenced, by its own interests. The role of the planning authority is to reflect and safeguard the wider public interest in the proper planning of development in the area, including appropriate protection and conservation of the environment. This is where the question of the suitability of alternative sites comes into the picture. Given the acknowledged significant harm caused by development at Pipeland, if, in the opinion of the planning authority, a satisfactory alternative could be found which is consistent with the development plan and causes significantly less environmental harm, that would be a clear reason for refusal of the current application. There would be no material consideration of sufficient weight to overcome the inconsistency with the development plan. A judgment has to be made by the planning authority—it cannot be delegated to the applicant, even where the applicant is the council itself as education authority. It is for the planning authority to determine, on the basis of all the relevant information before it, whether there is a suitable and available alternative location for the new school, and in particular one which should be pursued with a view to

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avoiding the inconsistency with the development plan and the resultant environmental damage.The developer may offer its own views, and the planning officer tender advice and recommendations, but the planning authority must address and apply its mind to the issue.

[36] As the Lord Ordinary observed, the planning authority did not reject the North Haugh/Station Park site on the basis that it was not available. This particular issue has generated heat in the press and elsewhere, with the university being very keen to correct any impression that it is not prepared to negotiate regarding the sale and purchase of this site. In the circumstances we do not require to express a concluded view on this question, but on the face of it, it seems difficult to rule out the North Haugh/Station Park site on the grounds of non-availability—not least given the fall back of compulsory purchase powers in respect of the site identified in the local plan.

[37] It would appear that the factor which weighed with the planning officer and the planning authority was the separation of the North Haugh/Station Park site by the A91, and thus the apparent conflict with the education authority’s desire to locate all the facilities on a single site. The reference is “would appear” because nowhere is there a specific reference to North Haugh/ Station Park as a split site. None the less, during the hearing it was accepted that when, for example, mention is made of the North Haugh site in para.2.6.21 of the report, this comprises a development straddling both the North Haugh and Station Park locations. Were it otherwise, one would have to conclude, contrary to the view of the Lord Ordinary, that this possibility had been overlooked—something which seems inherently unlikely—and would, in itself, amount to a failure to have regard to a relevant factor.

[38] In the course of discussion, counsel for the planning authority drew attention to other factors which, from time to time, had been taken into account when assessing North Haugh. However, we agree with Mr Findlay that attention should be concentrated on the reasons given by the planning authority for its decision. In any event, for present purposes, it is sufficient to note that at para.2.6.21 the planning report states that the inability to have the playing fields on a single site “rules out” North Haugh, Strathtyrum, Langlands, University Playing Fields and Petherum Bridge.

“The primary impact of this decision is the immediate removal of the North Haugh from the list of suitable alternatives. Regardless of the detailed case expounded by objectors it is primarily this fact that precludes the North Haugh from being an acceptable site.”

This was part of the reasoning which led to the instruction at para.2.6.33 that the Pipeland site “must be considered the only available and suitable site”.

The author added that “significant weight” was being attached to “this fact” in the determination of the application and the assessment of the development against all the policies of the development plan. This thinking was carried through into the reasons issued with the decision notice: “School requirements (a single facility) also rendered the option identified within the local plan (North Haugh) as unsuitable.”

[39] The criticism was that the planning authority was presented with, and accepted the education authority’s decision as determinative of the judgment which it was required to make. (Though much of the discussion at the hearing focused on the North Haugh site, similar comments could be made in respect of other sites, all of which were “ruled out” for reasons of non-conformity with the education authority’s criteria.) We consider that there is merit in this criticism. Not only must the planning authority apply its own mind to the

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2017 S.C.L.R. St Andrews Environmental Protection Association Ltd (IH) 47 question of alternative suitable sites, it must do so having regard to planning considerations. Thus, for example, as to North Haugh/Station Park, the question is not—does it meet the education authority’s requirements? The question is—does its existence mean that a proposal in the green belt and contrary to the development plan ought to be refused? This involves a consideration of factors such as—how significant are the concerns being expressed about the North Haugh/Station Park site? Are they sufficient for its rejection as an alternative site? Are they of such weight and importance as to justify the harmful consequences of development at Pipeland? Put in this way, if, as is accepted, the A91 issue can be addressed by a bridge or underpass, the planning authority must assess whether it is proper to “rule out” North Haugh/ Station Park on the grounds that, at present, it is not a single site. Accepting that, even with an underpass or bridge, there will be a degree of separation of the school buildings and the playing fields, does this render it “unsuitable” in the sense intended by national planning policy? In the context, “unsuitable” is to be construed as a site which cannot reasonably be expected to be developed for the new school. It does not mean inconsistent with the applicant’s wishes.

Were it otherwise, any developer could set out the parameters for the planning authority’s consideration and thereby exclude alternative locations which, in the balancing exercise required of the planning authority, should be brought into the overall picture. None of this is to say that the developer’s criteria are to be ignored, but, when judging whether other possible locations should result in refusal of a proposal contrary to the development plan, they cannot be given the decisive weight plainly afforded to them in the planning report and by the planning authority.

[40] We accept the submission that the planning authority has been led into this error by the terms of the planning report. For example, at para.2.6.9 reference is made to Pipeland having been identified as: “The only suitable site which meets the established criteria identified for Madras College (i.e. to deliver all aspects of the curriculum and the extended curriculum on a single site and is the only site available which also avoids the necessity of a decant arrangement).”

Incidentally it is clear that this last point is factually incorrect—see para.2.6.20.

However, even if it was accurate, again the question would arise as to whether a decant was a price worth paying to avoid development in the green belt.

[41] It is hard to avoid the impression that the full council was being instructed that, given all the work done by the education authority over many years, the important decisions had already been taken, and that it was Pipeland or nothing—see, for example, the discussion under the heading “Is the choice of site clear?” at para.2.6.9. At para.2.6.12 it was observed that the objections were “essentially seeking to question the decision-making process that culminated in the executive committee decision of December 2012”. The full council was told that it had no power to overturn that decision, the “necessary scrutiny” having taken place at the scrutiny committee on 8 January 2013.

That was a “documented and limited decision and directly relates to the council’s role as the applicant in this case”. It was stated that any challenge to the executive committee must follow a different route.

“In any planning application assessment the planning authority would not have the locus to question the decisions of the applicant and expect their assessment to result in the applicant choosing a different site. The planning authority has the task of deciding if the proposed development is acceptable at the site chosen.”

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[42] In our opinion the planning authority has adopted an erroneous approach similar in nature to that discussed in Langley Park at paras 52–53.

Any councillor reading the report would reasonably assume that if there was to be a new school, it had to be at Pipeland. paras 2.614–2.633, would be read as no more than an explanation for the advice that only Pipeland is a suitable site and the only one “worthy of consideration against the restrictive policies of the development plan”. The planning authority was diverted from the planning judgment which it required to carry out if properly exercising its jurisdiction. The full council was effectively told that it should ignore the issue as to whether the green belt could be protected by using an urban site, because the applicant had already considered the matter and its decision was determinative. Thus the councillors were put in the position that if they wanted a new Madras College, and that had been a pressing need for many years, they would have to sanction development at Pipeland.

[43] The heavy reliance on the Tesco Stores decision is misconceived. It confirmed that the balancing exercise inherent in the decision the planning authority had to carry out in weighing alternative sites could not be delegated to the developer. It is of course legitimate for a planning officer in a planning report to present a recommendation to a planning authority. That happens on a daily basis. Here the report goes into quite different territory, and has led the authority into a failure to discharge its duty. It follows that the reclaiming motion will be allowed, the decision quashed as unlawful, and the whole matter remitted for reconsideration.

Postscript

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[44] When a council is both applicant and planning authority, it will not always be easy for planning officers, councillors and others to separate and safeguard its planning jurisdiction from its interest in the proposed development. It is this danger which is addressed in Planning Advice Note 82. Amongst other things it stresses (para.19) that the authority’s corporate decision to support development “must not take precedence over the need for a proper and fair planning assessment; nor should the authority’s wish to proceed to a certain timetable”. We are not suggesting that any conscious decision was taken to give priority to the council’s decision as education authority to build at Pipeland; we merely wish to emphasise the importance of constant vigilance against the obvious risks inherent in a council adjudicating upon its own application.

For the petition and reclaimer: Findlay, instructed by Gillespie McAndrew LLP, Solicitors, Edinburgh For the respondents: Armstrong QC, instructed by Balfour + Manson LLP, Solicitors, Edinburgh.

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A COURT OF SESSION Outer House

22 March 2016

Lady Wolffe SIMON ANTHONY CHISWELL

Pursuer

B

against ANN MARIE CHISWELL NRAN (NORTHERN ROCK ASSET MANAGEMENT) KEEPER OF THE REGISTERS OF SCOTLAND

Defenders

Process—Title to sue—Discharged bankrupt—Reduction of standard security—Alleged forged standard security—Whether pursuer competing with creditors—Whether action “personal” to pursuer The pursuer raised an action seeking reduction of a standard security and an order ordaining the Keeper of the Registers to rectify the Land Registry deleting the grant of a standard security and for reduction of a sheriff court decree against the pursuer and the first defender at the instance of the second defenders granting warrant to the second defenders to take possession of and sell the subjects. He also sought reduction of a charge for removing from the subjects. The pursuer contended that his signature on the standard security was forged. He averred that he had left his financial affairs to his wife, and that a number of her business ventures had been loss making. He averred that he had not been aware of any standard security over the subjects in favour of the second defenders and was unaware of any sheriff court decree. The pursuer was a discharged bankrupt but his sequestration was still going on.

The defender argued that the pursuer had no title to sue because of the sequestration. His interest in the subjects had passed to the trustee in sequestration at the date of the sequestration. Generally a sequestrated person had no title to pursue a claim unless his trustee abandoned the right to do so, as was set out in the case of Dickson v United Dominions Trust Ltd. This was not the exceptional case where the pursuer was seeking to reduce the very decree that set in train the sequence of events which had led to his sequestration and the pursuer would have title to sue only if the trustee had abandoned the right to do so before the action was raised. The action should be dismissed.

Counsel for the pursuer argued that proof before answer should be allowed.

It was not accepted that the sequestration precluded him from challenging a standard security which was fraudulently obtained. He currently occupied the subjects with his children and the trustee had taken no steps to remove him from the property which was a family home. The standard security survived sequestration and was unaffected by the pursuer’s sequestration. The second defenders, as secured creditors, could prevent the trustee dealing with property unless the trustee discharged the standard security. The action was an action of reduction, which was equivalent to an action of declarator. In any event, a person who was in possession of property had a right to challenge the right of the person who sought to eject him. The present action did not involve a competition with the creditors and the pursuer had title to sue.

Held that the action of the pursuer did not involve an impermissible competition with his trustees or creditors in the sense explained by Lord McCluskey in Dickson (para.52); and plea of no title to sue repelled.

Thomson v Yorkshire Building Society, 1994 S.C.L.R. 1014 distinguished.

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Chiswell v Chiswell (OH)

2017 S.C.L.R.

Cases referred to: Agnew v Laughlan, 1948 S.C. 656; 1948 S.L.T. 512 Bain, Robert v Andrew Robert Bain [2006] CSOH 198 Bentley v Macfarlane, 1964 S.C. 76; 1964 S.L.T. 58 Chalmers v Chalmers [2015] CSIH 75; 2016 S.C. 158; 2015 S.L.T. 793 D and J Nicol v Dundee Harbour Trustees, 1915 S.C. (H.L.) 7; 1914 2 S.L.T. 418 Dickson v United Dominions Trust Ltd, 1988 S.L.T. 19 Fleming v Walker’s Trustees (1876) 4R. 112 Fleming v McLagan (1879) 6R. 588 Galbraith v Whitehead (1863) 1M. 644 Graham v Mackenzie (1871) 9M. 798 Grindall v John Mitchell (Grangemouth) Ltd, 1984 S.L.T. 335 Hill of Rubislaw (Q Seven) Ltd v Rubislaw Quarry Aberdeen Ltd [2013] CSOH 131 McLeod v Cedar Holdings Ltd, 1989 S.L.T. 620 Muir’s Trustees v Braidwood, 1958 S.C. 169; 1958 S.L.T. 149 Nicol v Nine Regions Ltd t/a Log Book Loans, 2008 S.L.T. (Sh Ct) 123 North British Railway Company v Birrells Trustees, 1918 S.C. (H.L.) 33; 1917 2 S.L.T. 271 Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 A.C. 438 Thomson v Yorkshire Building Society, (Sh. Ct.) 1994 S.C.L.R. 1014 Whyte v Forbes (1890) 17 R. 895.

The full circumstances of the case and the arguments of counsel are to be found in the following opinion of the Lord Ordinary which was delivered on 22 March 2016.

LADY WOLFFE Second defenders’ motion for dismissal on basis of no title to sue

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[1] This matter called before me for a procedure roll discussion of the second defenders’ 11th plea-in-law, seeking dismissal of the pursuer’s action on the basis that he has no title to sue. The second defenders moved for dismissal of the action on the basis that, while the pursuer is now a discharged bankrupt, his sequestration is ongoing and he has not secured the consent of his trustee in sequestration (the trustee or the pursuer’s trustee, as the context requires).

[2] The second defenders did not advance any arguments in support of their plea to the relevancy. If the second defenders’ 11th plea is not upheld dismissing the action, they seek a proof before answer on all other pleas (reserving other arguments as to the relevancy of the pursuer’s averments) for this action.

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[3] The second defenders are the heritable creditors by virtue of a standard security (the standard security) in their favour over certain subjects in Lanarkshire (the subjects) granted by the first defender, Ann Marie Chiswell, the wife of the pursuer and purportedly granted by the pursuer. The pursuer and the first defender were common owners of the subjects. They separated in late 2011, when the first defender moved out of the subjects. The pursuer continues to reside there with his children. The third defender is the Keeper of

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the Registers of Scotland. Neither the first defender nor the third defender has entered the process.

[4] The pursuer has raised the present action seeking: (1) reduction of the standard security; (2) an order ordaining the third defender to rectify the Land Register by deleting the grant of the standard security from the title to the subjects; (3) for reduction of a sheriff court decree (the decree) against the pursuer and the first defender at the instance of the second defenders granting warrant to the second defenders to take possession of, and sell, the subjects; and (4) for reduction of a charge for removing from the subjects.

Certain interim orders are also sought.

[5] In the submissions before me, compearing parties focused on the pursuer’s challenge to the standard security. But for that security, it was argued, the second defenders would not have been able to obtain the sheriff court decree for possession and sale of the subjects qua secured heritable creditors. The decree (and the other matters) were, it was said, ancillary to the pursuer’s challenge to the standard security. For that reason, parties confined their arguments to the question of title to sue as it bore upon the security. No argument about title to sue was addressed to me in respect of any of the other remedies sought by the pursuer.

[6] In essence, the ground for the reduction of the standard security is that the pursuer contends (at p.19C–D of the closed record) that his signature on the standard security was forged. (This averment is less equivocal than an earlier averment that the findings of a forensic document examiner of the pursuer’s signature appended to the standard security were that “there is a possibility it (i.e. the pursuer’s signature) is not genuine”: see closed record at p.18D.) The background is that the pursuer left the arrangements of the couple’s financial affairs to his wife and that a number of her business ventures had been loss making. He avers that he was not aware of the grant of any standard security over the subjects in favour of the second defenders at the time of its (in relation to him) purported grant.

[7] In relation to the sheriff court decree, which is a decree in foro, the pursuer’s position is that he was unaware of the standard security, or of the nature of the action and decree against him, until sheriff officers attended at the subjects to serve a charge for removing the pursuer and his three children from the subjects.

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Second defenders’ submissions on the pursuer’s want of title to sue

[8] The pursuer admits that he was sequestrated on 18 June 2010, on which date Kenneth Patullo was appointed as his trustee in sequestration. He raised this action in early 2013. All of the orders that the pursuer seeks in this action relate to his purported interest in the subjects. While he is now a discharged bankrupt, his sequestration is ongoing. He does not aver that he has raised this action with the consent of his trustee in sequestration.

[9] As a consequence of his sequestration, the pursuer’s interest in the subjects passed to the trustee in sequestration on the date of sequestration.

This was as a consequence of the vesting of his estate in his trustee by virtue of s.33 of the Bankruptcy (Scotland) Act 1985 (as amended) (the Act). Since the date of his sequestration (including when the action was raised), therefore, the pursuer has had no title to the subjects and no title to pursue this action

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seeking orders in relation to those subjects. (The second defenders took a subsidiary point, to the effect that even if the pursuer could cure any want of title to sue by obtaining the consent of his trustee, that could not operate retrospectively to cure the deficiency in the present action.)

[10] In relation to a general submission on title to sue, the second defenders developed this as follows. The requirements of title and interest to sue are distinct and independent requirements to be treated separately: Maxwell, The Practice of the Court of Session, p.147. To have title to sue requires a “formal legal right”: p.147. It entails “some legal relation which gives (the pursuer) some right which the person against whom he raises the action either infringes or denies”: D and J Nicol v Dundee Harbour Trustees, p12. To have interest to sue requires “some benefit from asserting the right or preventing its infringement”: Maxwell, p.150. It requires that the action has “some intelligible purpose to serve”: Agnew v Laughlan, p.659.

[11] The second defenders’ principal submission was in respect of the absence of title to sue of a bankrupt during the currency of his sequestration.

A sequestrated person has no title to pursue a claim unless his trustee abandons the right to do so. The general principle and its rationale were, it was argued, set out by Lord McCluksey in Dickson v United Dominions Trust Ltd, p.22F: “[T]he bankrupt cannot be allowed to litigate in such a way that he competes with the creditors, or the trustee as representing them, for any part of the assets sequestrated; and accordingly where such a competition exists or may exist the bankrupt will have no title to sue.”

[12] The second defenders stressed that their principal submissions in support of their plea of no title to sue were essentially predicated upon this dictum of Lord McCluskey in Dickson. Reference was also made to the three cases there referred to, of Grindall v John Mitchell (Grangemouth) Ltd; Fleming v Walker’s Trustees; and Whyte v Forbes, but the basis of the second defenders’ challenge was the dictum quoted above. In Grindall, the pursuer was an undischarged bankrupt who raised an action for patrimonial loss arising out of a road traffic accident. Lord Cowie held that the pursuer’s claim in that case was irrelevant in the absence of averments that the pursuer-bankrupt’s trustee and creditors had abandoned that claim. Fleming also concerned an action by a bankrupt in respect of certain property. The defenders in that case also tabled a plea of no title to sue. However, in that case, the trustee had called a meeting of the creditors and a resolution had been passed abandoning their claim to that property. I was referred to the observation of Lord President Inglis in that case (at p.113) to the effect that “[t]he sole question is, whether there is sufficient evidence that this claim has been abandoned”. In the light of the evidence (which was considered to instruct abandonment by the trustee and the creditors), the defenders’ plea was repelled. The facts of Whyte were a little more involved. The pursuer-bankrupt (Whyte) had been sequestrated. He was subsequently discharged, as, eventually, was his trustee. Whyte then raised an action with view to challenging articles of roup and a disposition under which part of his heritable estate had been sold by his trustee some years before.

Whyte’s sequestration was revived and his trustee re-appointed. The defenders’ plea of no title to sue was upheld, a view Lord Shand reached “without difficulty”. In reaching that view, Lord Shand also stated (at p.901) that: “It was plain that this action is not pursued in favour of the creditors. It is . . . hostile to creditors. The right is to be taken up as having been abandoned by creditors . . . I shall deal with it as one raised on the bankrupt’s own interest, claiming an abandoned subject. . . . I am . . . clearly of the

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opinion that the pursuer has neither title nor interest to sue this action. Of course the basis of the action, as I am now considering it, is that the trustees and creditors have abandoned their right. I am at a loss to see how they can be said to have abandoned anything. They turned the estate into money and divided the proceeds. They realised it, conveyed it to the purchasers and distributed the price. It is an utter confusion to say that the pursuer is taking up an abandoned right. On the contrary, he is seeking to cut down a great deal that the trustee and creditors have done with the estate which they acquired. I do not see how it is possible for Mr Whyte to interfere with what has been done. The property became his creditors’ property, and he was divested of all right to it.”

[13] In Dickson, Lord McCluskey was disinclined to adopt the conclusion of Lord Cowie in Grindall, or to hold that the ratio in Fleming was to the effect that the bankrupt had to demonstrate that the trustee had abandoned his claim. Rather, the second defenders in the case before me were anxious to point out Lord McCluskey’s view, that “no such rule is established” in Fleming.

Lord McCluskey stated: “Indeed, the bankrupt was held to be entitled to sue so the case is, in my opinion, authority for the obverse rule, namely that, if the trustee for the creditor abandons any right to pursue the claim, the bankrupt is entitled to pursue it”.

After reviewing the facts in Whyte (albeit the reference there to the sequestration having been “rescinded” must be a misprint for it having been “revived”), Lord McCluskey concluded that that case was authority for the proposition that “the bankrupt cannot pursue a claim which the trustee has obviously not abandoned”: p.22. It is after his review of these cases that Lord McCluksey identifies the “principle” lying behind these cases and which does not permit a bankrupt “to litigate in such a way that he competes with the creditors, or the trustees as representing them, for any part of the assets sequestrated. . . .”

[14] Furthermore, it was argued that the present case is not the exceptional case (as in Dickson) where the pursuer is seeking “to reduce the very decree that set in train the sequence of events which led to (his) sequestration”: Dickson at p.22H. In raising this action, it was submitted that it was clear that the pursuer is competing with the creditors and the trustee for the subjects.

Reference was made to Thomson v Yorkshire Building Society, as an illustration of just such a competition. In any event, the pursuer himself avers that if this action is successful he intends to negotiate to purchase any interest that the trustee has in the subjects. It was argued that that averment makes clear that a competition, or potential competition, by the pursuer with his creditors does exist, as contemplated in Dickson.

[15] The pursuer would have title to sue if the trustee had abandoned the right to do so: Dickson at p.22D–F. However, any such abandonment would, it was argued, have had to have taken place before the action was raised. It could not operate retrospectively. Reliance was placed on Bentley v Macfarlane, although I was not referred to any particular passage in that case. The pursuer makes no averment that the trustee consented to his raising the action before it was raised. In the absence of such an averment, it was argued, he cannot establish that he has title to sue.

[16] The cases of Thomson v Yorkshire Building Society and Nicol v Nine Regions Ltd t/a Log Book Loans were said to illustrate that the case of Dickson had been subsequently followed, or to provide a case which was said on its facts to be similar to those in the instant case (e.g. Thomson).

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[17] The second defenders then turned to consider the pursuer’s pleadings.

The pursuer’s recent minute of amendment inserted a series of averments of what are said to be a “number of reasons” why the pursuer has title to sue: • the fact that the pursuer is a party to the standard security obtained by fraud without his consent; • the fact that the pursuer was a named defender in the sheriff court decree and is said to have had title to defend the sheriff court proceedings; • the fact that he occupies the subjects with his children as their family home and could not be removed by the trustee without a court decree; and • the fact that he intends to negotiate to purchase the trustee’s interest in the subjects.

[18] It was argued that none of these facts establish a legal relation between the pursuer and the subjects such as is required by D and J Nicol. They do not address the second defenders’ point that the pursuer’s title to the subjects passed to his trustee when he was sequestrated.

[19] The facts averred by the pursuer may be relevant to interest to sue. While it was not conceded in the second defenders’ note of argument, in the debate before me the second defenders accepted that the pursuer had averred sufficient to establish an “interest” to sue. The pursuer’s averments may show that the pursuer has some benefit to obtain from the action—that there is an “intelligible purpose” to it. But even if they do, it was argued that that is a distinct question from the question of his title to sue. He has not averred sufficient to demonstrate any title. The second defender’s 11th plea-in-law therefore fell to be sustained and this action dismissed.

The pursuer’s reply

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[20] The pursuer submits that the second defenders’ 11th plea-in-law should be repelled, and a proof before answer allowed on all other matters.

[21] The pursuer contends that he has title to sue in respect of all of the matters for which he has conclusions (as set out in para.4, above.) The pursuer accepted that he was sequestrated. He accepted that this can affect his title to sue in respect of certain matters. He also accepted that his proprietary title in the subjects has vested in his trustee. However, he does not accept that his sequestration precludes him challenging a standard security which was fraudulently obtained.

[22] The pursuer began by referring to the following facts. The pursuer is purportedly a party to the standard security. The standard security was obtained, he asserts, by fraudulent means and without his knowledge. The second defenders raised sheriff court proceedings qua standard security holder against the pursuer for ejection from the subjects. The pursuer was unaware of these proceedings until after the decree passed against him. The pursuer is a named defender in the sheriff court decree. The pursuer currently occupies the subjects with his three children. But for the standard security and the decree, there could be no removal of the pursuer except by the trustee.

The trustee in sequestration has taken no steps to remove the pursuer or his children from the family home. It is a family home for the purposes of s.40 of the 1985 Act. An action on behalf of the trustee in sequestration and a court decree would be required in order to remove the pursuer and his family from the subjects. In the event that the orders sought by the pursuer were not

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granted, the pursuer and his family would be removed from their family home as a result of a forged standard security about which they had no knowledge until November 2011. In any event, removal from their family home is not otherwise guaranteed. In the event that the pursuer succeeds in this action, he intends to negotiate the purchase of any interest that the trustee has in the subjects. The sheriff court decree and standard security are preventing him from doing so.

[23] Furthermore, it was argued that the standard security survives sequestration. In accordance with ss.33 and 55(3) of the Act, the standard security is unaffected by the pursuer’s sequestration. The second defenders, as secured creditors, can prevent the trustee dealing with the property unless the trustee discharges the standard security in its entirety. If both the pursuer and the trustee are discharged, the second defenders’ standard security remains and they can seek possession.

[24] The pursuer outlined his legal submission as follows: (1) the pursuer’s action is an action of reduction. It is equivalent to an action of declarator. If that is correct, the proper approach to title to sue in respect of such a remedy requires consideration of whether the questions raised are real and not theoretical; whether the pursuer has a genuine interest to obtain the answer; and whether the pursuer has secured the proper contradictors, namely, with a true interest to oppose the declarator or reduction sought; (2) in any event, a person who is in possession of property has a right to challenge the right of the person who seeks to eject him; and (3) even if the second defenders’ approach to title to sue is correct, that principle is based on a competition between the sequestrated person and his creditors. The pursuer’s present action did not involve a competition with his creditors. Accordingly, the pursuer has title to sue.

[25] In considering title to sue it was argued that: (i) a bankrupt retains the right to sue in relation to matters which are personal to him (e.g. such as a claim for solatium: Muir’s Trustees v Braidwood, pp.174, 175); and (ii) the nature of the remedy sought can impact upon the proper approach to title to sue. The pursuer developed these points.

[26] In relation to (i), the pursuer is a purported party to the standard security. The standard security sits independently from and survives sequestration. It remains enforceable against the pursuer as an individual. As such, it is “personal” to the pursuer. In the circumstances, the pursuer retains title to sue.

[27] Separately, in relation to (ii), the principal order that the pursuer seeks is reduction of the standard security. The remaining orders flow from this. In particular, the second defender would not have been entitled to the decree in the absence of a valid standard security. The basis for seeking reduction is that the standard security is invalid due to forgery. The argument was further developed as follows: reduction can be viewed as a negative declarator: see Walker, Civil Remedies (1974), pp.138, 145. For the purposes of considering title to sue, the remedy of reduction can and should be treated as comparable to an action of declarator. In this action, the pursuer could have sought a declarator that the standard security was invalid. If granted, such a declarator would entitle the pursuer to reduction. The actions of declarator and reduction (particularly based on invalidity) are so closely connected, so the argument went, that the test for title to sue is and should be the same.

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[28] In actions of declarator, title and interest to sue should be treated with a degree of elasticity: per Lord Dunedin in North British Railway Company v Birrells Trustees, p.47. Reference was also made to further observations by Lord Dunedin a few years later, in the case of Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd, p.448 when he said: “Your Lordships are aware that the action of declarator has existed for hundreds of years in Scotland. It was praised, with envy, by Lord Broughan in your Lordships’ House, in the case of Earl of Mansfield v Stewart. Long before the genesis of Order xxv.1.5 the rules that have been elucidated by a long course of decision in the Scottish Courts may be summarised thus: the question must be a real and not theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, someone present existing who has—true interest—to oppose the delcarators sought.”

On the basis of this passage it was argued that sufficient interest may be established for a declarator in circumstances where the questions raised are real, not theoretical; where the pursuer has a genuine interest to obtain answers; and where he has secured proper contradictors, namely those with a true interest to oppose the declarations sought, then the pursuer has title and interest to sue. In addition to the dicta of Lord Dunedin in these two cases, reference was also made to Hill of Rubislaw (Q Seven) Ltd v Rubislaw Quarry Aberdeen Ltd, para.28.

[29] These circumstances were, it was argued, all present in the current action. The pursuer’s action raises questions that are separate from the sequestration, namely the validity of the purported security in favour of the second defenders. The pursuer has a genuine interest in obtaining an answer to this question because: (i) it impacts on the ability of both the pursuer and his children to possess the subjects; (ii) the existence of the purported standard security removes the statutory protections otherwise available to the pursuer and his family under s.40 of the Act 1985; and (iii) it impacts upon the pursuer’s ability to negotiate with the trustee in sequestration. The second defenders are the proper contradictors, being the party claiming to hold a valid standard security from which the decree and charge for removing stem.

The pursuer has a legitimate and manifest interest in obtaining the orders sought. In those circumstances he has title to sue: Fleming v McLagan; Hill of Rubislaw. Extensive reference was made, in particular, to Hill of Rubislaw at paras 27, 28–33, 35 and 39. It was argued that that case demonstrated that it was not necessary in all cases of declarator that the pursuer need to demonstrate a “legal relation” such as contended for by the second defenders.

[30] Further, it was argued, there was no reason in principle why the dicta concerning the title to sue in actions of declarator should not also be applicable to actions of reduction. Here, the second defenders had conceded that the pursuer had “interest”; that was enough.

[31] In relation to his second contention, it was argued that a person in possession of heritable subjects has a right to challenge the title of those who seek to eject him. This was a distinct argument from title to sue. In support of this the pursuer referred to the unreported case of Robert Bain v Andrew Robert Bain at paras 3–7, decided by Lord Glennie. By reason of the vesting of his property in his trustee upon sequestration, the purser no longer owned any part of the subjects. This was said to be similar to the position of the pursuer in Bain. However, the pursuer had rights of possession as conferred by s.40 of the Act. On this basis, he was entitled to challenge the title of any person who seeks to disturb his possession. If he has title to challenge the sheriff court

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decree, he has title to challenge the standard security because they are so intertwined.

[32] In relation to the question of competition, it was argued that the pursuer’s interests differed from those of the trustee. The pursuer’s interest was “personal” to him: he could lose his house. He should be allowed the benefit of s.40 of the Act. His challenge was to the status of the second defenders qua secured creditors in respect of his one-half pro indiviso share of the subjects.

[33] With respect to the cases cited by the second defenders, such as D&J Nicol, the pursuer was a party to the purported standard security and to the decree. He therefore had title and interest to challenge them. His title to do so is unaffected by the sequestration. In relation to Dickson, while accepting that the analysis about competition is the correct one, the pursuer’s case did not involve any competition with the interests of the creditors or trustee. The pursuer’s action is not asserting a right to any asset that forms part of his sequestrated estate. His challenge is to the status of the second defenders qua secured creditors. Further, it was argued that the pursuer’s stated intention of negotiating with the trustee does not constitute impermissible competition such as to fall foul of the dictum of Lord McCluskey in Dickson.

[34] In regard to the case of Thomson, which the second defenders relied on as an illustration of Dickson as applied to circumstances said to be similar to those in the instant case, the pursuer’s position was that if the case of Thomson was against him, then it was not binding on this court. It was wrongly decided.

In Thomson the pursuer in that case had granted a standard security to heritable creditors. Thereafter he had defaulted in his obligations. He had also been sequestrated. The heritable creditors had exercised their rights under s.20 of the Conveyancing and Feudal Reform (Scotland) Act 1970 (the 1970 Act) and had obtained a decree of ejection against the pursuer in Thomson. The pursuer in Thomson raised a separate action and sought to interdict his heritable creditors from enforcing the decree of ejection. He complained of the delay by the heritable creditors in enforcing their decree. The pursuer in Thomson also contended that a greater sum would be realised from the sale of his property if it were sold by agreement while it was still occupied and furnished rather than if it were sold in a forced sale with vacant possession. The trustee in sequestration declined to consent to the pursuer-bankrupt’s proposed action. The sheriff principal (C G B Nicholson QC) refused the pursuer’s appeal against the decision of the sheriff at first instance to refuse warrant to cite on the basis that the pursuer had no title to sue. The pursuer in this case said that the sheriff principal had erred in Thomson, p.1017B–C, where he had concluded that the proposed action by the bankrupt in that case “may compete” with the trustee or creditors. In any event, it was said that that case was distinguishable from the present one on the basis that, in contrast to that case, here there was a challenge to the fundamental right of the creditors to rely on the standard security and which had not been challenged in Thomson.

It could not be the case that the sequestration of the pursuer precluded his challenge to a document (the standard security) arising as a consequence of a forgery. The second defenders’ 11th plea-in-law should be repelled and a proof before answer allowed.

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The second defenders’ reply

[35] In a response to the pursuer’s arguments, the second defenders rejected the pursuer’s contention that a declarator was so analogous to an action of reduction that the dicta relevant to the interest required for the former action

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sufficed for the purposes of a reduction. In any event, the factual circumstances of the cases cited by the pursuer were all far removed from those in the instant case. None concerned a sequestrated person’s title to sue. The case of Thomson, and the analysis there of competition, was correctly decided. In any event, the trustee had not consented to this action by the pursuer. Unless he did so, there was a competition.

Further reply by the pursuer

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[36] This last point made by the second defenders, now founding on the absence of consent by the trustee, involved the broadening out of the basis of challenge by the second defenders to the pursuer’s title to sue. The pursuer asked to respond to this and did so as follows: whether or not there is competition cannot be equated to the question of whether or not a trustee in sequestration consents. The question of whether there is any competition is an objective test: Does the pursuer’s proposed action compete with the creditors?

That is not determined by the trustee. He does not get to choose in what manner to restrict other people’s rights.

Discussion and decision Preliminary: What is the extent of the trustee’s or creditors’ interest in the subjects that is derived from the pursuer?

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[37] On record, the pursuer seeks reduction of the whole of the standard security. The ground of reduction is forgery and which, he contended under reference to the case of Chalmers v Chalmers, para.23, meant that the standard security was a nullity. It was void.

[38] While forgery or fraud is no doubt a valid ground of reduction, the pursuer’s challenge extends too far. In this case, the pursuer owned a one-half pro indiviso share of the subjects in common with his wife. On the face of it, they each granted a standard security in respect of their respective one-half pro indiviso shares in the subjects in favour of the second defenders. (For present purposes, I leave out of account any argument that might arise if the pursuer and first defender were also guarantors of one another’s indebtedness.)

Leaving aside the pursuer’s allegations of forgery, it is only his one-half share, burdened by the standard security, that vests in the trustee. The first defender retains title to her own one-half share. There is no challenge to her grant of the standard security in respect of her own one-half share. There is no basis for reduction of the standard security quoad the first defender’s own one-half pro indiviso share of the subjects. Her grant is not said to be vitiated by any forgery.

Accordingly, only partial reduction of the standard security would be appropriate; that is, only quoad the pursuer’s one-half share, a matter which the pursuer’s counsel accepted in the course of his submissions.

The general rule that divestiture of title to estate on sequestration precludes title to sue

[39] In considering the arguments advanced before me at this procedure roll debate, it may assist to recall the purposes for which a bankrupt person’s property vests in his trustee in sequestration and to what use that property is put. It has long been a feature of Scottish personal insolvency (or bankruptcy), that, generally, the whole estate of the debtor vests in his trustee for the behoof of his creditors. As it was put by Lord Justice Clerk Inglis (as he then was) in the case of Galbraith v Whitehead, p.646, and which also concerned the title to sue of a discharged bankrupt:

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“The pursuer’s estates are under sequestration; and if one thing is settled more clearly than another, it is that the effect of sequestration is to vest the trustee in everything belonging to the bankrupt, and to divest the bankrupt to a corresponding extent. It is true that the bankrupt has obtained his discharge. But his estates are still under sequestration, and his personal discharge does not reinvest him, nor touch the trustee’s title.”

In the same case, Lord Neaves observed (at pp.646–647): “I should be sorry if it were thought that we failed to recognise the legitimate interest a bankrupt has to see that his debts are fully paid, and his estate full realised. But this (i.e. the case before the court) is a question of title to sue, and it is out of the question that a debtor of the sequestrated estate should be called into Court by the bankrupt without the clearest allegation and proof that the claim has been abandoned by the trustee. The right of a bankrupt under sequestration is to the surplus of the estate, and he may get a title to sue a particular debt, by retrocession or by dereliction.”

[40] Lord Neaves made similar remarks eight years later in the case of Graham v Mackenzie, p.800, and which also concerned whether a discharged bankrupt had title to sue for recovery of a debt falling under the sequestration: “A bankrupt has a material interest in his property; the debts are his debts, and the creditors are his creditors. The primary title, however, is in the trustee, and the creditors have extensive powers over the estate, and may discharge and compromise claims, of which the bankrupt cannot complain. At the same time, a trustee cannot gratuitously discharge a debt, or make a present of it to the debtor.”

In that same case of Graham Lord Justice Clerk Moncrieff acknowledged that there may be a “radical title” in a bankrupt who is sequestrated, although, he said, that it was not necessary in that case to define its extent. However, he affirmed the rule about general divestiture of a bankrupt on sequestration: “The divestiture is absolute so far as the object of the sequestration is concerned. Nothing remains in a bankrupt which can come into competition with the trustees and creditors.”

Accordingly by reason of that divestiture, a bankrupt had no title to sue in relation to the estate now vested in his trustee.

A

B

C

D

E

Circumstances in which a bankrupt might regain title to sue in respect of property failing within his sequestration

[41] The passages quoted in paras 39 and 40 above support the general rule that the effect of a sequestration is to divest the bankrupt of his property and so deprive him of title to sue in respect of his estate. However, that rule is not absolute, as is made clear by the references in the case law to a bankrupt’s “radical title”, or the circumstances in which he might none the less be allowed to pursue a claim or an asset (whether formally retrocessed to it (as required by the court in Graham v Mackenzie) or not (cf Fleming v Walker’s Trustees), if the trustee has abandoned the claim or asset in question or, at least, has been exceptionally dilatory in vindicating the asset or claim on behalf of the creditors (per Lord Neaves in Galbraith). This is a different circumstance from a case where a bankrupt calls his trustee to account for his intromissions, and which is explicable on the basis of the trustee’s fiduciary obligations qua trustee.

[42] Indeed, the observations of the court in Galbraith, might be seen as relaxing any formal requirement for retrocession of the bankrupt’s title if the trustee can be shown to have abandoned the asset or claim which the bankrupt

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wishes to vindicate or pursue. Subsequent cases have questioned whether abandonment by the trustee must necessarily be shown before a sequestrated person might regain title to sue. The modern analysis, set out by Lord McCluskey in Dickson, is to consider whether the bankrupt’s proposed action will “compete” with interests of his creditors and trustee. In Dickson, after reviewing the cases of Grindall; Fleming; and Forbes, and certain passages in Wallace’s Law of Bankruptcy in Scotland, Lord McCluskey stated: “The principle lying behind the statement in Wallace must be that the bankrupt cannot be allowed to litigate in such a way that he competes with the creditors, or the trustee as representing them, for any part of the assets sequestrated; and accordingly where such a competition exists or may exist the bankrupt will have no title to sue. That principle protects both the creditors and the party sued, whose interest is to be protected from the risk of double distress in the form of claims by a bankrupt and by the trustee in sequestration. In any event, Grindall is clearly distinguishable from this case in which the pursuers seek to reduce the very decree that set in train the sequence of events which led to their sequestration in a petition by the very party that obtained the decree now sought to be reduced. It would be strange indeed if U.D.T. could obtain a decree against the Dicksons, use it to sequestrate them, and then use their position as creditors in the sequestration (in respect of that decree) to prevent the Dicksons from seeking its reduction. No other authority was quoted in support of the submission by counsel for the defenders. In this action I am satisfied that, given the trustee’s attitude, the pursuers have not lost their title to sue for reduction of the decree which led directly to their sequestration. So I reject this argument.”

[43] I agree with this analysis. The benefit of this approach is, in my view, to focus on the real issue—whether the bankrupt’s proposed action is detrimental to the interests of his creditors or inimical to the purposes of the sequestration.

It avoids the exploration of what might be an arid or prolonged inquiry as to whether a trustee has been dilatory or can be demonstrated to have abandoned some part of the bankrupt’s estate, where he has not formally done so.

The inter-relationship between a trustee’s powers and rights of a secured creditor

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[44] In considering whether there is an impermissible competition between the pursuer and the interests of his creditors and trustee, it may assist to note the respective rights a heritable creditor and trustee may exercise in respect of heritable property of a debtor, now vested in his trustee, but which is subject to a standard security.

[45] Vesting of a bankrupt’s estate in his trustee is now governed principally by s.31 of the Act. (Of course, there have been an increasing number of statutory exceptions to that general vesting, but these are not relevant for present purposes.) The bankrupt’s estate vests in his trustee tantum et tale.

Furthermore, the limitations on vesting set out in s.33(3) of the Act expressly recognise that this is, “without prejudice to the right of any secured creditor which is preferable to the rights of the . . . trustee.” The Act does not use the phrase “radical right”, but s.51 (which sets out the order of priority in distribution of a bankrupt’s estate) provides for the return of any “surplus” (i.e. after payment of all creditors’ claims, expenses of the sequestration etc. but excluding unclaimed dividends) to the debtor.

[46] Accordingly, it is not so much that the standard security “survives” the sequestration, as the pursuer’s counsel put it, but that the prior real right in security over heritable property constituted by a standard security is accorded

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its appropriate ranking. By virtue of his standard security, a heritable creditor may (subject to the provisions in the 1970 Act) be entitled to exercise a power of sale in respect of the subjects secured. The standard security holder is under an obligation, imposed by s.25 of the 1970 Act as well as arising under the common law, to secure the best price that can reasonably be obtained. He is also under an obligation to apply any surplus proceeds in a specified way: s.27 of the 1970 Act. In the simple case, where there is no other or postponed security holder and the debtor has been sequestrated, the secured creditor would in the normal course account for any surplus proceeds to his debtor’s trustee in sequestration. Again, absent any rights created by diligence, those surplus proceeds would fall into the general pool of assets for distribution among the ordinary creditors by the trustee.

[47] If the secured creditor realises the subjects over which there is a standard security and there is a surplus upon realisation, he must account for that to the trustee. To the extant that the trustee has an interest in an asset that is subject to a real right in security, it is in respect of any surplus over the creditor’s claim and which then becomes part of the pool available for distribution amongst the body of creditors according to their ranking.

[48] There are also certain circumstances in which a trustee might exercise a power of sale in relation to subjects that are subject to a standard security: see s.39(4) of the Act. In those circumstances, the trustee would be bound first to pay the amount of the secured heritable creditor’s debt. On doing so, the standard security is discharged and the trustee may then sell the subjects (complying, of course, with other provisions of the Act governing such sales).

Any surplus proceeds would, in the simple case, then form part of the pool of assets from which he would pay ordinary creditors’ claims. In relation to heritable property subject to a standard security, the holder of that security and the trustee in sequestration each may exercise powers of sale in respect of the security subjects. Speaking broadly, they exercise those powers independently of the other, so long as the interests of the other are not prejudiced and the other statutory requirements they are subject to are observed. In the light of this understanding, one would not generally describe the relationship between a trustee and a standard security holder as in competition.

What is the “competition” apprehended by the second defenders?

[49] The second defenders argue that the pursuer’s averment that he wishes to reduce the standard security so as to be able better to “negotiate” with his trustee demonstrates competition with his trustee. It was contended that the trustee is bound to realise the best price he reasonably can for the assets of the debtor, but that any purchaser is likely to try to secure a purchase of the subjects as at a low a figure has he can. In that sense, the interests of a buyer and seller of a piece of heritable property are necessarily adverse. Here, the buyer and seller would be the pursuer and his trustee. This, it was argued, was the kind of competition that fell within the dictum of Lord McCluskey in Dickson and was impermissible competition.

[50] I find it hard to see why the pursuer should be in a different category than a third party seeking to purchase assets from the trustee. So long as the trustee fulfils his obligations in respect of the realisation of the estate, he is free to sell the debtor’s one-half share in the subjects to him, if he offers the best price. Indeed, it was not unusual in the past for a sequestration to be brought to an end by a general composition contract, whereby the debtor purchased the estate still in the hands of his trustee in exchange for his discharge and his reinvestiture in the estate. (That is the significance of the reference in the

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headnote in, for example, Whyte v Forbes, that the pursuer-bankrupt against whom a plea of no title to sue was taken had been discharged but “not upon a composition”, meaning that he had not been reinvested with title to his estate.)

[51] As noted above, subject to obligations to secure the best price on realisation and to account for any surplus, the powers exercisable by the pursuer’s trustee or by the second defenders as secured creditors in respect of the subjects and the interests they have in those subjects, are pursued largely independently of each other. They are not in competition in respect of this asset. The rights of secured creditors are respected by the process of sequestration but are, generally, pursued outside that process. Prima facie therefore, a challenge to the deed by which the second defenders obtained their real right in security does not entail a competition with the pursuer’s trustee or his creditors as a body. The pursuer is not asserting a proprietary right to the one-half share of the subjects that is now vested in his trustee. In another context, the pursuer’s claim would not result in the kind of double distress, or competition, involving two or more claims on the same asset such as to give rise to an action of multiplepoinding. The pursuer’s challenge is simply a direct action against his creditor, and in the manner in which he wishes to do so is by this action.

[52] For the foregoing reasons and on the basis of the information presented to me, I do not find that the pursuer’s action involves an impermissible competition with his trustees or creditors in the sense explained by Lord McCluskey in Dickson. It follows that I repel the second defender’s 11th plea-in-law.

[53] In relation to the decision of Sheriff Principal C G B Nicholson QC in the case of Thomson v Yorkshire Building Society, the nature of the bankrupt’s competing action was quite different and distinguishable from the case before me. So far as the report discloses, the bankrupt in that case had no substantive or fundamental ground of challenge to the secured creditor’s exercise of his powers of sale under the standard security. At best, the pursuer’s proposed action in that case was purely negative: to prevent ejection and only on the somewhat tenuous basis that the standard security holder had delayed in enforcing the decree in his favour. In any event, the court in Thomson did not have the benefit of the fuller argument presented to me.

What would be the effect of the pursuer’s reduction of the standard security granted quoad his one-half share of the subjects?

[54] Another way to test whether or not there is impermissible competition, as contended for by the second defenders, is to consider the effect of the purser’s action for partial reduction, if it were to succeed.

[55] One of the, perhaps unusual, features in this case is that the pursuer is not seeking to vindicate or otherwise assert a claim in respect of an asset that has vested in his trustee. He accepts that the subjects (or, more properly, his one-half share) has vested in his trustee. Rather, the object of the pursuer’s first conclusion is to reduce the standard security over the subjects. (As noted above, this should be quoad the purported grant of it over his one-half share of the subjects.) The pursuer’s counsel explains that the pursuer perceives it will be easier to negotiate with the second defenders for the purchase of the subjects if he has obtained decree of reduction (or, more properly, partial reduction) of the standard security.

[56] If that partial reduction were granted, the rights of the second defenders qua secured creditors in respect of the subjects would be commensurately cut down. This would not, of course, reduce the amount of their debt per se. The

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second defenders would continue to be secured creditors in respect of the first defender’s own one-half share.While they would no longer be secured creditors in respect of the pursuer’s one-half share of the subjects, the second defenders would simply rank as ordinary creditors in respect of the pursuer’s outstanding indebtedness to them.

[57] The overall effect, therefore, would not to be to reduce the total claim of the second defenders, but to change their “status” (as the pursuer’s counsel put it) to that of an unsecured creditor in respect of the pursuer’s debt that had been secured by the standard security over the subjects. The pursuer’s one-half share of the subjects which had vested in the trustee would become available to his ordinary creditors (including the second defenders). On one view, the pursuer’s action could be seen as beneficial to the body of ordinary creditors, even if detrimental to the interests of the second defenders qua secured creditors. The pursuer is not competing with the trustee or creditors, in the sense of seeking to claim an asset for himself or otherwise diminishing the assets available for distribution by the trustee for the behoof of his creditors.

The general pool of assets from which the ordinary creditors will be paid is commensurately increased by the amount which is no longer secured or would have been paid to the second defenders under the now partially reduced standard security in respect of the pursuer’s one-half share of the subjects.

A

B

C

Is it sufficient for the pursuer to demonstrate an “interest”?

[58] In the light of my conclusion that there is no impermissible competition, the pursuer’s arguments based on his equiparation of declarator with reduction does not, strictly, arise. In any event, I was not presented with full submissions and, accordingly, I will address this argument of the pursuer only briefly.

[59] There were several steps to the pursuer’s argument: the pursuer cited several dicta in cases of declarator, the import of which was to emphasize the latitude of what the courts recognised as constituting sufficient “interest” in actions of declarator. Next, it was argued a reduction was just a reverse of a declarator. On that basis, it was then argued that the same latitude afforded to ascertainment of “interest” for the purposes of a declarator should be extended to actions of reduction. In effect this was to obliterate any need to establish “title” for the purposes of an action of reduction. An outcome the pursuer’s counsel fairly acknowledged.

[60] The second defenders simply rejected the pursuer’s argument but did not develop their submission or refer to any other cases.

[61] In this case, the pursuer seeks a declarator in respect of a standard security. That remedy is, in my view, inapt. A standard security is a deed which creates binding legal rights and obligations. It is recorded or registered on a public register. A declarator would itself be insufficient as regards the abrogation of secured creditor’s rights created by such a deed. Generally, a deed is valid until reduced. For an action of reduction the pursuer must establish title and interest. There are many authorities that vouch this although none were cited to me. For present purposes it suffices to note the case of McLeod v Cedar Holdings Ltd. This case also entailed reduction of a standard security on the basis that the pursuer’s signature had been forged by her spouse. It is authority for the proposition that partial reduction in such circumstances in competent. The Second Division held that a declarator was insufficient and reduction was necessary.

[62] The pursuer seeks to conflate the nature of the remedy of declarator with that of reduction, with a view to applying the generous definition of “interest”—in seeming disregard of the need to establish any title to sue. In

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my view, the pursuer’s argument is misconceived. It fails to appreciate the differences between the remedies of declarator and reduction. The former may suffice where there is the desire to clarify a right that is uncertain in extent or existence, but where nothing is demanded of any contradictor. By contrast, reduction is a corrective remedy. The effect of reduction is to deprive the deed or decree under reduction of legal force and effect. A party seeking such a remedy must demonstrate title and interest. In my view, those requirements cannot be elided in the way the pursuer’s counsel sought to do.

B

Ancillary arguments

C

D

[63] It is not necessary to deal in any detail with other ancillary arguments presented. There is no suggestion that the pursuer will seek the consent of his trustee with a view to curing any want of title. (In view of my determination of the principal issue, consent by the trustee in respect of a non-competing action of the pursuer would be otiose.) The pursuer made no substantial reply to the second defender’s passing reference to Bentley. The facts of that case were far removed from those in the present one and, in the absence of argument, I express no view as to whether it is applicable to the facts in this case. Likewise, the second defenders offered no substantive response to the pursuer’s argument as regards any right arising as possessor of the subjects. Given Lord Glennie’s observations in para.7 of Bain, that the pursuer-possessor is entitled to come to court to show that the title of the person seeking to evict him is “no better than his own”, I am doubtful as to whether any right as a possessor extends to a challenge to one whose title derives ostensibly from a grant by the possessor. I reserve my opinion as to whether Bain falls to be applied to the facts in this case, and which are very different.

[64] It remains for me to thank counsel for their concise and ably presented submissions.

For the pursuer: E Campbell, instructed by Ledingham Chalmers LLP, Solicitors, Edinburgh.

For the defender: Gill, instructed by TLT LLP, Solicitors, Edinburgh.

E

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A COURT OF SESSION

31 March 2016

Outer House Lord Brailsford WEST LOTHIAN COUNCIL

Petitioners

B

against MB

First respondent and

KV

Second respondent

Parent and child—Permanence order—Evidence—Witness suffering from learning difficulties—Allegations of sexual offences against children but no conviction—Weight to be placed on them

C

Process—Party with learning difficulties—Procedure to discover understanding of process Section 14 of the Adoption and Children (Scotland) Act 2007 provides, inter alia: “(1) Subsections (2) to (4) apply where a court or adoption agency is coming to a decision relating to the adoption of a child.

(2)The court or adoption agency must have regard to all the circumstances of the case.

(3) The court or adoption agency is to regard the need to safeguard and promote the welfare of the child throughout the child’s life as the paramount consideration.

(4) The court or adoption agency must, so far as is reasonably practicable, have regard in particular to— (a) the value of a stable family unit in the child’s development; (b) the child’s ascertainable views regarding the decision (taking account of the child’s age and maturity), (c) the child’s religious persuasion, racial origin and cultural and linguistic background, and (d) the likely effect on the child, throughout the child’s life, of the making of an adoption order.

(5) Where an adoption agency is placing a child for adoption it must have regard, so far as reasonably practicable, to the views of the parents, guardians and other relatives of the child.

(6) In carrying out the duties imposed on it by subsections (2) to (4) an adoption agency must, before making any arrangements for the adoption of a child, consider whether adoption is likely best to meet the needs of the child or whether there is some better practical alternative for the child.

(7) If an adoption agency concludes that there is an alternative such as is mentioned in subsection (6), it must not make arrangements for the adoption of the child. . . .”

In an application for a permanence order, as a result of case management, a number of facts were agreed and contained in two joint minutes and at the proof affidavits were provided from all witnesses of fact. The first respondent

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suffered from learning difficulties and her agents considered it prudent to obtain a psychiatrist’s report in relation to their client’s ability to comprehend and give instructions in relation to the conduct of her case. In the event two psychiatrist reports were in fact obtained and they were, at least to some extent, at variance. Both psychiatrists agreed that the respondent had experienced learning difficulties and had an IQ which they placed as being somewhere between 70 and 80. They disagreed, however, as to the effect these disabilities imposed upon the capacity of the first respondent. One psychiatrist considered she had sufficient capacity to understand the proceedings and give instructions and the other psychiatrist took a contrary position. A preliminary proof was allowed, restricted to the issue of the capacity of the first respondent, and before that proof took place a meeting was arranged between the two psychiatrists which allowed them to reconcile some of the differences between them. At the proof both psychiatrists gave evidence as did the first respondent and the court held that she had sufficient capacity to understand the nature of the proceedings in which she was involved if certain relatively simple precautions were taken. These precautions included frequent breaks in the proceedings, the phrasing of questions in clear and straightforward language and the ability to have recourse to her solicitor to explain matters to her.

The first respondent had formed a relationship with K V who was Sri Lankan. He had a conviction for a contravention of s.127(1)(a) of the Communications Act 2003 which involved his sending M B a message which was grossly offensive or of an indecent, obscene or menacing nature. The petitioners had three other main causes of concern in relation to the relationship between the first and second respondent, all of them arising out of perceived concerns about his behaviour. The first concern related to criminal charges of alleged sexual conduct by the second respondent which were brought in England in 2010. However it was clear that these charges had been dropped within a short period of their having been made. They were dropped probably because the complainer in the charges, a vulnerable female person, who suffered from learning difficulties, had given inconsistent and contradictory accounts of her allegations to police. There were also allegations that the bail order relative to the charges had been contravened on two occasions. The second concern relating to the second respondent was an allegation that he had said that he had sexual thoughts about the first respondent’s daughter from a previous relationship. She was a child aged about eight. The third concern in relation to the second respondent were threats made by him to social workers in August 2013 that he would kill a support worker and social worker in the event that they refused to allow him and the first respondent to have the baby after its birth.

Although the sexual charges were not proceeded with, social workers continued to have concerns about his attitude to, and behaviour with, female person in general and young female person is in particular.

In addition to this there was a concern as to the second respondent’s ability to acquire parenting skills and cooperate with them to a sufficient degree to enable assistance to be offered in acquiring such skills so long as the first and second respondent resided together as a couple. The evidence demonstrated that both the first and second respondents suffered from learning difficulties and were vulnerable and their evidence had to be approached with some care and not to be too exacting in how it was judged. However the second respondent gave contradictory evidence about the allegations and his evidence was unreliable and incredible.

Held (1) that notwithstanding the lack of any criminal conviction, there had been material available to the petitioners at the time of the child, E V’s birth relative to the second petitioner’s behaviour towards vulnerable females which they could not have ignored and had been required to have had consideration of when formulating a policy or plan towards the ongoing care of the child E V (para.20);

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(2) that there had been plainly established before the court evidence of the concerns which had caused the petitioners to have proceeded down the route of permanence which ultimately led to the presentation of the instant petition to the court (para.22); and (3) that the grounds in the petition had been established, and both for the safety and welfare of the child throughout her childhood, it was necessary that the order sought should be granted (para.28); and prayer of the petition granted.

A

Case referred to:

B

W v Aberdeenshire Council [2012] CSIH 37; 2013 S.C. 108.

The full circumstances of the case and the arguments of counsel are to be found in the following opinion of the Lord Ordinary which was delivered on 31 March 2016.

LORD BRAILSFORD [1] In this petition application is made for a permanence order under s.80 of the Adoption and Children (Scotland) 2007 (the 2007 Act) in respect of a child “E V” (the child) who was born on 30 December 2013. In addition to the mandatory provision ancillary provisions are sought as follows: (a) vesting in the petitioners in relation to the child the parental responsibilities mentioned in s.1(1)(a), (b)(i) and (d) of the Children (Scotland) Act 1995 (the 1995 Act) and the parental rights mentioned in s.2(1)(b) and (d) of the 1995 Act, all in terms of s.82(1)(a) of the 2007 Act; (b) extinguishing in relation to the child the parental responsibilities mentioned in s.1(1)(a), (b) and (d) of the 1995 Act and the parental rights mentioned in s.2(1)(a), (b) and (d) of the 1995 Act all in terms of s.82(1)(c) and (d) of the 2007 Act in respect of both the mother and father of the child; (c) specifying that there shall be no direct or indirect contact between the child and the respondents; and (d) granting authority for the child to be adopted.

[2] The child’s mother is M B who was duly served with the petition and appeared as the first respondent. The child’s father is K V who was served with the petition and appeared as the second respondent.

[3] The petition was the subject of case management. A result of this process was agreement between the compearing parties of many of the background facts including that the child was taken into care at birth and had remained in care since that time. The matters which were agreed between parties were contained in two joint minutes (Nos 35 and 55 of Process). The case proceeded to proof on 15 December 2015, a diet which required to be continued, the proof ultimately concluding on 2 February 2016. Affidavits were provided from all witnesses of fact. These affidavits, and reports from experts, were taken as evidence in chief at proof.

[4] One incidental matter relating to procedure should be mentioned at this stage. Agents acting for the first respondent were aware that she had experienced learning difficulties. As a consequence of this they, quite properly, considered it prudent to obtain a psychiatrist’s report in relation to their client’s ability to comprehend and give instructions in relation to the conduct of her case. A psychiatrist’s report was instructed and, for reasons which are not material, was delayed in preparation. As a result of this delay a second psychiatrist was instructed to prepare a report. As it happened both psychiatrists instructed produced reports and submitted them to the agents within a few days of each other. The reports were, at least to some extent, at variance. Both psychiatrists agreed that the first respondent had experienced learning

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difficulties and had an IQ which they placed as being somewhere between 70 and 80. The psychiatrists did however disagree as to the effect these disabilities imposed upon the capacity of the first respondent. One psychiatrist considered she had sufficient capacity to understand the proceedings and give instructions.

The other psychiatrist took a contrary position. This matter was brought to the attention of the court at a case management by order hearing. On the motion of the first respondent I agreed to allow a preliminary proof restricted to the issue of the capacity of the first respondent. Prior to that proof taking place a meeting was arranged between the two psychiatrists as a result of which they were able to reconcile some of the differences between them. At the preliminary proof I heard evidence from both psychiatrists and from the first respondent. I was satisfied that whilst it was plain that the first respondent experienced problems in comprehending complex and difficult questions and situations, she did have sufficient capacity to understand the nature of the proceedings she was involved in if certain relatively simple precautions were taken. These precautions included frequent breaks in the proceedings, the phrasing of questions in clear and straightforward language and the ability to have recourse to her solicitor to explain matters to her, all matters which, with the agreement of all counsel concerned, the court was able to accommodate in the substantive proof. I made no order and allowed the case to proceed to proof.

[5] The legislative background against which this petition requires to be considered was not contentious. It is contained in ss.80–84 of the 2007 Act. S.80 permits the granting of a permanence order with mandatory provisions and such ancillary provisions as the court thinks fit. S.81 stipulates the mandatory provisions. Ancillary provisions are stipulated in s.82. In the present petition the relevant orders are those in s.82(1)(a), (c), (d) and (e).

S.83 provides the conditions for orders granting authority for adoption. S.84 sets forth the conditions applicable to the making of a permanence order and stipulates the legal test for making a permanence order. S.84(1) is not relevant in the circumstances of the present case. S.82(2) is relevant in this application.

S.84(3) and (4) provide that in considering whether to make an order and, if so, what provisions the order should make, the need to safeguard and promote the welfare of the child throughout childhood is the paramount consideration.

S.84(5) sets forth certain steps the court must take before granting an order.

That the foregoing were the relevant statutory provisions which require to be considered in relation to this petition was not disputed by counsel for any party. S.14 of the 2007 Act is also relevant to the consideration of whether authority to adopt should be granted. Insofar as relevant to the circumstances of this petition the 2007 Act provides: [His Lordship quoted the section as set out above and continued:] There was, further, agreement between the parties that the correct approach to interpretation of the legal test for the making of a permanence order was that set down by the Inner House in W v Aberdeenshire Council at para.13.

[6] I have already indicated that a considerable amount of the factual background to this application was agreed and contained in two joint minutes.

These joint minutes are in the following terms: “Joint minute 35 1. All social work records, reports and minutes lodged as productions are, so far as copies, to be held as equivalent to principals and as having been written or pronounced by parties by whom they bear to have been written or pronounced on, on or about the dates they respectively bear to have been written or pronounced on, on or about the dates they respectively bear.

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2. E V, (the child), was born on 30 December 2013 at Livingston. The child’s natural mother is M B, residing at address given. The child’s natural father is K V, also residing at address given. The child’s father is also referred to by the petitioner as (name given). K V has parental responsibilities and rights in respect of the child.

3. M B has a learning disability. K V has told the children and families team of the Social Work Department of the petitioner, (the SWD), that he also has a learning disability.

4. M B has two other children, M P, who was born on 7 December 2004 and F P, who was born on 18 April 2007, whose father is not K V. On the recommendation of the SWD these children were placed with their father, Mr P, after his relationship with M B broke down in or around mid–2012.

Following Mr P’s sudden death in 2013 both of these children were accommodated by the SWD and remain so accommodated. The children have not been in M B’s care since 31 October 2012. A factor in the SWD decision not to allow these children to be returned to M B’s care both before and after Mr P’s death was her relationship with K V. M B has regular contact with these two children.

5. The SWD first became aware of the child after a referral to it by M B’s social worker in the adult services section of the petitioner’s SWD. A pre-birth child protection case conference was held on 20 November 2013, at which conference it was decided the child should be placed on the child protection register. At this time, K V continued to live in Surrey, but stated his intention to move to West Lothian to live with M B and to care for the child.

6. K V is Sri Lankan. His first language is Tamil. K V was born in Sri Lanka and, as a child, moved to India for political reasons. His family moved to Surrey around 2000 and remain living there.

7. On 9 August 2013, K V was charged with a contravention of s.127(1) (a) of the Communications Act 2003. The charge narrates that he sent M B a message that was ‘grossly offensive or of an indecent, obscene or menacing nature’. On 29 January 2015, K V was convicted of this charge.

Production 6/40 is a true and accurate copy of an extract conviction relating to this conviction. KV was sentenced to pay a fine of £135.

8. In December 2013, prior to the child’s birth, K V moved to live with M B. 9. On 30 December 2013, the date of the child’s birth, a child protection order was granted at Livingston Sheriff Court, with a condition of non-disclosure of her address, for contact between the child and M B to be supervised and for there to be no contact between the child and [K] V. On 2 January 2014, the child was discharged from hospital into the care of foster carers and has since then remained accommodated by the petitioner.

10. On 3 January 2014, a children’s hearing decided to continue the child protection order. Production 6/9 is a true and accurate record of the decisions reached and the reasons for those decisions.

11. On 10 January 2014, a children’s hearing decided to make the child subject to an interim compulsory supervision order and to refer the grounds of referral to the sheriff for proof. On 31 January 2013, 19 February 2014 and 7 March 2014 children’s hearings decided to continue the interim compulsory supervision order. The condition of non-disclosure of address was continued at these hearings. Productions 6/10, 6/13, 6/16 and 6/17 are true and accurate records of the respective decisions reached at the hearings and the reasons for those decisions.

12. A parenting capacity assessment relating to M B began on 2 February 2014. Six one-hour sessions were offered to her and she did not attend two sessions. She missed one session due to missing her bus. She was late for another session. By the time M B arrived for contact the child had

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been returned to her foster carers. Production 6/5 is a true and accurate record of the assessment report prepared by Elisha McCulloch, nursery officer.

13. On 23 May 2014, amended grounds for referral were not accepted but established after proof. Production 6/51 is a true and accurate copy of the interlocutor pronounced on that day. Production 6/52 is a true and accurate copy of the amended grounds for referral.

14. On 12 June 2014, the child was made subject to a compulsory supervision order with a measure that the child shall have contact with Ms B a minimum of once per week, supervised by or on behalf of the SWD and a measure that she shall have no contact with K V. Production 6/25 is a true and accurate copy of the order and the measures included in the order. The child remains subject to a compulsory supervision order.

15. On 16 July 2014, at a looked after children review meeting, the meeting decided to refer the child’s case to West Lothian Adoption and Permanence Panel to consider the best legal route to secure the child’s care in the long term. Production 6/28 is a true and accurate copy of the minutes of this meeting.

16. Production 6/31 is a true and accurate copy of a form, Form E, prepared for a meeting of West Lothian Adoption and Permanence Panel, signed by the child’s social worker, Elizabeth, (known as Libby), Hackett, the SWD team leader and the child’s parents on 3 September 2014.

17. Production 6/32 is a true and accurate copy of a form, Form E, Part II prepared by Libby Hackett for consideration by the West Lothian Adoption and Permanence Panel.

18. On 16 September 2014, West Lothian Adoption and Permanence Panel considered the child’s case. It recommended that the child needed permanent alternative care as rehabilitation to her parents was not an option. The panel considered that before recommending the route to achieve permanence, further information was needed about the possibility of kinship care options. It requested that risk assessments be completed in respect of K V’s parents and M B’s grandmother, to be considered at a continue panel.

19. On 14 October 2014, West Lothian Adoption and Permanence Panel met again to consider the child’s case. The panel recommended that an application for a permanence order with authority to adopt should be the legal route to achieve permanence for the child.

20. On 22 October 2014, a children’s hearing considered the child’s situation. A decision was taken to reduce M B’s contact to the child from once a week for one hour, supervised, to once a month, for one hour, supervised. Production 6/36 is a true and accurate copy of the record of proceedings of the hearing. P.5 of this production is a true and accurate copy of the compulsory supervision requirement as varied.

21. On 6 November 2014, a children’s hearing provided advice to the court, the panel advised that it was in agreement that a permanence order with authority to adopt should be sought by the petitioner. Production 6/38 is a true and accurate copy of the record of proceedings of that hearing.

22. Neither parent attended a looked after children reviewing hearing on 24 February 2015.

23. M B was booked into the antenatal clinic at 12 weeks gestation and was a good attender thereafter. Production 6/41 is a true and accurate copy of a pregnancy medical report in respect of the first respondent’s pregnancy with the child.

24. K V had contact with the child for the first time since she was discharged from hospital after her birth on 14 May 2015, for one hour, observed by Dr Richard Woolfson.

25. The petitioners have not, at any time, conduct a formal assessment of K V’s parenting capacity.”

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and

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“Joint minute 55 1. The report of Dr Coupar, dated 17 April 2015, number () of process shall be held to be his evidence in the cause.”

[7] I turn now to consider the evidence. At proof the petitioners adduced the evidence of six witnesses. Elizabeth Hackett was the lead social worker responsible for the child’s case. She was supervised by her senior social worker Lindsay Murdoch. Elisha McCulloch prepared a parenting assessment in relation to the first respondent. Mary (Rae) Cochrane was a housing officer who had offered support to the first and second respondents in late 2015. In addition to these witnesses Detective Constable James Fox and Detective Sergeant Stephen Morris gave evidence in relation to police involvement with the second respondent.

[8] The first respondent gave evidence on her own behalf. In addition she adduced evidence from Mrs Helen Stirling, an independent social worker.

[9] The second respondent also gave evidence on his own behalf and, in addition, adduced the evidence of an expert child psychologist, Dr Woolfson.

[10] The general tenor of the evidence adduced on behalf of the petitioners is as follows. The petitioners’ concerns in respect of the first respondent arose during the course of her pregnancy with the child E V. As is agreed in para.5 of the joint minute No 35 of Process there was a pre-birth child protection case conference held in relation to the petitioners’ concerns on 20 November 2013 approximately five weeks prior to the birth of the said child. At the time of this conference the second respondent resided in Surrey but had stated his intention to move to the local authority area for which the petitioners were responsible and to reside there with the first respondent and participate in the care of the couple’s child after birth. It is fair to say that on the basis of the evidence the primary source of the petitioners’ concerns in relation to the child E V arose as a result of the relationship between the first and second respondent.

[11] There were three main causes for the petitioners’ concerns in regard to the relationship between the first and second respondent, all of them arising out of perceived concerns about the behaviour of the second respondent.

The first concern related to criminal charges, of alleged sexual conduct by the second respondent which were brought in England in 2010. It was clear on the evidence that these charges had been dropped within a short period of their having been made, probably some time in late 2010 and certainly a considerable time before the child’s birth in December 2013. On the basis of the evidence I heard it would appear that the complainer in the charges, a vulnerable female person, who suffered from learning difficulties, had given inconsistent and contradictory accounts of her allegations to the police. As a result of this the police, as the prosecuting authority in England, did not consider it safe to proceed with the charges. One further matter did arise out of these charges. After the charges were brought and before they were dropped, the second respondent was granted police bail. Evidence was led at the proof from an English police officer involved in the case to the effect that the bail order had been contravened on two occasions, something which the second respondent tacitly acceded to in his cross-examination. The bringing of the criminal charges and the subsequent dropping of these charges and the bail contraventions were matters within the knowledge of the petitioners, and in particular the social worker responsible for the care of the child E V, when she prepared reports in relation to the child and her care. The social worker

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responsible quite candidly accepted that these matters had been considered by her when making decisions as to how to write her report and the recommendations she would make. She accepted that notwithstanding that the charges had been dropped she considered them of importance and something which she took into account when forming her views.

[12] The second concern relating to the second respondent was an allegation that he had said that he had sexual thoughts about the first respondent’s daughter from a previous relationship, M P, that person being a child aged about eight at the relevant time.

[13] The third concern in relation to the second respondent were threats made by him to social workers in August 2013 that he would kill a support worker and social worker in the event that they refused to allow him and the first respondent to have the baby after its birth. In the same vein threats, or a message of a threatening nature, made by the second respondent to the first respondent also in August 2013. These threats were reported to the police, were the subject of a criminal prosecution and resulted in the conviction which is noted in para.7 of the joint minute No 35 of Process.

[14] All of these concerns were spoken to by the various witnesses who gave evidence on behalf of the petitioners. For reasons which will become apparent it is not necessary to rehearse the detail of this evidence. The tenor of the evidence was that notwithstanding that the criminal allegations in England were not proceeded with the social workers charged with responsibility for this case by the petitioners continued to have concerns about the second respondent’s attitude to and behaviour with female persons in general and young female persons in particular. Beyond this the social workers were also concerned as to the second respondent’s ability to acquire parenting skills and cooperate with them to a sufficient degree to enable assistance to be offered in acquiring such skills so long as the first and second respondent resided together as a couple. This problem had the consequential effect of adversely affecting the first respondent’s ability to acquire the necessary parenting skills which would assist her in coping [with] an infant child. The reason why it is not necessary to consider the evidence of all the petitioner’s witnesses in detail in relation to these matters arises from the evidence of the respondents themselves.

[15] In considering the evidence of the respondents I had regard to the fact that it had been established that both these persons had experienced learning difficulties throughout their lives. In the case of the first respondent I had, as already noted, as a result of earlier procedure in the case heard evidence about her learning difficulties. During the course of that hearing I had also heard evidence from appropriately qualified medical personnel who assessed her IQ as being between 70 and 80. My understanding is that this means that the first respondent would fall to be regarded as a person of significantly below average intelligence and again on the basis of the evidence I heard in the preliminary proof, a person with borderline capacity so far as ability to participate in legal proceedings is concerned. Whilst I had less detailed information in relation to the second respondent’s cognitive ability I was aware that he had received his education outwith the normal school system as a result of his learning disabilities. I was also aware from the evidence in this proof that when he was interviewed by police in London in connection with the 2010 criminal allegations he was always accompanied by a responsible adult. In evidence he accepted, and it was in fact represented to the court by his counsel, that he had difficulties with reading and writing. There was also evidence which he gave that he had difficulty in understanding and managing money. This was a

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problem also experienced by the first respondent. On their own evidence the respondents considered that they required assistance in the management of the state benefits which they received. The matter was also covered by the agreement contained in para.3 of the joint minute No 35 of Process. As a result of these factors I considered both respondents to be vulnerable and as a consequence I had to approach the evidence of these persons with some care and not be too exacting in how I judged their evidence. As already noted as a consequence of the preliminary proof frequent breaks were allowed in the examination of the first respondent in order to ensure that she did not become stressed by the experience with potentially adverse consequences to her comprehension of the process. Whilst there was no formal request in relation to periodic breaks in the evidence of the second respondent as a matter of fact there were a significant number of interruptions which had the same practical effect. I should also note that all counsel involved in the case were careful in attempting to ensure that the questions put to these persons were couched in straightforward and readily understandable terms. Notwithstanding the efforts of counsel there were a number of occasions where both respondents required to have questions repeated or explained to them in order to ensure that they understood what was being asked. Making allowance for these difficulties it did appear to me that both these witnesses attempted to answer questions put to them to the best of their ability. This consideration is important because, in my judgment, a considerable number of the answers given by both respondents were, quite plainly, contrary to their interests.

[16] So far as the petitioners were concerned it was a concern of Elizabeth Hackett, the lead social worker in the case, that the second respondent had said that he wanted to have sex with the first respondent’s daughter, a child aged about eight at the time. The original source of this information, so far as the petitioners were concerned, was the first respondent. She had told workers in the homeless unit where she was staying that the second respondent had said he would like to have sex with the child. The first respondent also reported this matter to the police, albeit the complaint was later withdrawn. At a meeting Elizabeth Hackett and her manager had with the second respondent on 19 December 2013 the position he adopted was to say that he should not have said this out loud. So far as the first respondent’s evidence was concerned she accepted the second respondent’s assurance that the statement was either not said or, if it was, was uttered as a joke. She did not appear, at least as a matter of her evidence, to contemplate the possibility of any alternative explanation. Whilst I have concerns about the first respondent’s evidence in this regard it is, I think, one area where allowance should be made for her cognitive limitations. With some hesitation I do not interpret the first respondent’s change in position on this matter as an indication of her tailoring her evidence to suit her interests but am prepared to accept her changing attitude to these concerns as an example of naivety, or exaggerated, possibly misplaced loyalty, to her partner the second respondent.

[17] More significant were passages of the evidence of the second respondent. Whilst it is plain from the evidence of the police officer who investigated the allegations of sexual misconduct against the second respondent that charges initially brought were dropped the second respondent himself accepted in evidence that there had been a relationship between the vulnerable female person in question and himself. The evidence he gave requires to be considered in some detail. The matter of the criminal allegations of a sexual nature were addressed by the second respondent in his affidavit dated 20 July 2015 at para.5. There he depones:

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“The complainer was a female friend of mine. We met around 2007 when both attended the same college. She made allegations to police that I had raped her and had behaved in an aggressive and threatening manner towards her. I remember speaking to police about these allegations . . . I remember that a solicitor was present during my police interview. . . . A relative sat in the interview with me along with my mum. I was questioned about the allegations made by the complainer. She was a very close friend of mine at the time although she was not my girlfriend. We . . . spent time in each other’s houses. We spoke regularly on the telephone and via text messages. We also spent time together at college. The complainer and I never had a sexual relationship. I sometimes stayed overnight at her property. She would stay overnight at my property. I would usually stay in the spare room or in a different bed. We never had sexual intercourse.”

Later in the same paragraph the second respondent deponed: “I believe that the complainer wanted more from our relationship. She tried to start a physical relationship. She would regularly try to kiss and cuddle me. I was not interested in this. I once hugged her and kissed her on the cheek. She also on one occasion showed me her private body parts. She sometimes asked to have sex with me. I always said no.”

The second respondent’s position on affidavit, which was adopted in oral evidence as part of his examination in chief was accordingly that he had never had sexual intercourse with the complainer in the 2010 London allegations. Notwithstanding this position there was evidence before the court from DC Fox, referring to a police interview on 13 November 2010 (No 6/60 of Process) that the second respondent had admitted to having sex with the complainer. In particular in a police interview on 13 November 2010 (No 6/60, pp.38 and 39) the second respondent is noted as having said in relation to these allegations, “that he had first had sexual intercourse with the victim about the end of August 2009 at his own H/A but that this was fully consensual”.

He is noted later in the same interview as follows: “The victims initial description of the first occasion she claims the suspect raped her in his own bedroom following a meet in a local park was read out to the suspect who after initially denying the event went on to agree he had lay on top of the victim in his bed where after they kissed and cuddled before going on to have vaginal sexual intercourse.”

Later in the same interview it is recorded: “When asked how many times he thought he had sex with the victim suspect stated more than twice maybe up to 40 times.”

In examination in chief he was directly asked if he had told the police that he had sex with the vulnerable female complainer. The passages from the police records in No 6/60 of Process which I have quoted were put before him.

Because of concerns about his learning disability these passages were read out to him. His position was that he didn’t know what he had stated to the police but that “the police twisted” what he had said. He was challenged on this position in cross-examination, the relevant passages in production 6/60 having again [been] put before him, at which point he admitted that he had been asked by the police whether he had had sex with this female and that he did tell them he had “20–40 times”. When the terms of the police statement (6/60) were put directly to him he maintained that he had told the police that he had sex because the female complainer, whom he referred to as his “ex”, had told him to say this. He said:

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“I didn’t think it was important to tell the police the truth, I was only telling the police what my ex said. I would have told the police the truth, but I was only saying what my ex said. I didn’t think I had sex with her.”

[18] In relation to the allegations of breach of bail conditions the second respondent’s position was in his affidavit at para.8. The bail conditions to which the second respondent was subject were, essentially, not to approach the complainer, her home or the college she attended. In his affidavit the second respondent deponed (in para.8) that a male friend of the female complainer came to the second respondent’s house and was let in. He then stated that the female complainer arrived later and said that she and the male wanted to stay overnight at his (the second respondent’s) house. Despite acknowledging awareness of the bail condition he then deponed that he admitted the female and that she and the male proceeded to enter his bedroom and have sex there. He also deponed, “After she had sex with Robert she asked me to have sex. I said no. They were not forced to stay. I was not violent towards either of them nor did I threaten violence.” Notwithstanding what was said in the affidavit he proceeded when cross-examined at proof to give a wholly inconsistent and contrary account of the circumstances surrounding the alleged breach of bail conditions. When asked about the alleged breach of bail condition, and in particular what he stated in para.8 of his affidavit, he said, “They didn’t come into my house. I am sure of that.” When pressed on the terms of his affidavit he said, “They entered in at my door, not actually in the house.” He then, contradicting his affidavit said: “I only let Robert in the house not (the female). I let him in, there was no order against him.” When it was pointed out that this was inconsistent with the terms of his affidavit he said, “I know I said that in my affidavit, but I don’t know. Robert may have let (the female) in when I went to get them food.” He then stated, contrary to his affidavit, that the female had asked him to have sex with him in a telephone call. In relation to the issue of a breach of bail condition there was also evidence, again coming from DC Fox who spoke to police records (6/60) that after the second respondent was made subject to conditions he attended at the college where the complainer studied and had approached her. The matter was apparently reported by a teacher at the college, where the police attended.

The incident resulted in the imposition of stricter bail conditions. In his evidence in this proof the second respondent’s answer to this allegation was that he only wanted to speak to the complainer. In relation to the first alleged breach of bail conditions the two versions given, one in the affidavit and the other in court, are wholly inconsistent and cannot stand together. In these circumstances I consider I am entitled to make an adverse inference against the second respondent. So far as the second breach is concerned the second respondent admitted a breach.

[19] The result of all this evidence was that whilst it was plain that there were no criminal proceedings brought against the second respondent there was evidence which this court required to consider in relation to the relationship between the second respondent and the female person who had made the allegations against him. Furthermore, it also appeared to me that there was evidence before the court to support the proposition that the second respondent had breached bail conditions imposed upon him during the time when the charges against him were live. The breaches appear to have occurred twice, once where I infer from the evidence that he allowed the complainer into his house, second where on his own evidence he accepted entering premises where the female complainer was studying.

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[20] I require to consider the implications of this evidence. In a case where I was assessing the evidence of a person of average cognitive ability I consider, having regard to the contradictory terms of the second respondent’s affidavit evidence and his evidence in court, that I would be justified in making a finding that his evidence in relation to whether or not he had a sexual relationship with the 2010 London complainer and whether he breached bail conditions at that time was unreliable and incredible. I also consider that I would be justified in forming an adverse inference from that finding and accordingly on the balance of probabilities, that he did have a sexual relationship with the complainer and that he did breach the bail conditions. In the circumstances of this case however I am not attempting to assess the evidence of a person of average cognitive ability but rather a person who has suffered from lifelong learning disabilities.

In these circumstances assessment of the witness is, in my view, extremely difficult. I have already noted (see para.15) that the second respondent did attempt to answer all questions put to him. His demeanour throughout his examination was appropriate. Notwithstanding that, he gave evidence, which I have narrated at length, which was contradictory to not only evidence given by a police officer, referring to material in police records, which I had no reason to doubt but also contradicted matters spoken to in his own affidavit. Having regard to these considerations I conclude that I cannot safely accept the second respondent’s evidence, save where it is supported by other reliable evidence. In these circumstances it appears to me to be established on the balance of probabilities that the concerns harboured by the petitioners in relation to the second respondent’s sexual proclivities were justified. In arriving at that conclusion I should make it clear that I am making no finding in relation to whether or not the sexual allegations made in 2010 were true or not. The relevancy or otherwise of these allegations is not a matter for me, nor have I heard any evidence in relation to the relevancy of these matters. My finding is confined to concluding that, notwithstanding the lack of any criminal conviction, there was material available to the petitioners at the time of the child E V’s birth relative to the second petitioner’s behaviour towards vulnerable females which they could not ignore and were required to have consideration of when formulating a policy or plan towards the ongoing care of the child E V. [21] Similar considerations apply in respect of the allegations about the second respondent’s threats uttered against social workers in the employment of the petitioners and his alleged utterance of a remark which could be construed as amounting to sexual interest in a minor. In relation to the first of those matters, the utterance of threats of violence against the petitioner’s staff, those matters were spoken to by the two persons against whom the threats had been uttered. The second respondent himself accepted that he had made the utterances but attempted to explain them away as merely being hot air or expressed in the heat of the moment. Having regard to the nature of the threats, that he would kill a social worker if he and the first respondent did not obtain custody of the child, I do not consider that the social workers involved would be likely to ignore them as idle or made in jest. Moreover I do not consider that it would have been appropriate for social workers charged with the responsibility of ensuring the care of an infant child to treat such remarks in that way. It follows that there being evidence of the threats being uttered from both the persons who heard them and the person that made them it is my view that they were factors which the petitioners required to have regard to. Exactly the same considerations apply in relation to the remarks about sexual interest in a minor child. I consider that regard required to be had to that remark by the petitioners.

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[22] It follows from the foregoing that there was in my view plainly established before the court evidence of the concerns which caused the petitioners to proceed down the route of permanence which ultimately led to the presentation of this petition to the court.

[23] A further and important consequence of these concerns was that the continued relationship of the first and second respondent caused the petitioners to form the view that it was necessary to proceed with the petition for permanence. The social worker primarily responsible for this case, who was the main witness for the petitioners, was clear that the views of the petitioners in this matter were critically based upon the consideration of the factor that the first and second respondents were a couple, with the first respondent making her position clear that she would not break up this partnership. There was evidence before the court that the responsible social worker had discussed the first respondent’s relationship with the second respondent making it clear that if she left him the petitioners would reassess the case. It was appreciated that the first respondent herself had difficulties in caring for an infant child. It was however considered that efforts could be made to assist her and thereafter assess her suitability as a custodian for the child. The evidence, repeated at proof by the first respondent, that she would not contemplate disrupting her relationship with the second respondent, had the effect of rendering that course impossible.

[24] A number of other matters also require to be stated. There was evidence that the second respondent said to nursing staff in the hours immediately after E V’s birth that he was entitled to remove the child from hospital and would do so. This may have caused, or at least been a factor, in the application for a CPO in respect of the child which was made shortly after birth. There was no direct evidence from nursing staff about this matter. In any event on the evidence of the responsible social workers this matter did not figure prominently in their subsequent management of the case. I do not place any weight on it in reaching my decision.

[25] There was evidence in relation to the parenting skills of both respondents. In relation to the first respondent there was evidence which I accepted, of a lack of engagement with social workers, evidenced by failure to attend contact sessions and, further, inability to grasp other than the basic parenting skills, at such contact sessions which she attended. The first respondent’s own expert social worker witness, Helen Stirling, expressed the view that even with extensive support from social workers, “It is likely that (the first respondent) might only even master physical care tasks, and not manage the more complex tasks of meeting EV’s emotional and social needs.” The witness went further and stated: “[E]ven if (the first respondent) had learned and retained these basic parenting skills, the more complex issue of concerns around the physical and emotional safety of (E V) and also her social and emotional development would remain.”

So far as the second respondent was concerned he had had very limited contact, just one session with E V. In fairness it was not suggested on his behalf that he was able to demonstrate the necessary parenting skills required for the care of E V. The highest that was suggested on his behalf was that he had the potential to develop a bond with E V, this based upon the evidence of Dr Woolfson who prepared a report and gave evidence. Dr Woolfson’s evidence was, through no fault of his, based upon his observations of one contact session, a factor which I consider limits the utility of his views. I accordingly considered

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his evidence of limited value in this case. It should also be noted that in considering whether or not future contact between the second respondent and the child, in the event of adoption of the child, would be of benefit to the child he had he not taken into account a number of factors postulated as relevant by a Professor Triseliotis in a paper which Dr Woolfson accepted was relevant to consideration of this factor. This consideration reinforces my view of the limited assistance gained from Dr Woolfson’s evidence.

[26] Lastly I should deal with the issue of contact. The first respondent at present enjoys contact with the child. The evidence was that whilst the child is not significantly disturbed by this contact she equally derives no significant benefit. Her bond with the first respondent is no more than that which she exhibits towards other adults with whom she has periodic contact. So far as the second respondent is concerned he has only enjoyed contact with the child on one occasion, that witnessed by Dr Woolfson to which I have already referred. There is, as a matter of concession by counsel for the second respondent, no existing bond between the child and the second respondent. I have already indicated that for the reasons explained in para.25 I placed little weight on Dr Woolfson’s evidence in this case. So far as benefit is concerned there was evidence which I accept to the effect that an adopted child settles better if there is no contact with his or her natural parent. Having regard to these matters I am satisfied that there is no evidence of the child deriving any benefit from contact with either parent in this case. Conversely there is evidence that the relationship with adoptive parents would be assisted if no contact was permitted. In these circumstances I am not prepared to make an order for contact.

[27] I should mention that there was some evidence in relation to the respondents’ difficulties in coping with financial matters and in relation to consistent maintenance of appropriate standards of cleanliness and hygiene in their accommodation. While these matters were in my view proved they were of less significance in forming my opinion than the concern with which I have dealt at greater length.

[28] On the basis of the foregoing I am of the view that the grounds in the petition have been established. I am satisfied that both for the safety and welfare of the child throughout her childhood it is necessary that the orders sought should be granted. In the circumstances I will grant the order sought in the prayer of the petition.

For the petitioners: Louden, instructed by Morton Fraser, Solicitors, Edinburgh.

For the first respondent: Cartwright, instructed by Aitkens Family Law, Solicitors, Edinburgh.

For the second respondent: Aitken, instructed by TC Young, Solicitors, Edinburgh.

F

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A COURT OF SESSION

13 May 2016

Inner House (Extra Division) Lord Menzies, Lady Smith and Lord Drummond Young ADAM WAGNER

Pursuer (Respondent)

B

against THOMAS GRANT ARLA FOODS UK LTD

Defenders (Reclaimers)

Reparation—Duty of care—Road traffic accident—Milk lorry reversing into farm road at night—Collision with motor cycle—Whether lorry driver and his employer liable Damages—Contributory negligence—Whether pursuer partly to blame The pursuer, a learner motorcyclist, was involved in a collision with an articulated milk lorry which had been reversing into a farm entrance in darkness on a narrow country road. The pursuer was being supervised by his uncle who was also riding a motorcycle about 30 feet behind him. The driver of the tanker was reversing the articulated lorry into the farm entrance with his headlights on, and his hazard warning lights working. His reversing lights and working lights were also illuminated. The cab of the articulated lorry was generally on the eastbound carriageway straddling the white line or on the white line with its headlights shining down the road in an easterly direction and the trailer was situated broadly diagonally across the westbound carriageway, so that the whole road was blocked. It was not possible for the lorry to drive forward into the farm entrance and then turn to come out. The evidence was that the pursuer saw the defender’s vehicle on the road with its cab on the correct side of the road, but did not see the trailer straddling his side of the road until the pursuer was very close to it and unable to stop or avoid it. The pursuer’s motorcycle collided with the rear wheel arch and he suffered serious injuries. The Lord Ordinary found that the accident was caused partly by the fault of the pursuer and partly by the fault of the second defenders and that the portion of blame to the pursuer fell to be assessed at 40 per cent. He granted a decree of absolvitor against the first defender.

Both parties reclaimed against the interlocutor. The second defenders challenged the Lord Ordinary’s finding that the accident was caused by fault of the second defenders and also challenged his finding as to the extent of contributory negligence on the part of the pursuer. The pursuer challenged the Lord Ordinary’s approach to the award of damages and also challenged his decision to grant absolvitor to the first defender but that ground of appeal was not insisted upon.

Counsel for the reclaimers submitted that the Lord Ordinary had failed to give proper consideration to the evidence when reaching his conclusion that the defenders were at fault. His starting-point was that reversing the vehicle in the hours of darkness was inherently dangerous, and in doing so, he was in error. He had apparently regarded as important fact that the cab of the vehicle was positioned in such a way that it could have given the impression to anyone travelling westwards that it was on its own side of the road and in doing so, he failed to take proper account of the evidence from several witnesses as to the

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lighting of the vehicle. He also erred in suggesting that it would have been possible for some form of advance warning to have been given, or that a smaller vehicle should have been used. The Lord Ordinary had relied on a previous decision of his which he had categorised as being very similar to the instant case, and he was plainly wrong in relying on that decision because there were important distinguishing features between the two cases. The Lord Ordinary had gone plainly wrong and the court should be seeking to get the right result, which was that the accident was not caused by fault of the defenders. In any event The pursuer had been the author of his own misfortune.

Even if his actions were not the sole cause of the accident the pursuer should shoulder a greater degree of responsibility than 40 per cent which had been selected by the Lord Ordinary.

Held (1) in the particular circumstances of the case the Lord Ordinary had been entitled to conclude that the manoeuvre was dangerous and had been entitled to reach the view that the accident had been caused by the fault of the defenders (para.33); (2) that it would seldom have been appropriate to choose a figure for contributory negligence as between two vehicles in a road traffic accident solely by reference to an assessment in another case even if that case had borne points of similarity with the case under consideration and in most such cases there would also have been points of difference and it might be helpful to refer to another case (or cases) by way of yardstick or as a point of reference but it would usually have been necessary for a judge to have stated why he or she had considered that the same award should have been made as in another case and to have given express consideration to the causative potency and blameworthiness of the pursuer’s actions in the instant case (para.40); and (3) that the Lord Ordinary had not set out his reasoning on the point at all and in the circumstances of the instant case had manifestly and to a substantial degree gone wrong and a just and equitable figure to reflect the pursuer’s blameworthiness was 60 per cent (para.41); and reclaiming motion allowed to the extent of quashing the Lord Ordinary’s assessment of 40 per cent and substituting therefor 60 per cent.

Cases referred to:

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Cronie v Messenger, October 2005, unreported Davies v Swan Motor Co (Swansea) Ltd [1949] 2 K.B. 291; [1949] 1 All E.R. 620 Dymond v Pearce [1972] 1 Q.B. 496; [1972] 2 W.L.R. 633; [1972] 1 All E.R. 1142 Henderson v Foxworth Investments Ltd [2014] UKSC 41; (S.C.) 2014 S.C.L.R. 692; 2014 S.C. (U.K.S.C.) 203; 2014 S.L.T. 775 Housen Nikolaiseni [2002] 2 R.C.S. 235 S v S sub nom H S v F S [2015] CSIH 14; 2015 S.C. 513 Kennedy v Cordia (Services) LLP [2016] UKSC 6; 2016 S.C.L.R. 203; 2016 S.C. (U.K.S.C.) 59; 2016 S.L.T. 209 McGraddie v McGraddie, [2013] UKSC 58; (S.C.) 2015 S.C.L.R. 109; 2014 S.C. (U.K.S.C.) 12; 2013 S.L.T. 1212 Porter v Strathclyde Regional Council, 1991 S.L.T. 446 Piglowska v Piglowski [1999] 1 W.L.R. 1360; [1999] 3 All E.R. 632 Thomas v Thomas, 1947 S.C. (H.L.) 45; 1948 S.L.T. 2; 1947 S.L.T. (Notes) 53 Thomson v Kvaerner Govan Ltd [2003] UKHL 45; 2003 S.C.L.R. 765; 2004 S.C. (H.L.) 1; 2004 S.L.T. 24.

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The full circumstances of the case and the arguments of counsel are to be found in the following opinion of the court which was delivered by Lord Menzies on 13 May 2016.

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LORD MENZIES Introduction

[1] This action for damages for personal injuries arises from a road traffic accident which occurred on 27 August 2009. At about 11 pm on that date the pursuer was driving his motorcycle west on the B7076 Gretna to Johnstonebridge Road. His uncle, Alastair Pasco, was driving another motorcycle about 30 feet behind the pursuer and to the right of him. The pursuer was a learner driver; his uncle had held a motorcycle licence for about 20 years, was chairman of a local motor cycle club and was very familiar with the road. At the time of the accident it was dark; the B7076 road, which ran generally east to west with a single lane in each direction, was unlit and was subject to the national speed limit of 60mph. At the time the weather was dry. Both the pursuer and his uncle had been working at the Welcome Break Service Station on the M74 that day, and were returning from work; the pursuer was also familiar with the road.

[2] Nouthill Farm is situated to the south of the B7076 road and adjacent to it; access to the farm is gained by an entrance road which leads off the B7076. Drivers approaching Nouthill Farm from the east and driving in a westerly direction have an unobstructed view of the entrance to the farm, and the roadway in the immediate vicinity of it, for about 320 metres, after a crest in the road.

[3] At about the time that the pursuer and his uncle were approaching Nouthill Farm from the east, the first defender was driving an articulated milk tanker consisting of a cab and trailer; he was working in the course of his employment with the second defenders, who owned the tanker. He had been instructed to carry out the routine collection of milk from Nouthill Farm—an operation which he himself had performed on about 370 occasions, and the same vehicle had been used for milk collections from Nouthill Farm on about 818 occasions in total. In order to gain access to the farm, it was his practice to approach the farm from the west, so travelling in an easterly direction along the B7076. He would slow down or stop just outside the farm and check for any oncoming traffic or traffic approaching from the rear; he would then drive about 50–60 feet beyond the farm entrance, position the lorry in the middle of the road, check again for traffic, and then reverse the articulated lorry into the farm entrance. He was carrying out this manoeuvre when the accident happened. By this time, his headlights were on, as were his hazard warning lights, his working lights and his reversing lights. The cab of the articulated lorry was generally on the eastbound carriageway either just straddling the white line or on the white line, with its headlights shining straight down the road in an easterly direction, and the trailer was situated broadly diagonally across the westbound carriageway, so that all (or substantially all) of the road in each direction was blocked.

[4] At proof the pursuer had no recollection of the circumstances of the accident. His uncle, Mr Pasco, gave evidence to the effect that before he reached the rise to the east of Nouthill Farm he saw the glow of headlights on the opposite carriageway. He was driving with a dipped beam headlight and the pursuer’s headlight was on high beam until he saw the oncoming vehicle, when he dipped his headlight. Towards the top of the rise (and so about 350

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metres from the entrance to Nouthill Farm) Mr Pasco saw a pair of headlights on the opposite lane and a set of small lights on the same vehicle, causing him to think that it was a wagon of some description. He was sure it was on the other carriageway because of its position. He could not tell if it was stationary or moving, and, if moving, in which direction. The cab of the vehicle was facing towards him and the pursuer. It did not give him any cause for concern as he thought it was just another vehicle on the road. As they approached the vehicle it seemed perfectly normal until the pursuer’s headlights showed up the trailer on the road. The pursuer braked, swerved to the left and collided with the last wheel arch on the trailer, causing him to be propelled from his motorcycle. Mr Pasco managed to get round the back of the trailer but was brought off his motorcycle by a high kerb at the entrance to the farm.

[5] As a result of this accident the pursuer sustained serious injuries, including a below-knee left-leg amputation. He raised the present action seeking damages from the first and second defenders jointly and severally. The Lord Ordinary heard evidence at proof over several days in June 2014, and on 30 April 2015 he issued his opinion. He found that the accident was caused partly by the fault of the pursuer and partly by the fault of the defenders, and that the proportion of blame attributable to the pursuer fell to be assessed at 40 per cent. He also made certain findings with regard to the cost of prosthetics, with which this court is not concerned at present. By interlocutor dated 3 June 2015 the Lord Ordinary, inter alia, decerned against the second defenders for payment to the pursuer of £341,356, and assoilzied the first defender from the conclusions of the summons.

[6] Both parties have reclaimed against the Lord Ordinary’s interlocutor dated 3 June 2015. The second defenders challenge the Lord Ordinary’s finding that the accident was caused by fault of the second defenders, and also challenge his finding as to the extent of contributory negligence on the part of the pursuer. The pursuer challenges the Lord Ordinary’s approach to the award of damages, and also challenges the Lord Ordinary’s decision to assoilzie the first defender. It was agreed by both parties that at this stage we should consider only issues of fault, contributory negligence and absolvitor, and that any issues about damages should, if necessary, be considered at a later stage.

We agreed to this procedure, and accordingly in this opinion we deal only with issues of fault, contributory negligence and absolvitor.

The Lord Ordinary’s opinion of 30 April 2015

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[7] The Lord Ordinary set out in summary the evidence before him. He noted that Mr Pasco had stated in evidence that he had never previously seen a tanker perform such a manoeuvre there, and that before the accident he had not seen any hazard warning or reversing lights or headlights flashing on the vehicle. He just considered the vehicle to be in the other carriageway coming towards them. The Lord Ordinary summarised the evidence of the first defender, Mr Grant, to the effect that he had carried out the same manoeuvre on many previous occasions at about the same time of night. The tractor unit of the lorry was facing east in the eastbound lane with its headlights on towards the direction from which the pursuer was travelling. The trailer was angled across the westbound lane and blocking it. The headlights, hazard lights, reversing lights and working lights of the vehicle were illuminated. Mr Grant had checked for oncoming and rear traffic before he began to carry out the manoeuvre into the farm. When the pursuer appeared on his motorcycle a few hundred yards away Mr Grant saw two lights which he thought represented a car. It crossed his mind to pull out of the way by moving forward but he did

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not have the time to do so. It turned out that the lights represented two motorcycles. One of them hit the trailer and a nearby wall and the other went round the rear of the trailer.

[8] The Lord Ordinary found Mr Grant to be an entirely credible and reliable witness and concluded that the accident occurred as described by him in his oral evidence and police statement and that the vehicle was at the time displaying all the lights which he said it was displaying. The only relevant dispute between him and Mr Pasco was about the extent of the lighting on the vehicle. On this point the Lord Ordinary had no hesitation in accepting the evidence of Mr Grant and rejecting that of Mr Pasco. This finding was not challenged before us.

[9] The Lord Ordinary went on to state the following in para.14 of his opinion: “The question then comes to be whether the defenders were to any extent to blame for the accident. The manoeuvre which the vehicle was carrying out in the hours of darkness was by its very nature intrinsically dangerous. It involved the other lane being blocked by the trailer in a diagonal position. I accept that the position of the vehicle shortly before the accident was such that the pursuer and his uncle were misled into thinking that it was either stationary or moving on the other lane and presented no danger to them on their own lane. It is in my view significant that it was not only the pursuer but also his uncle who failed to appreciate that there was an obstruction across their lane and failed to stop in time.”

The Lord Ordinary then went on to refer to a case with which he had to deal in October 2005, namely Cronie v Messenger, which he described as being a strikingly similar case.

[10] The Lord Ordinary went on to consider the submissions for the pursuer and the defenders, and at para.18 of his opinion he gave his reasoning and conclusions about liability as follows: “[18] I am satisfied that in this case the execution of the reversing manoeuvre by the vehicle in the hours of darkness was by its very nature something which created an unnecessary danger to other vehicles using the road, particularly those travelling in a westward direction. The manoeuvre caused the trailer of the vehicle to be positioned diagonally across the westbound lane, completely blocking it. The facts of Cronie v Messenger (in which the accident occurred in January 2001) themselves demonstrate that an accident of the type which did happen is liable to happen when a manoeuvre of this type is carried out in darkness. As Lord Denning MR pointed out in Chisman v Electromation (Export) Ltd and Another [1969] 6 KIR 456, in which a lorry was parked at night on its wrong side of the road, at p. 458: “ ‘It is plain to me, as it was to the judge and must be to everybody, that to put a lorry with its lights on in the middle of the night on the wrong side of the road facing in the wrong direction is plain obvious negligence.’

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“His Lordship added at p.459: “ ‘. . . . where there is an obstruction in the road negligently placed there and then an oncoming vehicle which for some reason or another— carelessness—does not see it or does not take proper avoiding action, or whatever it may be, the negligence of both are equally causes of the accident and the only thing is for the damages to be apportioned between them’.

“In the present case the cab of the vehicle was positioned in such a way that it could have given the impression to anyone travelling westwards that

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it was on its own side of the road, either stationary or moving. There was no evidence that it was essential that this manoeuvre be carried out in hours of darkness, or that the vehicle in question had to be used. It could have been carried out in daylight or by a smaller vehicle which would have been able to execute a normal right turn into the farm road. The blocking of the other lane by the trailer in darkness was avoidable. Even if it was not, it would have been possible for some form of advance warning to have been given to westbound traffic, either by way of a warning sign or someone appointed to provide a form of advance warning. I see no reason not to follow the approach I took in Cronie v Messenger and I therefore hold that the defenders were negligent in carrying out this manoeuvre in darkness. In saying this I must at the same time express my considerable sympathy for Mr Grant, who struck me as a highly responsible man. He was put in a position which was not of his own choosing: he had no say in the choice of vehicle or the time of day at which the manoeuvre had to be executed. I fully accept that, once he had taken up his position with the trailer across the westbound lane there was nothing that he could have done to avoid the accident. I reject the exaggerated claim by counsel for the defenders that a finding of negligence against them would effectively bring road haulage transport to a stop. The fact that the road in Cronie v Messenger was a major road, the A75, is not a valid ground of legal distinction. In both cases the road in question was a dark, unlit road subject to the national speed limit of 60 mph. I do not accept the submission of counsel for the pursuer that in this case the blame attributable to the pursuer should be less than that attributable to the driver of the Ford Galaxy in Cronie v Messenger. I therefore propose to make the same apportionment of fault as I did in that case and find the pursuer 40 per cent to blame for the accident.”

The Lord Ordinary’s note dated 7 October 2015

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[11] The pursuer having raised in his grounds of appeal the issue of the Lord Ordinary having granted decree of absolvitor in favour of the first defender, the Lord Ordinary provided a note explaining why he granted decree of absolvitor against the first defender. He indicated that he could not understand why the action was raised against Mr Grant, as it was of no benefit to the pursuer to raise it against him. Mr Grant was an employee acting in the course of his employment at the material time and his employers were vicariously liable for his acts and omissions. A decree against his employers, which would require to be satisfied by their insurers, was sufficient for the pursuer. He stated that Mr Grant struck him when giving evidence as a generally responsible individual who was simply carrying out the task entrusted to him by his employers. He was 51 years old and had been a driver of heavy goods vehicles since 1984. A decree against him (which he would no doubt not have the means to satisfy) would be likely to have a serious effect on his credit rating.

[12] In the course of the hearing of this reclaiming motion, senior counsel for the second defenders and reclaimers did not ask us to interfere with the Lord Ordinary’s disposal regarding Mr Grant, and expressed the view that it would have no practical effect either for the pursuer or for the second defenders and their insurers. Senior counsel for the pursuer explained that he was not asking this court to recall the Lord Ordinary’s decree of absolvitor in relation to the first defender. In these circumstances we see no reason to consider this matter further, and we express no view about the Lord Ordinary’s disposal in this regard.

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Wagner v Grant (IH)

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Submissions Submissions for the second defenders and reclaimers

[13] Senior counsel for the reclaimers adopted his written note of argument.

He submitted that the Lord Ordinary failed to give proper consideration to the evidence when reaching his conclusion that the defenders were at fault. His starting-point was that reversing the vehicle in the hours of darkness was inherently dangerous; in this respect he fell into error. It is a common fact of modern life that commercial vehicles have to execute awkward manoeuvres at all times of the day and night. Other road users, such as the pursuer, must be alert to this state of affairs and take reasonable care in light of it. If the Lord Ordinary’s reasoning was correct, it would follow that all traffic of whatsoever kind carrying out any form of turning manoeuvre which has the effect of crossing any opposing carriageway must be carrying out an inherently dangerous manoeuvre which should be avoided, and that the provision of lighting or the obvious presence of the vehicle may only result in a greater or lesser finding of contributory negligence. This was simply wrong.

[14] In reaching his conclusion that the execution of the reversing manoeuvre by the vehicle in the hours of darkness was by its very nature something which created an unnecessary danger to other vehicles using the road, the Lord Ordinary appears to have regarded as important the fact that “the cab of the vehicle was positioned in such a way that it could have given the impression to anyone travelling westwards that it was on its own side of the road”. In coming to this view, the Lord Ordinary failed to take proper account of the evidence from several witnesses as to the lighting on the vehicle; the Lord Ordinary accepted Mr Grant’s evidence that at the material time the headlights, side lights, hazard warning lights, working lights and reversing lights were all on.

[15] There was no evidence to entitle the Lord Ordinary to conclude that the operation of collecting milk from this farm should only have been done during the hours of daylight. This was not put to the first defender, and his evidence was that the cows were milked two to three times a day and the milk required to be collected from storage tanks at regular intervals. The Lord Ordinary had inverted the onus of proof in this regard; it was not for the defenders to prove that it was essential that this manoeuvre be carried out in the hours of darkness, but for the pursuer to lead evidence that the task could and should always have been carried out during daylight hours. Similarly, it was for the pursuer to prove that another, smaller, vehicle could and should have been used. Mr Grant gave evidence that taking a smaller rigid vehicle into the farmyard could be unsafe as it might mean reversing out into the main road. PC Hunter, who had personal experience of HGV driving, confirmed that the farmyard was confined, and if a lorry drove forwards into it, then it would have to reverse onto the main road, which would be contrary to the Highway Code. There was no evidence of what other companies did in similar situations, nor of industry practice. Reversing, of itself, may not be relevant to any potential “danger”, as any vehicle turning into the farm would have to block the opposing carriageway for a time while it negotiated the entrance. A proper consideration of the evidence could not have led to the conclusion that a smaller vehicle should have been used.

[16] The Lord Ordinary also erred in suggesting that it would have been possible for some form of advance warning to have been given to westbound traffic, either by way of warning sign or someone appointed to provide a form of advance warning. He accepted the evidence about the lighting system, but

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did not explain why this was not sufficient to provide advance warning. There was no evidence of any industry practice as to the provision of a warning person or banksman, nor that the provision of a warning sign or a banksman would have been any more effective than the extensive lighting on the vehicle.

Requiring employees to walk along an unlit road to provide advance warning carried other obvious risks of injury.

[17] Moreover, the Lord Ordinary failed to take account of material evidence. Both the pursuer and Mr Pasco gave evidence as to what they would have done if they had seen warning lights on the vehicle. The pursuer said that if he saw flashing hazard lights he would expect there to be a problem and he would reduce his speed. If he saw an obstruction across the carriageway he would slow down and stop. Mr Pasco gave evidence that if he had seen the hazard warning lights he would have slowed down and could have brought his motorcycle to a standstill. If the reversing lights on the lorry had been operating he would have seen them from around 150 metres away, in plenty of time to stop. The Lord Ordinary failed to take account of any of this evidence.

[18] The Lord Ordinary was plainly wrong in relying as he did on his earlier decision in Cronie v Messenger. There were important distinguishing features between the two cases. The driver of the lorry in Cronie had been convicted and had accepted liability; in the present case, liability was disputed and indeed the Lord Ordinary assoilzied the first defender. Cronie v Messenger was concerned with a road accident involving an inherently dangerous manoeuvre on a busy major road, namely the A75. The Lord Ordinary was wrong to regard this as not being a valid ground of distinction with the present case.

Moreover, there was no evidence in Cronie v Messenger that the driver of the car would have been able to stop had he seen the lorry; in this regard, too, the present case fell to be distinguished. Cronie v Messenger provided little, if any, assistance.

[19] Properly understood, senior counsel submitted that the evidence pointed inevitably to the cause of the accident being the pursuer’s driving. The Lord Ordinary accepted the evidence that all the lights on both the cab and the trailer of the lorry were illuminated, including hazard warning lights on the cab and along the side of the trailer, and also working lights and reversing lights. On the evidence, the pursuer and his uncle would have had about 18 seconds from the crest of the first hill on the road, and about 13 seconds from the crest of the second hill on the road, in which to see the lights and take appropriate action. Their failure to do so caused the accident. As senior counsel had submitted to the Lord Ordinary, “it’s not a danger because it’s lit up like a Christmas tree. If it was visible from half a mile away, in the mind of the ordinary, reasonable driver, is that a danger? No.”, to which the Lord Ordinary had replied “Well, it was lit up better than a Christmas tree.” In light of the evidence, the Lord Ordinary erred in finding that the accident was caused by the defenders, and went plainly wrong when he found the second defenders at fault.

[20] Senior counsel addressed us on the proper function of appellate courts in the light of the recent decisions of the UK Supreme Court in McGraddie v McGraddie and Henderson v Foxworth Investments Ltd. He adopted the reasoning in three articles on the appellate courts published in 2015 SLT at pp.125, 130 and 138, and also referred to the decision of the Second Division in S v S. He submitted that the law of Scotland, as updated in McGraddie and Henderson, remained fundamentally as stated in Thomas v Thomas. In the present case the Lord Ordinary had gone plainly wrong, and this court should be seeking to “get the right result”. The right result in this case was that the accident was

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not caused by fault of the defenders, and the Lord Ordinary’s interlocutor should be recalled and decree of absolvitor pronounced.

[21] In any event, the pursuer was the author of his own misfortune. The primary cause of the accident was the pursuer’s driving, and even if the court held that the defenders were in some way in breach of duty, the pursuer must fail on the basis of causation: Dymond v Pearce.

[22] Finally, even if the pursuer’s actions were not the sole cause of the accident, senior counsel submitted that the degree of responsibility to be shouldered by the pursuer should be considerably higher than the 40 per cent selected by the Lord Ordinary. No reasoning was provided by the Lord Ordinary to justify his assessment of contributory negligence—he simply stated that he proposed to make the same apportionment of fault as he did in Cronie v Messenger and find the pursuer 40 per cent to blame for the accident.

He gave no independent assessment of the actions of the pursuer as opposed to the car driver in Cronie, nor did he refer to the pursuer’s evidence that he would have been able to control and stop his motorcycle had he seen the lights on the lorry. In all the circumstances, senior counsel submitted that fault should be apportioned by finding the pursuer not less than 80 per cent to blame for the accident.

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Submissions for the pursuer and respondent

[23] Senior counsel for the pursuer adopted his supplementary note of argument and moved us to refuse the reclaiming motion. He submitted that it was important to bear in mind that both the pursuer and his uncle gave evidence that if they had seen the hazard warning lights on the lorry they would have slowed down or come to a stop. They were misled by the headlights of the lorry into thinking that the vehicle was on the other side of the road. No driver would continue driving a motorcycle if he sees hazard warning lights across his carriageway; although the Lord Ordinary held that all the lights on the lorry, including the hazard warning lights on the trailer, were on, he did not find that the pursuer or his uncle actually saw them. Accordingly, although advance warning by lighting was not wholly absent, the Lord Ordinary must have taken the view that it was not sufficient to warn of the hazard created.

The pursuer had pled an esto case that, if the hazard warning lights and lights along the side of the trailer were lit, they were not visible to traffic travelling west until it was too late to warn that the trailer was blocking the westbound lane. The risk only arose from articulated lorries carrying out this reversing manoeuvre—for rigid lorries, the headlights of the lorry would not be pointing straight down the road, and oncoming traffic would not be misled into the belief that the lorry was on its own side of the road. The second defenders accepted (in ans.7) that a rigid lorry could have been used for this operation, and indeed that, for operational reasons, after the accident they decided to allocate a rigid lorry to collect milk from Nouthill Farm.

[24] Senior counsel submitted that the manoeuvre which was being carried out at the time of the accident was intrinsically dangerous because it involved an articulated tractor unit and tanker trailer in the hours of darkness, on an unlit B road in a rural location subject to a 60mph speed limit reversing into a dark and unlit farm driveway, in consequence of which the combined vehicle blocked the road on both sides, with the lorry cab located in the eastbound lane while its headlights were pointed in the direction of traffic travelling west.

[25] This court should exercise caution in reversing the Lord Ordinary’s evaluation of the facts. We should not give way to the temptation of retrying the case on the printed evidence. In addition to referring us to McGraddie v

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McGraddie and Henderson v Foxworth Investments Ltd, senior counsel referred us to the observations of Lord Hope of Craighead in Thomson v Kvaerner Govan Ltd, particularly at paras 17 and 18, and of Lord Hoffmann in Piglowska v Piglowski, particularly at p.1372. In the present case, it was clear that the Lord Ordinary found it to be a straightforward road traffic case, and did not consider it necessary to set down every fact and finding. Senior counsel also referred us to the Canadian case of Housen v Nikolaisen and to the recent judgment of the UK Supreme Court in Kennedy v Cordia (Services) LLP, particularly at paras 108–114.

[26] The burden on the reclaimers was, senior counsel submitted, significant, it was for them to demonstrate an error that is obvious and which leads to the conclusion that the Lord Ordinary was manifestly or plainly wrong. The reclaimers had failed to discharge this burden; the decision of the Lord Ordinary was one that a reasonable judge could have reached on the evidence before him. Both in regard to the finding of fault on the part of the defenders, and in regard to assessment of contributory negligence, it cannot be said that the Lord Ordinary had gone plainly wrong. The reclaiming motion should accordingly be refused.

Reply for the reclaimers

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[27] Mr Hanretty repeated that on the basis of the evidence accepted by the Lord Ordinary it cannot be said that there was any inherent danger in the manoeuvre which the first defender was performing, and that the Lord Ordinary had gone plainly wrong. He submitted that the case of Kennedy v Cordia (Services) LLP was of no assistance in the present case. It was concerned with duties owed by an employer to an employee; although there were observations about the common law, the case is of no assistance in relation to a road traffic accident such as is the subject of the present case.

Discussion and decision

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[28] The defenders and reclaimers complain about the lack of reasoned justification for the Lord Ordinary’s decision that the execution of the reversing manoeuvre by this articulated lorry in the hours of darkness was by its very nature something which created an unnecessary danger to other vehicles using the road, particularly those travelling in a westward direction. We accept that his reasoning was perhaps not as full as it might have been, but the Lord Ordinary clearly regarded this as a relatively straightforward road traffic accident which did not require him to set out his reasons, or any underlying jurisprudence, in great detail. In the circumstances of this case we consider that he gave sufficient detail to enable the basis for his decision to be understood reasonably clearly.

[29] The basis for his conclusion is to be found in the opening sentences of para.14 of his opinion, which we have set out at para.9 above. The key to the Lord Ordinary’s reasoning is that the pursuer and his uncle were misled into thinking that the articulated lorry was in the other lane and presented no danger to them on their own lane. The pursuer’s uncle gave clear evidence that he saw a pair of headlights on the opposite carriageway with a set of small lights above, that he knew it was a wagon of some description, that it was facing towards them, he was very sure that it was on the other carriageway and not on his own, and it did not give him any great concerns because it was just another vehicle on the road. It was not until the pursuer’s headlights showed up the trailer across the road that he perceived the danger.

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[30] The Lord Ordinary returned to the point about the pursuer and his uncle being misled at para.18 of his opinion, where he observed that: “the cab of the vehicle was positioned in such a way that it could have given the impression to anyone travelling westwards that it was on its own side of the road, either stationary or moving”.

The feature which caused the pursuer and his uncle to be misled was the fact that the operation was being carried out by an articulated lorry, not a rigid lorry, with the consequence that although the trailer unit was diagonally across the westbound carriageway and blocking it, the headlights on the cab unit were still directed down the eastbound carriageway in a broadly easterly direction, causing the pursuer and his uncle to believe that the vehicle was on its own carriageway and causing no danger to them. It was accepted by the defenders that a rigid vehicle could have been used to collect milk from Nouthill Farm—indeed, the defenders aver that after the accident, for operational reasons, they decided to allocate a rigid lorry to this task as the larger articulated lorry would not be fully utilised.

[31] On the uncontradicted evidence of the first defender, it would still be appropriate to reverse a rigid lorry into the entrance of Nouthill Farm, rather than to drive it forward into the farmyard, because it was difficult even for a rigid lorry to turn in the rather tight space of the farmyard, and any obstruction would mean that the lorry would have to be reversed out into the road, which would not be safe. However, the manoeuvre of reversing a rigid lorry into the farm entrance would not be likely to mislead oncoming traffic approaching from the east into believing that the lorry was entirely on the opposite carriageway, because the headlights of a rigid lorry would not be directed down the eastbound carriageway: as the lorry performed its reverse turn and began to block the westbound carriageway, its headlights would turn through an arc to the north. The risk of confusion to oncoming drivers would be reduced or eliminated. It was this risk which was central to the Lord Ordinary’s conclusion about fault.

[32] We have considered all of the well-known authorities about the function of an appellate court to which we were referred, including Thomas v Thomas; Housen v Nikolaisen; Thomson v Kvaerner Govan; Piglowska v Piglowski; McGraddie v McGraddie; Henderson v Foxworth Investments Ltd; and S v S, as well as the three learned articles on the function of an appellate court in 2015 SLT. We are content to follow the summary of the guidance given by Lord Justice Clerk Carloway (as he then was) in the last two paragraphs of S v S. We are satisfied that there is no basis to interfere with the Lord Ordinary’s decision that the second defenders were at fault, in the absence of any error of the kind described in Thomas v Thomas. We do not consider that it can be said that the Lord Ordinary was “plainly wrong”.

[33] We agree with the formulation of why this manoeuvre was intrinsically dangerous which was given by senior counsel for the pursuer and respondent and which is set out at para.24 above. We emphasise that it was because the lorry was articulated and so its headlights were pointing in an easterly direction, in the direction of oncoming traffic, whilst the tanker trailer was blocking the oncoming carriageway, that the operation was dangerous. We do not suggest that all manoeuvres involving the reversing of articulated lorries are likely to be inherently dangerous—each case must depend on its own facts and circumstances. However, we are satisfied that in the particular circumstances of this case the Lord Ordinary was entitled to conclude that the manoeuvre was dangerous, and was entitled to reach the view that the accident was caused

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by fault of the defenders. We express no views about the suggestion that banksmen or other forms of advance warning might have been provided.

[34] Although both sides referred us to Kennedy v Cordia (Services) LLP, we did not find this to be of assistance to us. That case was concerned with the duties of care owed by an employer to an employee. Although the UK Supreme Court discussed common law duties of care, and the duties to carry out risk assessments and provide adequate equipment to reduce the risk of injuries, these discussions were in the context of employers’ duties of care towards employees. They do not assist us in considering the issues which have arisen from the road traffic accident in the present case.

[35] For these reasons, we are unable to agree with the submissions for the defenders and reclaimers that the Lord Ordinary erred in finding the accident to have been caused by fault of the defenders. To that extent, therefore, we shall refuse the reclaiming motion.

[36] However, this leaves the issue of contributory negligence. The Lord Ordinary addressed this briefly at para.14 and again in the last two sentences of para.18 of his opinion. He stated that he did not accept the submission of counsel for the pursuer that in this case the blame attributable to the pursuer should be less than that attributable to the driver of the Ford Galaxy in Cronie v Messenger, and he therefore proposed to make the same apportionment of fault as he did in that case, namely to find the pursuer 40 per cent to blame for the accident. He does not appear to have considered whether the blame attributable to the pursuer should be more than that attributable to the driver of the Ford Galaxy in Cronie v Messenger, nor did he carry out any assessment of the quality of the pursuer’s driving or the particular aspects of his fault in this case. He appears to have simply adopted what he did by way of apportionment of damages in terms of s.3(2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 in that case, and applied this to the exercise which he carried out in terms of s.1(1) of the Law Reform (Contributory Negligence) Act 1945 in the present case. He gives no further justification or reasoning for his selection of 40 per cent as the pursuer’s share in the responsibility for the accident.

[37] There are no hard and fast rules as to how a court should assess a pursuer’s share in the responsibility of damage—it must apply a commonsense approach to the task, and assess the causative potency and the blameworthiness of the pursuer’s actions—Davies v Swan Motor Co (Swansea) Ltd, p.326. We are mindful of the observations of the Second Division in Porter v Strathclyde Regional Council 1991 SLT 446 at p.449: “It has been laid down in McCusker v Saveheat Cavity Wall Insulation Ltd, [1987 S.L.T. 24], and in MacIntosh v National Coal Board, [1988 S.L.T. 348] that the Inner House will not interfere with the Lord Ordinary’s apportionment of negligence except in exceptional circumstances which must demonstrate that ‘he has manifestly and to a substantial degree gone wrong’. Even if the Inner House would have expected a different apportionment, it will not interfere.”

[38] However, in the present case the Lord Ordinary gives no indication that he has carried out any assessment of the causative potency or the blameworthiness of the pursuer’s actions. If he has done so, he gives no explanation for reaching the figure of 40 per cent, except that this was the figure which he adopted in Cronie v Messenger. There were material factual differences between that case and the present case. The pursuer in that case was a passenger in a car being driven by the second defender, which was involved in a road accident with an articulated lorry outside a coal yard on a

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major road, the A75, at night. Not surprisingly, the configuration of the road was not exactly the same as in the present case—in that case there was a shallow bend about 240 metres away from the accident site, and a straight stretch of road about 180 metres long beyond the bend and leading up to the lorry.

Liability as between the first defender (the driver of the lorry) and the pursuer was not in issue, and as a result of that accident the first defender had already been convicted of a contravention of s.3 of the Road Traffic Act 1988 by the unanimous verdict of a jury, fined £1,000, and disqualified from driving for six months. The second defender made a remark to one of his passengers about the lights up ahead shortly before the accident, from which the Lord Ordinary inferred that he noticed something unusual about the lights up ahead.

[39] By contrast, in the present case the accident occurred on a minor road.

The pursuer would have taken about 18 seconds to drive from the crest of the first hill on the road, from which the lighted lorry could be seen, and about 13 seconds from the second crest on the road, to the point of impact. The distance between the second crest and the point of impact was agreed to be 320 metres. The Lord Ordinary found that all the lights (headlights, side lights, hazard warning lights, working lights and reversing lights) on the cab and on the tanker trailer were on at the time, and indeed observed himself during submissions that it was lit up “better than a Christmas tree”. Liability on the part of the first and second defenders was not admitted, and the first defender was not convicted of any road traffic offence as a result of this accident.

[40] We consider that it will seldom be appropriate to choose a figure for contributory negligence as between two vehicles in a road traffic accident solely by reference to an assessment in another case, even if that case bears points of similarity with the case under consideration. In most such cases there will also be points of difference; it may be helpful to refer to another case (or cases) by way of yardstick or as a point of reference, but it will usually be necessary for a judge to state why he or she considers that the same award should be made as in another case, and to give express consideration to the causative potency and blameworthiness of the pursuer’s actions in the instant case.

[41] In the present case, the Lord Ordinary has not set out his reasoning on the point at all, and in all the circumstances of this case we consider that he has manifestly and to a substantial degree gone wrong. Despite the misleading effect of the articulated lorry’s headlights, we consider that the degree of blame attributable to the pursuer in failing to keep a proper lookout when the tanker trailer was lit up “better than a Christmas tree” and the pursuer had between 18 and 13 seconds to see it and slow down or stop must be significantly greater than 40 per cent. We consider that a just and equitable figure to reflect the pursuer’s blameworthiness is 60 per cent. We shall accordingly allow the reclaiming motion to the extent of quashing the Lord Ordinary’s assessment of 40 per cent contributory negligence, and substituting therefor 60 per cent.

[42] How this will affect the sum awarded in terms of the interlocutor dated 3 June 2015 may depend on whether the pursuer wishes to insist on his reclaiming motion regarding the Lord Ordinary’s approach to the cost of prosthetics. We shall accordingly have this matter put out by order in about four weeks from the date of this opinion, to enable parties to address us as to further procedure.

For the pursuer and respondent: Clarke QC, Love, instructed by Thompsons, Solicitors, Edinburgh.

For the defenders and reclaimers: Hanretty QC, Galbraith, instructed by DAC Beachcroft (Scotland) LLP, Solicitors, Edinburgh.

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A COURT OF SESSION

13 May 2016

Inner House (Extra Division) Lady Smith, Lord Brodie, and Lady Clark of Calton B

STEWART WELLS HILL ROBERT THOMSON HILL

Pursuers (Respondents)

against STEWART MILNE GROUP LTD GLADEDALE (NORTHERN) LTD (FORMERLY BETT LTD)

C

First Defender (Respondent) Second Defender (Appellant)

Contract—Construction of contract—Sewage works—“Completed and commissioned”—Works completed and operating but not certified

by Scottish Water—Whether works “completed and commissioned” Process—Minute of amendment—Minute increasing sum sued for allowed after conclusion of proof—Whether amendment should be allowed

D

E

F

G

The parties entered into a contract which was registered in the Books of Council and Session concerning the development by the first defender (SMG) and the second defender (Bett) of subjects in Wishaw of which they were to become proprietors for residential purposes and of the development by the pursuers (the Hill Family) of adjacent subjects of which they were the proprietors also for residential purposes and, in particular, the building there of no more than 40 two-storey residential units. The agreement provided (1) that SMG and Bett would install sewage and surface/water drainage systems on the MTS site; (2) that the pursuers would be entitled to connect the Hill Family site to these systems at no cost to them; and (3) that SMG and Bett would use all reasonable endeavours to ensure that the systems would be completed and commissioned by 28 March 2008 (the longstop date) but in the event that they were not, the pursuers would be entitled to receive payment from SMG and Bett of the penalty of £5,000 per month until the systems were completed and commissioned.

In the event the systems were not completed by the longstop date and accordingly payments were made by the defenders up to and including December 2008. On 13 February 2009 solicitors acting for the defenders wrote to the solicitors acting for the pursuers advising that the defenders would no longer make payments because the sewage system was installed and connected to the public system and had the requisite capacity and was for all practical purposes complete and operational. The pursuers did not accept that the systems had been “completed and commissioned” in terms of the agreement and they raised an action in the sheriff court craving payment at the rate of £5,000 per month from the end of December 2008. In due course, after proof, the sheriff granted decree for £345,000.After the proof was concluded and while the action was at avizandum, on the opposed motion of the pursuers the sheriff had allowed the sum sued for to be amended from £265,000 to £345,000 to take into account the fact that time had passed since the action had been raised and further monthly instalments of £5,000 had become due.

The defenders appealed to the Court of Session on the following grounds: (1) that having regard to the sheriff’s findings of primary fact, she had erred 92

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in law in holding that the defenders had not “completed and commissioned” the sewage and surface/water systems at the MTS site by December 2008; and (2) in any event she had erred in law in allowing, in terms of the interlocutor of 18 November 2014, the pursuers to amend their pleadings by increasing the sum sued for from £265,000 to £345,000. In her findings in fact the sheriff had found that the sewage works had been completed and were operational and connected to the public network and in use by the houses on the site by December 2008. However she also found that Scottish Water had not issued completion certificates for the works and that seven planning conditions for the site had not been fulfilled. She also found that the defenders had not provided written notice to the pursuers in terms of the minute of agreement that the works had been fully completed to the satisfaction of all relevant statutory authorities and that the systems did not comply in all respects with the requirements of the planning authority or the requirements of Scottish Water.

Counsel for the defenders and appellants moved the court to grant absolvitor or alternatively to recall the interlocutor of the sheriff and substitute £265,000 for £345,000 as the sum payable by the defenders to the respondents. The sheriff had demonstrably failed to have had regard to, or had misunderstood, the relevant evidence and accordingly her findings in fact should be varied so as to insert a finding that the drainage works were considered sufficiently satisfactory to Scottish Water to allow them to allow the houses to be connected and for them to charge water charges. New findings in fact should be added including one that there was no obligation on a developer to apply for a completion certificate and no certificate was required to enable the agreement of Scottish Water that a system could be and remain connected to the public sewer.

The central issue in the appeal was what parties should be taken as having intended when they contracted that the systems should be “completed and commissioned” if the defenders were not to incur liability to make payment.

That phrase was properly to be construed as requiring the defenders to have completed the construction of the sewage works and for it to have become operational and capable of accommodating the connection of systems serving up to 40 units on the pursuer’s site. The defenders submitted that they had “completed and commissioned” the sewage work by December 2008. Even if the construction proposed by the respondents was tenable the proposed construction by the defenders was more commercially sensible and should be preferred. In allowing the amendment the sheriff had exercised her discretion unreasonably. The evidence had concluded before the amendment was allowed and no notice that the extent or approval of systems in the period after May 2013 was in issue and the defenders had therefore made no attempt to investigate the position or leading evidence in respect of any later period and had been prejudiced.

Counsel for the respondents argued that the finding of the sheriff that the systems were incomplete as at 23 July 2012 was supported by the evidence in the case. The sheriff had correctly construed the agreement. The word “commissioned” meant being compliant in all respects with the requirements of North Lanarkshire Council and Scottish Water. The word “completed” meant fully reconstructed in every respect which comprehended having received all requisite approvals. The overall purpose of the clause was to relieve the pursuers from having to deal with statutory authorities in relation to the connections which they were entitled to make with the systems and they were entitled to get a connection to the systems which met all the statutory authorities’ requirements. The amendment was a matter for the discretion of the sheriff and prejudice referred to was notional only.

Held (1) that construing any particular contractual provision required examination of the other provisions and, as a matter of generality, it would have been wrong to have read a particular provision in isolation and the sheriff

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was not correct to conclude that “completed” required to have been given the same meaning in cl.2.13 as in cl.2.9; cl.2.9 appeared to be free-standing and in any event the phrase “fully completed to the satisfaction” was different from “completed” or “completed and commissioned” and the proposed construction of the clause by the appellants was more consistent with the natural and ordinary meaning of the critical words than the construction proposed by the respondent and adopted by the sheriff and on the findings in fact as altered the systems had been “completed and commissioned” in terms of the longstop clause no later than the end of December 2008 (paras 33, 35 and 39); (2) (per Lady Clark of Calton) that the parties had clearly reached an agreement with declared purposes focusing on the practical outcome of completed and commissioned systems, which complied with the various planning and statutory requirements for such systems but the agreement stated nothing about the issue, which was entirely separate, as to whether the systems were to remain in private ownership or by the statutory vesting process be transferred into public ownership, with consequential different liabilities and there was no statutory obligation on a developer to go through the compliance procedures to bring a system up to a standard which would qualify the system to vest in terms of s.16 of the Sewage (Scotland) Act 1968 and it was impossible to read into any part of the agreement the implied terms advanced by counsel for the pursuers (para.48); and (3) that the way in which the sheriff had exercised her discretion was sufficiently unreasonable as to permit the court to recall her decision and the defenders were entitled to say that they had been deprived of the opportunity of investigating what evidence might have been available to them in relation to the period after 28 May 2013 and then leading that evidence and that was prejudice which was both substantial and unfair (para.42); and findings in fact altered, appeal allowed and decree of absolvitor granted.

Cases referred to: Arnold v Britton [2015] UKSC 36; [2015] A.C. 1619; [2015] 2 W.L.R. 1593; [2016] 1 All E.R. 1 Grove Investments Ltd v Cape Building Products Ltd [2014] CSIH 43; 2014 Hous. L.R. 35; 2014 G.W.D. 17–327 Rainy Sky SA v Kookmin Bank [2011] UKSC 50; [2011] 1 W.L.R. 2900; [2012] 1 All E.R. 1137 L Schuler AG v Wickman Machine Tools Sales Ltd [1974] AC 235; [1973] 2 W.L.R. 683; [1973] 2 All E.R. 39 Sigma Finance Corporation, In re [2009] UKSC 2; [2010] 1 All E.R. 571 Taylor v Secretary of State for Scotland, 2000 S.C. (H.L.) 139; 2000 S.L.T. 708.

On 13 May the following opinions were delivered. The full circumstances of the case and the arguments of counsel are to be found in the opinion of Lord Brodie.

LADY SMITH [1] I have read and considered the opinion of Lord Brodie. I agree with its terms in their entirety and have nothing to add.

LORD BRODIE [2] This is an appeal at the instance of the defenders from an interlocutor of the sheriff at Hamilton dated 10 July 2015. The interlocutor was pronounced after proof. It ordered payment by the first and second defenders jointly and severally to the pursuers of the sum of £345,000. The appeal is also directed at the sheriff’s interlocutor of 18 November 2014 in terms of which she allowed the pursuers to amend by increasing the sum sued for from £265,000

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to £345,000. The motion to amend had been made on behalf of the pursuers during a hearing of submissions following the closing of the proof. The motion had been opposed on behalf of the defenders.

[3] The claim for payment which the sheriff upheld in full arose from an obligation constituted by an agreement among the parties executed on 30 and 31 January and 1 February 2007 and registered in the Books of Council and Session on 28 February 2007.

[4] The agreement contemplated the development by the first defender (referred to therein as SMG) and the second defender (Bett) of subjects of which they were to become proprietors at Morningside, Wishaw (the MTS site) for residential purposes and the development by the pursuers (the Hill Family) of adjacent subjects of which they were proprietors (the Hill family site), also for residential purposes and, in particular, the building there of no more than 40 two-storey residential units. The agreement is set out in fuller terms below but in brief it provided: (1) that SMG and Bett would install sewage and surface/storm water drainage systems on the MTS site; (2) that the pursuers would be entitled to connect the Hill family site to these systems at no cost to them; and (3) that SMG and Bett would use all reasonable endeavours to ensure that the systems would be completed and commissioned by 28 March 2008 (the longstop date) but in the event that they were not, the pursuers would be entitled to receive payment from SMG and Bett of a penalty of £5,000 per month until the systems were completed and commissioned.

[5] The defenders accepted that the sewage and surface/storm water systems were not completed by the longstop date of 28 March 2008 and accordingly made payments to the pursuers at the rate of £5,000 per month up to and including December 2008. On 13 February 2009 solicitors acting for the defenders wrote to the solicitors acting for the pursuers advising that the defenders would no longer make payments because the sewage system was installed and connected to the public system and had the requisite capacity and the surface/storm water system was for all practical purposes complete and operational with the requisite capacity. Since then the defenders have maintained that position. The pursuers did not accept that the systems had been “completed and commissioned” in terms of the agreement and in 2009 they raised this action craving payment at the rate of £5,000 per month from the end of December 2008.

[6] Subsequent procedure included a debate before the sheriff as to whether the clause imposing the obligation to make payment of £5,000 per month until the systems were completed and commissioned (clause 2.1 otherwise the longstop clause) constituted an unenforceable penalty.The sheriff’s interlocutor allowing proof was recalled on appeal to the sheriff principal but restored after further appeal to this court, as appears from the opinion published as [2011] CSIH 50. Proof was heard by the sheriff on 23 April 2014 and at subsequent diets. It was concluded on 21 August 2014. On 18 November 2014, on the opposed motion of the pursuers, the sheriff allowed the sum sued for to be amended at the bar from £265,000 to £345,000. On 22 January 2015, having heard parties’ submissions, the sheriff made avizandum. On 10 July 2015 she pronounced the interlocutor which is now appealed directly to this court.

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The agreement

[7] The agreement provided, inter alia, as follows (whereas in the original text the 14 paragraphs of cl.2 are not denominated in any way I have designated them from 2.1–2.14 in order to allow the paragraphs of the clause to be identified):

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“ ‘MTS Site’ means ALL and WHOLE that plot or area of ground at Morningside, Wishaw registered in the Land Register of Scotland under Title Number LAN 176295.

‘Hill Family Site’ means ALL and WHOLE the subjects registered in the Land Register of Scotland under Title Numbers LAN 182908 LAN 39029 LAN 179727 and LAN 179720.

‘MTS’ means MTS Residential (Scotland) Limited incorporated under the Companies Acts and having their Registered Office at 122 Dundyvan Road, Coatbridge.

‘Installation date’ means the date upon which the sewerage system and surface/storm water system have both been full commissioned and notice of same has been given in writing by Bett and/or SMG to the Hill family. ...

2.1 Considering that MTS are the owners of the MTS Site and have concluded missives with Bett and SMG for the sale of the said site and that Bett and SMG are to develop their respective parts of the MTS Development Site for residential purposes.

2.2 Further considering that the Hill Family are the heritable proprietors of the Hill Family Site and intend to develop the Hill Family Site for residential purposes.

2.3 Further considering that to facilitate the development of the MTS Site, Bett and SMG are to install a sewage system which will connect the MTS site, with the public sewage system in Newmains by way of a pipe, the line of which is shown coloured red on the plan number 1 annexed and executed as relative hereto.

2.4 Further considering that it has been agreed that to facilitate the development of the Hill Family Site, the Hill Family will be entitled to connect to the said sewage system at no cost to them.

2.5 Bett and SMG confirm that the said sewerage system will comply in all respects with the requirements of North Lanarkshire Council as planning authority, Scottish Water and any other interested statutory authority, that the said sewerage system will have the capacity as at the date of installation of the said systems to serve the development being not more than 40, two-storey residential units to be erected by the Hill Family on the Hill Family site and in the event that any alteration, upgrading or improvement of the said sewerage system as proposed is required in order to provide said capacity as at the date of installation of the systems, all costs incurred in that regard will be the sole responsibility of Bett and SMG and the Hill Family shall have no responsibility whatsoever for any such costs incurred.

2.6 Further considering that to facilitate the development of the MTS Site, Bett and SMG will be installing a surface/storm water drainage system in their respective parts to the MTS Site.

2.7 Further considering that to facilitate the development of the Hill Family Site, the Hill Family will be entitled to connect to the said surface/ storm water system at no cost to them.

2.8 Bett and SMG confirm that the said surface/storm water system will comply in all respects with the requirements of North Lanarkshire Council as planning authority, Scottish Water and any other interested statutory authority that the said surface/storm system will have the capacity as at the date of installation of the systems to serve the development being no more than 40, two-storey residential units to be erected by the Hill Family on the Hill Family Site and in the event that any alteration, upgrading or improvement of the said surface/storm water system as proposed is required in order to provide said capacity as at the date of installation of the systems, all costs incurred in that regard will be the sole responsibility of Bett and SMG and the Hill Family shall have no responsibility whatsoever for any such costs incurred.

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2.9 Bett and SMG shall provide written notice to the Hill Family that both the sewerage and surface/storm water drainage systems have been fully completed to the satisfaction of all relevant statutory authorities within 21 days of the date of completion as aforesaid.

2.10 Bett and SMG have agreed that they shall, within two calendar months and at their cost, if required by North Lanarkshire Council, or the Hill Family, amend the existing planning consent, reference S/04/02128/ REM dated 21 December 2005 to accommodate the enlargement of the SUDS pond and variation of existing finished floor levels, if this is required to facilitate the Hill Family’s existing planning consent reference S/04/01837/ FUL approved 22 December 2005 but only where this is necessary as has been identified within the Morningside Development Risk Assessment completed by WA Fairhurst dated September, 2004 and the Flood Risk Assessment Report completed by W A Fairhurst dated March, 2006.

2.11 Bett and SMG shall, at their cost, if required by North Lanarkshire Council, Scottish Water or any other interested statutory authority, carry out the necessary works to enlarge or amend the SUDS pond. Declaring that in the event that the SUDS pond requires to be increased or amended the Hill Family are obliged to convey the additional ground required to accommodate the increased or amended SUDS pond, provided said ground falls within title number LAN 39029, and within the area shown hatched in orange on the plan number 2 annexed and executed as relative hereto, to Bett and SMG for no consideration and for no cost.

2.12 Bett and SMG confirm that the location of the connection points which the Hill Family shall use to connect into the four [sic] and storm drainage systems are shown as two manholes shown circled in red in a plan prepared by Stewart McTaggart drawing number SM764 number 3000 Rev M sheet 1 of 3 a copy of which is annexed and signed as relative hereto.

2.13 Bett and SMG undertake that they will use all reasonable endeavours to ensure that both the sewerage and surface/storm water systems will be completed and commissioned by 28 March 2008 (‘the longstop date’); but declaring that the longstop date shall be extended to take account of any delays caused to the said programme as a result of force majeure. In the event that Bett and SMG have not completed the said works by the longstop date, as such date may be extended as aforesaid, then the Hill Family shall be entitled to receive payment from Bett and SMG, jointly and severally, of a penalty of five thousand pounds (£5,000) per calendar month until the said systems are completed and commissioned.

2.14 The Hill Family will be responsible for any costs incurred in connection with the Hill Family Site being connected to the sewage system and surface/storm water system.”

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The sheriff’s findings in fact

[8] The sheriff found, inter alia, the following facts proved: “9. The defenders developed adjacent parts of the MTS site. They jointly undertook construction of the sewage and surface/storm water drainage systems for the whole site. Construction of the systems began in 2007. It involved the installation of combined gravity sewers for sewage and surface water drainage; augmentation storage works to the existing public sewage network to accommodate additional flow from the MTS site; two pumping stations, a lower and upper station, to increase velocity and transfer sewage from the MTS site to the existing gravity fed public networks; and a Sustainable Urban Drainage pond (SUDS pond) to treat and attenuate surface water flow off from the MTS site with discharge to the Auchter Water. The gravity sewers, augmentation works, pumping stations and SUDS pond were all integral parts of the sewage and surface/storm water systems.

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10. The sewage and surface/storm water systems were not completed by the longstop date of 28 March 2008. The pursuers became entitled to receive payment from the defenders of the sum of £5,000 per month from that date under the longstop clause in their minute of agreement. The defenders made these payments between March and December 2008. On 13 February 2009 the defenders’ solicitor wrote to the pursuers’ solicitors advising they would no longer meet these payments on the grounds the sewage system was installed and connected to the public system and had the requisite capacity and the surface/storm water drainage system was for all practical purposes complete and operational with the requisite capacity (6/1/25).

11. By December 2008 the defenders had constructed sewage and surface/storm water systems on the MTS site which were operational and connected to the public network operated by Scottish Water. Houses built on the site were connected to these systems.

12. By December 2008 the defenders had constructed and obtained local authority habitation certificates from North Lanarkshire Council for houses built on the MTS site. They subsequently obtained habitation certificates from North Lanarkshire Council in respect of all the houses built on the MTS site.

13. Between April 2009 and March 2012 Scottish Water made reasonable cost contribution totalling £160,846.50 in respect of 108 houses at the MTS site.

14. On 12 July 2010 Scottish Water issued a completion certificate in respect of the augmentation storage works to the first defender. The completion certificate is dated 30 November 2008. A covering letter from Scottish Water confirms the backdating of the certificate to 30 November 2008 and the commencement of the 12-month defect liability period from that date (6/1/23). The augmentation storage works are capable of vesting in Scottish Water.

15. On 7 September 2009 Scottish Water issued a completion certificate in respect of the gravity sewers to the second defender. A covering letter from Scottish Water confirms commencement of the 12-month defect liability period from 7 September 2009 (6/1/7). The gravity sewers are capable of vesting in Scottish Water.

16. Scottish Water have not issued a completion certificate in respect of the pumping stations. As at 23 July 2012 Scottish Water had inspected the pumping stations and issued a snagging list; remedial works required to be carried out to the pumping stations (5/4/2). This remained the situation at proof.

17. Scottish Water have not issued a completion certificate in respect of the SUDS pond. The process for this had not commenced as at 23 July 2012 (5/4/2). This remained the situation at proof. The defenders did not obtain technical approval from ScottishWater for the design and construction of the SUDS pond. It has been constructed to 40 per cent of its design capacity.

18. As at 23 July 2012 the surface/storm water drainage system at the MTS site was private and incomplete (5/4/2). This remained the situation at proof.

19. The planning approvals for the MTS site require the defenders to provide to North Lanarkshire Council as planning authority written confirmation from Scottish Water that Scottish Water’s requirements in respect of site drainage to serve the development have been met (5/4/4).

The defenders have not provided this written confirmation to North Lanarkshire Council as planning authority.

20. The defenders have not fulfilled condition 23 of the planning conditions for the MTS site which is in the following terms: ‘23. That before any house within the site is occupied the SUDS pond shall be completed to the satisfaction of the planning authority and the connection from the site to the public sewer shall be completed’ (5/4/6).

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21. The defenders have not provided written notice to the pursuers in terms of the minute of agreement that sewage and surface/storm water drainage systems have been fully completed to the satisfaction of all relevant statutory authorities.

22. By December 2008 the sewage and surface/storm water systems installed by the defenders at the MTS site did not comply in all respects with the requirements of North Lanarkshire Council as planning authority and with the requirements of Scottish Water. This remained the situation at the close of the evidence in this case on 17 August 2014.”

A

B

Grounds of appeal

[9] Put shortly, the defenders’ grounds of appeal were: (1) that having regard to the sheriff’s findings of primary fact, she had erred in law in holding that the defenders had not “completed and commissioned” sewage and surface/ storm water systems at the MTS site by December 2008; and (2) in any event she had erred in law in allowing, in terms of interlocutor of 18 November 2014, the pursuers to amend their pleadings by increasing the sum sued for from £265,000 to £345,000.

C Submissions Defenders and appellants

[10] Mr McIlvride QC appeared on behalf of the defenders. His primary motion was for the court to recall the interlocutor of the sheriff of 10 July 2015, repel the pleas-in-law for the pursuers, sustain the second and third pleas-in-law for the defenders and, accordingly, grant decree of absolvitor. His alternative motion, in the event that the court was not with him in relation to his primary motion, was for the court to recall the interlocutor of the sheriff of 18 November 2014 and, in consequence of that, recall the interlocutor of 10 July 2015 to the extent of substituting £265,000 for £345,000 as the sum payable by the defenders to the respondents.

[11] Mr McIlvride adopted the defenders’ note of argument. There it was submitted that the sheriff had demonstrably failed to have had regard to, or had misunderstood, the relevant evidence and that accordingly her findings in fact should be varied to the following extent: (i) insert at the beginning of finding 13: “The operation of the sewage and drainage systems installed by the defenders at the MTS site was considered sufficiently satisfactory to Scottish Water for Scottish Water to levy water charges on the owners of the properties occupied on the site” and in the existing finding, after “contributions”, insert “amounting to £160,846.50 to the defenders” and add at the end “It is Scottish Water’s policy to make reasonable cost reimbursements to developers only when the work required to accommodate a new connection is complete and the new infrastructure is able to generate income for Scottish Water.” (ii) insert a new finding 14 as follows (renumbering the subsequent findings accordingly): “The operation of the sewage and drainage systems installed by the defenders at the MTS site, including a SUDS pond and pumping stations, was considered sufficiently satisfactory to Scottish Water to warrant the continued connection of those systems to the public sewer since December 2008.” (iii) in finding 19 (formerly 18), delete “and incomplete”.

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(iv) delete finding 22 (formerly 21). (v) in finding 22 delete “and with the requirements of Scottish Water” and add at the end “but North Lanarkshire Council have nevertheless issued completion certificates authorising the occupation of the houses constructed on the MTS site since 2008”. (vi) add new findings in fact as follows: “23. Neither North Lanarkshire Council nor Scottish Water have since December 2008 sought to challenge the continued occupation of the houses constructed on the MTS and served by the sewage and drainage systems. Nor has either contemplated doing so.

24. The issue of a completion certificate by Scottish Water in respect of a sewage or drainage system triggers the commencement of a oneyear defects liability period on the satisfactory completion of which the developer may apply to have the system adopted by Scottish Water.

There is no obligation on a developer to apply for a completion certificate and a certificate is not a requirement of Scottish Water’s agreement that a system can be, and remain, connected to the public sewer.

25. By August 2013 over 200 units had been purchased and occupied at the MTS site, all of which are served by operational sewerage and drainage systems.

26. Accordingly, the systems installed by the defenders have since December 2008 fully satisfied SW and NLC’s requirements for operational sewerage and drainage systems at the MTS site, i.e. systems which satisfactory [sic] serve the houses located there and which are entitled to be connected to the public mains.

27. The sewage and drainage systems constructed at the MTS site and connected to the public sewer have since December 2008 been capable of accommodating the connection of sewage and drainage systems serving up to 40 units on the site owned by the pursuers.”

For Mr McIlvride the central issue in the appeal was what parties should be taken as having intended when they contracted in terms of the longstop clause (what I have designated cl.2.13 in the text of the agreement reproduced above) that the systems should be “completed and commissioned” if the defenders were not to incur a liability to make payment.While he had proposed alterations to the sheriff’s findings of fact in order to provide an accurate statement of the context in which the longstop clause had to be applied, he immediately accepted that these alterations, if made, would not avail the defenders if the court was not with him on what was the proper construction of the agreement.

[12] It was Mr McIlvride’s submission on behalf of the defenders that “completed and commissioned” is properly to be construed as requiring the defenders to have completed the construction on the MTS site of sewage and surface/storm water drainage systems which had each become operational and which were capable of accommodating the connection of systems serving up to 40 units on the pursuers’ site. It was accepted that it was implicit that the operation of the systems would require to be to a standard satisfactory to Scottish Water. Such a requirement was readily understandable as making commercial sense where Scottish Water’s consent was a necessary condition of the systems being connected to the public sewer. For the systems to be “completed” they would have to be operational in the sense of having been connected to the public sewer not simply as a matter of fact but with the consent of Scottish Water.

Similarly, it was accepted that the systems would require to be of a standard satisfactory to North Lanarkshire Council, as building control authority, so that the council would be in a position to grant completion certificates (previously habitation certificates) authorising the habitation of each of the houses to be

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served by the systems; “commissioned” comprehended being used or being capable of being used by those persons who were entitled to inhabit the houses to which the systems were connected or served. However, as long as the systems were completed and commissioned to such a standard as met the requirements of Scottish Water for connection to the public sewer and the requirements of North Lanarkshire Council for the grant of completion certificates authorising habitation of up to 40 houses on the Hill Family site, then the requirements of cl.2.13 were met. Cl.2.13 did not have the result that the defenders were obliged to make payments until the conditions of the systems were such that the defenders were in a position to procure the vesting of the systems in Scottish Water as provided for by s.16 of the Sewerage (Scotland) Act 1968. Nor did the longstop clause impose an obligation to make payments on failure on the part of the defenders to intimate to the respondents by any specified date that the systems on the MTS site had been completed and commissioned to the satisfaction of Scottish Water and North Lanarkshire Council.

[13] Contrary to the finding by the sheriff, it was the defenders’ submission that they had “completed and commissioned” the sewage and surface/storm water drainage systems by December 2008. Mr McIlvride founded on the following indicators of that being so: by that date the systems were operational on the MTS site; the systems have now served the owner occupiers living on that site for some six years; North Lanarkshire Council has granted completion certificates authorising habitation of all the houses completed on the MTS site; Scottish Water has allowed a continuing connection to the public sewer, levied water charges and reimbursed the defenders for construction costs; neither Scottish Water nor North Lanarkshire Council has sought to challenge, prevent or restrict the operation of the systems; and in December 2008 the systems were capable of accommodating a further 40 units on the Hill Family site. The sheriff’s construction of cl.2.13 appeared to have been achieved only by reading into it words which are found in other clauses of the agreement but which parties had not included in the cl.2.13.

[14] Even if the construction proposed by the respondents and adopted by the sheriff were considered tenable, that proposed by the defenders was the more commercially sensible and should be preferred for that reason: Rainy Sky SA v Kookmin Bank and Grove Investments Ltd v Cape Building Products Ltd. Further, the defenders’ construction should also be preferred because to prefer that of the pursuers would be to confer upon them an arbitrary and unpredictable windfall which they could not reasonably have expected from the contract in that the pursuers having achieved their objective of having in place operational systems to which they had the opportunity to connect, there was no commercially rational basis for the defenders remaining under the obligation to pay £5,000 per month on the premise that they had failed to complete and commission operational systems.

[15] In allowing the amendment on 18 November 2014, the sheriff had exercised her discretion unreasonably. The evidence had concluded on 21 August 2014. Prior to then the defenders had been given no notice that the extent or approval of systems in the period after May 2013 was in issue. In the circumstances the defenders had made no attempt to investigate the position or lead evidence in respect of any later period. They were accordingly unfairly prejudiced.

A

B

C

D

E

F

Pursuers and respondents

[16] On behalf of the respondents, Mr Bartos did not take issue with the defenders’ proposed additions to finding in fact 13 or with the proposed new

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G

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findings in fact 24, 25 or 27. However, he did take issue with Mr McIlvride’s other proposed alterations to the sheriff ’s findings in fact. As far as the new finding in fact 14 was concerned, there was neither averment nor evidence to the effect that Scottish Water had “considered” the systems including the SUDS pond and pumping stations “sufficiently satisfactory” to warrant their continued connection to the public sewer since 2008. As for her finding 18 the sheriff had been correct to describe the systems at the MTS site as “incomplete” as at 23 July 2012. This reflected the evidence of Gina Temple, customer connections team leader of Scottish Water, expressed in Scottish Water’s letter to the pursuers’ solicitors and dated 23 July 2012 and summarised by the sheriff at para.63 of her note: no completion certificates had been issued by Scottish Water in respect of the pumping stations and the SUDS pond, a snagging list having been issued for the pumping stations following inspection and there having been no inspection of the SUDS pond. As it is put in the final paragraph of the Scottish Water letter: “Scottish Water will vest the drainage system at this development subject to it being constructed to our standards and specification, however, at this time it remains private and incomplete and cannot be vested until the pumping station and SUDS pond are complete.”

The evidence of John Duncan, who had been led for the defenders, was to similar effect. As for finding 21, the defenders have not provided the pursuers with the written notice referred to (in para.2.9); that had been spoken to by both Stewart Hill and Robert Hill and there had been no contrary evidence.

As for Mr McIlvride’s proposal to delete finding 22, this finding was critical.

There was no basis for deleting it. It was supported by the evidence of Gina Temple and John Duncan, previously referred to in the context of finding 19, as well as by the email from Brian Campbell dated 10 August 2009 (admissible by virtue of the parties’ joint minute) which stated that: “the pond is near completion and the pumping stations still require final commissioning . . . the system seems to be performing satisfactorily, however we will require the completion of the SUDS feature and the pump stations commissioned”.

Evidence had been led from Fraser Miller, a planning officer of North Lanarkshire Council. He had no involvement with the issue of completion certificates authorising the habitation of newly built houses. He was, however, the author of a letter dated 2 October 2012. He confirmed that the relevant planning permission, referred to in that letter, provided, by way of condition 23, that before any house within the MTS site is occupied the SUDS pond shall be completed to the satisfaction of the planning authority and the connection from the site to the public sewer shall be completed. The issue of a certificate authorising habitation did not mean that the council, as planning authority, was satisfied that the conditions attached to a planning permission had been complied with. As far as proposed new finding 23 was concerned, there was simply no evidential basis for such a finding. Neither Gina Temple nor Fraser Miller had spoken to this. The sheriff did not err in not making such a finding. As for proposed finding 26 was neither pled nor proved.

Mr McIlvride’s invitation to the court to make such a finding was an attempt to make a case not on record.

[17] Mr Bartos commended the sheriff’s construction of the agreement. She had relied on well-recognised principles: (1) a contract must be read as a whole and each provision read in the light of the other provisions: Taylor v Secretary of

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State for Scotland, p.144C–D; (2) where there are two possible constructions the court should favour the more rather than the less commercial alternative: Rainy Sky SA v Kookmin Bank and Grove Investments Ltd v Cape Building Products Ltd at para.9; and (3) the more unreasonable the result the less likely it is the parties can have intended it and the more necessary is it that such an intention is made abundantly clear: L Schuler AG v Wickman Machine Tools Sales Ltd, p.251E. Moreover, the sheriff had carried out the iterative process (checking each of the rival meanings against other provisions of the document and investigating its commercial consequences) required to resolve an issue of interpretation: In re Sigma Finance Corporation, Lord Mance, para.12; Rainy Sky, Lord Clarke, para.28; Arnold v Britton, Lord Hodge, para.77.

[18] Mr Bartos accepted Mr McIlvride’s definition of “commissioned” as “made operational” but distinguished between Mr McIlvride’s definition of “completed” and what he, Mr Bartos, put forward as the proper interpretation.

Whereas Mr McIlvride construed “commissioned” as “being capable of being operated” (demonstrated perhaps by actually being in operation), Mr Bartos construed “commissioned” as “being compliant in all respects with the requirements of North Lanarkshire Council and Scottish Water”. He then developed his submissions in support of his proposed construction by reference to the approach adopted by Lord Neuberger in Arnold at para.15. The natural and ordinary meaning of “completed” was “fully constructed in every respect” and that comprehended having received all requisite approvals. There was no dispute but that the object of the obligation on the defenders was to enhance the value of the Hill Family site. In terms of cl.2.5 the defenders confirm that: “the said sewage systems will comply in all respects with the requirements of North Lanarkshire Council as planning authority Scottish Water and any other interested statutory authority”.

It can accordingly be implied that the defenders were bound to require to have the systems vested in Scottish Water. Were the defenders’ definition correct then “completed” would have a different meaning in cl.2.9 than it would in cl.2.13 (the longstop clause). The overall purpose of cl.2.13 was to relieve the pursuers from having to deal with the statutory authorities in relation to the connections which they were entitled to make with the defenders’ systems; they were to get a connection to systems which met all of the statutory authorities’ requirements. This was critical because without that there would be difficulties in using the systems on the MTS site. The purpose of cl.2.13 was, first, to set a time limit and, second, to give a remedial claim for payment for the specified systems not being ready by the longstop date. The importance of a contractual remedial claim was that quantifying damages would be difficult. On the defenders’ approach breach of obligations other than that contained in cl.2.13 would give rise to damages claims. It was unlikely that parties had so contracted as to provide a payment claim for one breach but damages claims for other breaches. The pursuers’ construction, in contrast to the defenders’ construction, was consistent with commercial common sense and would commend itself to the reasonable man. That had been the sheriff’s conclusion, as explained in pars.55–61 of her note, and she had not erred.

[19] In order to have reached the construction argued for by the defenders, the sheriff would have required to: divorce “completed and commissioned” in the longstop clause from the provisions obliging the defenders to give notice that the systems “have been fully completed” (cl.2.9) and the requirements in cl.2.5 and cl.2.8 that the systems comply in all respects with the requirements of North Lanarkshire Council as planning authority and Scottish Water;

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favour the unreasonable and unlikely view that the parties contemplated that the pursuers should require to pursue separate remedies in order to achieve full compliance with the requirements of the statutory authorities; disregard the absence of practical sanction against the defenders in respect of their failure to serve written notice of completion; and ignore the commercial sense of the pursuers obtaining systems which were capable of being vested in Scottish Water thereby freeing them from the financial burden of maintenance and repair. The pursuers’ note of arguments had indicated that they would advance an argument based on the implication of a contractual term but Mr Bartos advised that this was not insisted upon.

[20] As far as the sheriff’s allowance of the amendment on 18 November 2014 was concerned, this was a matter for her discretion. Moreover, once it was admitted that payments of £5,000 were due in March 2008 there was a shift of onus onto the defenders to establish that payments were no longer due, given that the state of completion of the MTS site systems was a matter peculiarly within their knowledge. There was therefore no need for the pursuers to lead evidence on state of completion. It could not be said that the defenders were not on notice that the respondents’ claim was a continuing one. That much was averred. With the passage of time there had been previous amendments to increase the sum sued for. The prejudice which had been referred to by Mr McIlvride was notional only. He was not in a position to say that there actually was evidence that anything had been done to advance the state of completion of the systems after December 2008.

Decision

D

E

F

G

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[21] There was a dispute between the parties as to whether the sheriff’s findings in fact might legitimately be altered or supplemented but I did not understand parties to be at issue on any of the primary facts found by the sheriff, indeed the primary facts would seem to have been almost entirely uncontroversial. Rather, the argument related to how they should be characterised. I understand why such an argument arose. Mr McIlvride was concerned lest his contentions on contractual construction would be fatally undermined by the way in which the sheriff had expressed her findings in fact.

Mr Bartos was understandably concerned to protect a judgment in which the sheriff had considered the facts to conform to his construction of the contract.

I have set out the parties’ respective positions on the findings in fact. Having had the benefit of the discussion about the findings and the evidence underlying them, I consider that I understand the state of primary fact, albeit at the rather high level of generality at which parties apparently presented the case to the sheriff and certainly presented it to this court. That understanding is not inconsistent with the way in which the sheriff has formulated her findings. I would propose, however, making the alterations to findings in fact 18 and 22 proposed by Mr McIlvride and otherwise in the respects proposed by Mr McIlvride and conceded by Mr Bartos. As far as finding 18 is concerned this means deleting “and incomplete”. As far as finding 22 is concerned that means deleting “and with the requirements of Scottish Water”. What are deleted are less findings of fact than conclusions framed in terms drawn from the agreement and are therefore simply reflections of the sheriff’s views on its proper construction. The alteration to finding-in-fact 22 also includes the addition of the words: “but North Lanarkshire Council have nevertheless issued completion certificates (otherwise habitation certificates) authorising the occupation of the houses constructed on the MTS site since 2008”.

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I set out below the findings in fact as I would propose they be altered or added to (because I would not propose making what Mr McIlvride proposed as finding 26 but have made what he proposed as 27, I have numbered what was proposed as finding 27, “26”): “13. The operation of the sewage and drainage systems installed by the defenders at the MTS site was considered sufficiently satisfactory to Scottish Water for Scottish Water to levy water charges on the owners of the properties occupied on the site. Between April 2009 and March 2012 Scottish Water made reasonable cost contributions amounting to £160,846.50 to the defenders in respect of 108 houses at the MTS site. It is Scottish Water’s policy to make reasonable cost reimbursements to developers only when the work required to accommodate a new connection is complete and the new infrastructure able to generate income for Scottish Water.

18. As at July 2012 the surface/storm water drainage system at the MTS site was private (5/4/2). This remained the situation at proof.

22. By December 2008 the sewage and surface/storm water drainage systems installed by the defenders at the MTS site did not comply in all respects with the requirements of North Lanarkshire Council as planning authority. This remained the situation at the close of evidence in this case on 17 August 2014 but North Lanarkshire Council have nevertheless issued completion certificates (otherwise habitation certificates) authorising the occupation of the houses constructed on the MTS site since 2008.

24. The issue of a completion certificate by Scottish Water in respect of a sewage or drainage system triggers the commencement of a one-year defects liability period on the satisfactory completion of which the developer may apply to have the system adopted by Scottish Water. There is no obligation on a developer to apply for a completion certificate and a certificate is not a requirement of Scottish Water’s agreement that a system can be, and remain, connected to the public sewer.

25. By August 2013 over 200 units had been purchased and occupied at the MTS site, all of which are served by operational sewerage and drainage systems.

26. The sewage and drainage systems constructed at the MTS site and connected to the public sewer have since December 2008 been capable of accommodating the connection of sewage and drainage systems serving up to 40 units on the site owned by the pursuers.”

[22] An important part of the context in which the agreement between the parties has to be interpreted is provided by the terms of the Sewerage (Scotland) Act 1968, as amended by the Water Industry (Scotland) Act 2002 and the administrative practice of Scottish Water, the body corporate established in terms of s.20 of the latter Act. Also of relevance are the powers of North Lanarkshire Council as planning authority with functions derived from the Town and Country Planning (Scotland) Act 1997 and as building control authority with the functions derived from the Building (Scotland) Act 2003. It is convenient to say a little about these matters before going any further.

[23] Section 1 of the 1968 Act imposes duties on Scottish Water to provide public sewers, public sustainable urban drainage (“SUD”) systems and sewage treatment works and to take public sewers to such points as will enable the owners of premises which are to be served by sewers to connect their drains or private sewers with the public sewers at reasonable cost. The duty is qualified by s.1(3) as not requiring Scottish Water to do anything which is not practicable at a reasonable cost. The s.1 duty, taken with the reasonable cost provisions, give rise to a situation, explained in the executive note to the Provision of

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Water and Sewerage Services (Reasonable Cost) (Scotland) Regulations 2006, SSI 2006/120 (now repealed but in force at the relevant time), whereby Scottish Water is required to meet the cost of strategic infrastructure required for new developments while developers are required to meet the cost of additional local infrastructure subject to a reasonable cost contribution by Scottish Water.

[24] Section 2 of the 1968 Act imposes the duty on Scottish Water to maintain and where appropriate renew all sewers, SUD systems, sewage treatment works and other works vested in it. S.8 provides that in circumstances where it has no duty to provide public sewers but it is satisfied that premises are to be constructed by any person, Scottish Water may enter into an agreement with that person respecting the provision by that person of sewers and sewage treatment works to serve those premises. Such an agreement may specify the terms and conditions on which the work is to be carried out, including provision as to the taking over by Scottish Water of SUD systems and sewage treatment works so provided. Correlative to the duty imposed on Scottish Water by s.1, in terms of s.12 the owner of any premises shall be entitled to connect his drains, private sewers or private SUD systems with the sewers, SUD systems or sewage treatment works of Scottish Water and the occupier of any such premises shall be entitled to drain into Scottish Water’s systems through such connections. However, the owner’s right to connect is subject to Scottish Water’s power, in terms of s.12(3), having received notice of the owner’s proposals, to refuse permission for the connection or to grant permission subject to such conditions as it thinks fit. Moreover, in terms of s.14, where notice has been given of the owner’s proposals, Scottish Water may direct the owner to construct his drain, sewer, SUD system or works in a manner differing from that in which he originally proposed to construct them.

Where private sewers and SUD systems are connected with Scottish Water’s sewers or sewage treatment works, in terms of s.16(1)(c) and (2) they shall vest in Scottish Water on the date of their completion. The importance of vesting is that, having regard to ss.2, 15 and 16(3), whereas the owner or occupier of premises has a liability to maintain a private sewer and may be required by Scottish Water to remedy defects, on vesting that liability passes to Scottish Water. This court was not addressed on the detail of the 1968 Act (neither it appears was the sheriff) but our attention was drawn to Scottish Water’s ‘Guide for obtaining new water and waste water services’, which was a production and which sets out how Scottish Water carries out its statutory functions in relation to permitting connection with its water and waste water networks. There was no suggestion that the guide was other than an accurate description of the administrative practice of Scottish Water at the relevant time or that that practice was other than consistent with its statutory powers. C.4 of the guide addresses the process for applying for a new connection and outlines the design work required. As appears from para.4.6, if satisfied by the relevant design calculations, Scottish Water will issue a permit to connect, valid for two years from the date of issue, specifying any applicable requirements or conditions which must be complied with by the applicant for connection.

S.5.1 of Ch.5 of the guide explains that Scottish Water will carry out a site inspection of the developer’s work and on “satisfactory completion” will adopt the section of pipe between the sewer and the curtilage boundary of the developer’s property. Ch.6 of the guide is headed “completion and vesting process”. It sets out how Scottish Water manages and controls what otherwise might have been thought on the face of s.16(1) to have been an automatic vesting of connected private sewers and SUD systems consequent upon “their

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completion” as that expression is used in s.16(2). S.6.1 is specific to pumping stations which form part of the developer’s system. They are to be inspected on behalf of Scottish Water and any snagging items identified. Once any snagging items have been satisfactorily rectified the pumping station will be “commissioned” and an operational certificate issued as an indication that the pumping station was fully compliant with the relevant legislation and specifications. The pumping station must then be operated and maintained on behalf of the developer until a completion certificate is issued and the defects liability period starts. What is meant by a completion certificate is set out in s.6.2 and what is meant by the defects liability period is set out in s.6.3. One completion certificate will be issued to cover wastewater elements (sewers, surface water drainage, SUD system and any pumping station). It certifies that the elements have been constructed, tested and inspected to standards set out in the latest version of a technical document, ‘Sewers for Scotland’. The defects liability period starts when a completion certificate is issued. It extends for a minimum period of 12 months or until the last house on the development is completed, whichever is longer. Only during the final three months of the defects liability period can the developer apply for a transfer certificate to vest the relevant infrastructure in Scottish Water. Ch.7 of the guide deals with costs, charges and financial contributions. S.7.7 explains that Scottish Water’s financial contributions towards the cost of strategic infrastructure will only be paid when the work required to accommodate a new connection is complete and the new infrastructure is capable of generating income from consumers.

[25] Thus, there are a number of stages in a process managed by the various permissions which may be granted or withheld by Scottish Water. Of particular importance in the present case is the stage at which a developer has the right to connect his system to the public sewer and the later stage at which the developer can apply for the vesting of his system in Scottish Water. Once the first of these stages has been reached the houses in a development are capable of being drained and, subject to being otherwise satisfactory, being certified and accepted as complete in terms of ss.17 and 18 of the 2003 Act. Once the later stage is reached the developer is in a position to relieve himself of further responsibility for maintenance of his system by requiring it to vest in Scottish Water.

[26] With that by way of outlining the context, I turn then to what this appeal is about: a question of contractual interpretation and, in particular, a question as to the proper meaning to be given to the expression “the said systems are completed” where it occurs in the longstop clause (otherwise cl.2.13). Discussion had focused on the fuller expression “the said systems are completed and commissioned” but Mr Bartos narrowed the issue by accepting Mr McIlvride’s definition of “commissioned” as meaning: “made operational and therefore capable of being put to use by those entitled to inhabit the houses served by the systems”.

[27] In construing the agreement I shall endeavour to keep in view and to follow the general guidance provided by Lord Neuberger in paras 15–23 of his opinion in Arnold v Britton. Lord Neuberger begins that passage as follows: “15. When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to ‘what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean’, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd, [2009] A.C. 1101,para 14. And it does so by focussing on the meaning of the relevant words, in this case clause 3(2) of each of the 25

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leases, in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party’s intentions.”

[28] The first four paragraphs of cl.2 are in the form of recitals explaining why the parties are entering into the agreement. Cls.2.1 and 2.2 set out the intention of the respective parties to develop their respective sites for residential purposes. Cl.2.3 sets out that in order to facilitate the development of the MTS site, Bett and SMG are to install a sewage system which will connect the MTS site with the public sewage system by way of a pipe. Cl.2.4 sets out that it has been agreed that in order to facilitate the development of the Hill Family site the now pursuers and respondents will be entitled to connect to the said sewage system at no cost to them. Cls.2.6 and 2.7 are also in the form of recitals, mirroring cls.2.3 and 2.4 but relating to a surface/storm water drainage system. Thus, a purpose of the agreement is, by virtue of cls.2.4 and 2.7, to confer an entitlement on the pursuers to connect to the defenders’ sewage and surface/storm water systems at no cost to the pursuers. I pause to observe that because it does not appear from the sheriff’s findings in fact and it was not explored in the course of the appeal, I have to confess not to have understood everything that connection would involve as a matter of fact, or the precise legal mechanism, following from the statutory and administrative structure which I have outlined above, by which a connection between systems on the Hill Family site (once constructed) and systems on the MTS site would lead to the vesting of Hill Family site systems in Scottish Water, hence the description of my understanding of the facts and circumstances as being at a rather high level of generality. However, I understood parties to be agreed that what was being contracted for in the agreement was a means of the Hill Family site connecting with the public sewer by connecting with systems on the MTS site and that once systems were constructed on the Hill Family site, as a matter of law and practice, the progress of these systems through the process of permissions and approvals leading to vesting in Scottish Water was dependent upon the progress of the MTS site systems. In other words, I took parties to be agreed that before any Hill Family site systems can be made operational, the MTS site systems must be operational, and before any Hill Family site systems can vest the MTS site systems must have vested.

[29] Cls.2.5, which relates to the sewage system (referred to as “the said sewerage system”) and 2.8 which relates to the surface/storm water system are in very similar terms. In both paragraphs Bett and SMG “confirm” three things: (i) that the respective systems “will comply in all respects with the requirements of North Lanarkshire as planning authority, Scottish Water and any other interested statutory authority”; (ii) that the systems will have the capacity “as at the date of installation” to serve a development of no more than 40 residential units on the Hill Family site; and (iii) that should any alteration of the systems be required in order to provide such capacity, all costs incurred in that regard will be the sole responsibility of Bett and SMG. [30] In terms of cl.2.13 Bett and SMG undertake that they will use all reasonable endeavours to ensure the “both the sewerage and surface/storm water systems will be completed and commissioned by” the longstop date.

Given what Bett and SMG have confirmed in cls.2.5 and 2.8, the systems to be “completed and commissioned” must be systems which “comply in all

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respects with the requirements of North Lanarkshire Council as planning authority, Scottish Water and any other interested statutory authority”.

Mr McIlvride conceded as much in accepting that it was implicit that the operation of the systems would have to be of a standard satisfactory to both Scottish Water and the council.

[31] As already noted, parties were agreed that “commissioned” meant “made operational and therefore capable of being put to use by those entitled to inhabit the houses served by the systems”. On that definition I would see the requirements of cl.2.13 as having been met as at December 2008 insofar as the “commissioned” aspect of “completed and commissioned” is concerned.

As appears from the sheriff’s findings in fact the systems were connected by that date and were working to drain the MTS site. On the basis of the same facts, giving the word its natural and ordinary meaning, it can also be said that the systems were “completed”. They certainly had been physically constructed.

As can be seen from Chs.4 and 5 of the guide, the fact that the MTS systems have been connected to the public sewer means that Scottish Water has been satisfied with the design of the systems, has issued a permit to connect, has carried out a site inspection and been satisfied as to the completion of that work. Thus, looking to the natural and ordinary meaning of the phrase, it can be said that the systems were “completed and commissioned” by December 2008. That conclusion is reinforced if it is to be inferred from the order of the words that commissioning is something that comes after completion, as would seem to make sense. What I mean by that is that the word order suggests the stage indicated by “completed” is a stage necessarily prior to the stage indicated by “commissioned”. As I took Mr Bartos to accept, the fact that the systems were operational meant that the “commissioned” stage had been reached. Thus, if word order is meant to indicate time sequence, the fact that the systems have been “commissioned” means that they must previously have been “completed”.

[32] That is not the construction that commended itself to the sheriff. As she recorded in her note, it had been submitted to her on behalf of the defenders that “completed and commissioned” meant no more than that the systems on the MTS site should be operational and that units on the Hill Family site could connect with them (and essentially this was Mr McIlvride’s submission to us). This she saw as failing to follow the principle that the meaning of a contractual provision had to be assessed in the light of the other provisions. In particular, it failed to have regard to cl.2.9 (the “notice clause”).

[33] I agree with the sheriff that construing any particular contractual provision requires examination of the other provisions and that, as a matter of generality, it would be wrong to read a particular provision (here cl.2.13) in isolation. However, the result of such an examination may be to find that the various provisions interrelate to a greater or lesser degree. Some may be interdependant. Some may be free-standing. It will be more readily apparent that provisions are inter-dependant where their drafting is coherent and consistent.

Here, cl.2.9 requires the defenders to provide written notice to the pursuers that both sewerage and surface/storm water drainage systems “have been fully completed to the satisfaction of all relevant authorities” within 21 days of “the date of completion as aforesaid”. It is uncontroversial that no notice has been given. The defenders say that that does not matter as far as the construction of cl.2.13 is concerned; cl.2.9 is of the nature of a free-standing obligation which, if breached, would give rise to a claim for damages in respect of any consequent loss but it is not necessarily tied to the cl.2.13 payment provision. Not so, according to the sheriff (Mr Bartos in his submissions before us was to the

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same effect); that would be to give “completed” a different meaning in cl.2.13 than the meaning it is given in cl.2.9. As the sheriff has it, the parties had agreed for installation of the systems that would comply in all respects with the requirements of Scottish Water, North Lanarkshire Council as planning authority and any other interested statutory authority; that was the standard reiterated in cl.2.9; and that was the standard to be applied in what she describes as “a unitary way” throughout the contract and, in particular, in cl.2.13, in determining whether the systems had been “completed”.

[34] I understand the sheriff’s expectation of coherence in a professionally drafted formal contract of the sort that the agreement clearly is an example.

However, any expectation of coherence in a contract may have to give way before the actual wording used by the parties to it. Where the wording is consistent then it may be assumed that the meaning is intended to be consistent.

It is different where the wording is not consistent. The sheriff has seen the central thread in the agreement as an undertaking by the defenders to bring their systems at least to the point where the defenders could apply for a transfer certificate with a view to compel vesting as referred to in Ch.6 of the guide. I am not persuaded that the agreement supports that analysis. The sheriff’s approach, which Mr Bartos urged this court to follow, depends on cl.2.9 being construed as referring to the relevant statutory authorities being satisfied in every possible particular as to the state of the systems on the MTS site, down to the remedying of snagging. However, the cogency of that approach comes from the fact that the expression used in cl.2.9 is “fully completed to the satisfaction . . .” That is not an expression that is found elsewhere in the agreement. It is not the expression that we are required to construe in cl.2.13.

As the sheriff observes, the “wording is slightly different” as between its various paragraphs. Generally, when one is construing a text of any sort, if different words or combinations of words are used then it is to be presumed that different meanings are intended. I accept that if the words used are unclear or the drafting is otherwise poor, the more ready the court can properly be to depart from their natural and ordinary meaning. However, that does not justify the court in searching for or constructing drafting infelicities in order to justify a departure from the natural meaning: see Lord Neuberger in Arnold at para.18.

The language of the provision being construed is of prime importance and its meaning is most obviously to be gleaned from that language: see Lord Neuberger in Arnold at para.17. In other words the meaning of a provision is primarily to be understood from the natural and ordinary meaning of the actual words used. It is not legitimate to seize on one provision as capturing the parties’ intention and then to disregard variations on that provision as irrelevant aberrations. Turning back to cl.2.9, “fully completed to the satisfaction of all relevant statutory authorities” is a different wording from “completed” or “completed and commissioned” which are what is found in cl.2.13. That might not matter if there were some explicit linkage between the two paragraphs making it clear that “completed” in cl.2.13 meant the same as “fully completed to the satisfaction of all relevant statutory authorities” in cl.2.9. There is no such linkage and therefore, confining the examination just to these two paragraphs the presumption is that, when it comes to the matter of completion, because the wording of the two paragraphs is different their meaning is different, with the “fully completed to the satisfaction of all relevant statutory authorities” of cl.2.9 suggesting a more demanding standard or later stage in the process of permissions and approvals than the “completed” of cl.2.13.

Cl.2.9 ends with “the date of completion as aforesaid”. That expression would seem to be best understood as an abbreviated reference to what had immediately

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preceded it, namely “fully completed to the satisfaction of all relevant statutory authorities”. If the intention was to link 2.13 back to 2.9, the draftsman could have used that expression again to import “fully completed to the satisfaction of all relevant statutory authorities” into the longstop clause. The draftsman did not, however, do so. Whilst that may not be determinative, it certainly puts in question the sheriff’s “unitary” construction of the paragraphs under consideration.

[35] I am therefore not persuaded that the sheriff was correct to conclude that “completed” required to be given the same meaning in cl.2.13 as in cl.2.9.

While it might be said that the fact that the defenders have not given a cl.2.9 notice can be taken to be an acceptance by them that the systems have not yet been “fully completed to the satisfaction of all relevant statutory authorities”, that is not a view that I would favour. The agreement does not give the provision of cl.2.9 notice any particular status or effect. Cl.2.9 does look to be free-standing, as Mr McIlvride submitted that it was. In any event, “fully completed to the satisfaction . . .” is different wording from “completed” or “completed and commissioned”. Thus, assuming the sheriff is correct in her construction of cl.2.9 that has no necessary impact on the construction of cl.2.13.

[36] Before the sheriff it had been argued on behalf of the pursuers that in order to bring liability to make payments in terms of cl.2.13 to an end it was necessary for the defenders to provide a notice under cl.2.9. The defenders had failed to do that. They therefore remained liable to make payments. The sheriff seems to have accepted that argument. I did not understand Mr Bartos to renew this submission before us. Had he done so I would have been unable to accept it. Beyond what it may contribute to the definition of “installation date” in cl.1.1 (a provision which presents problems of its own for anyone looking for coherent drafting, particularly if contrasted with the wording of cls.2.5 and 2.8), it is not entirely clear what the purpose of cl.2.9 is but, as I have already indicated there is nothing in its wording, or that of cl.2.13, to tie the two provisions together in the way which seems to have been envisaged by the sheriff.

[37] The sheriff saw what she considered was the commercial purpose of the agreement as supporting her construction of cl.2.13 because it provided for payments to continue until the point at which the defenders were in a position to apply for a transfer certificate in the respect of the systems on the MTS site. With all respect to the sheriff, this seems to amount to no more than an assertion on her part with nothing much by way of underpinning in the findings in fact (presumably because no relevant evidence was led). I am prepared to assume that the facility of connecting systems constructed on the Hill Family site with systems on the MTS site which are at a stage where the developer of the MTS site can require his systems to vest in Scottish Water is more valuable or otherwise more beneficial to the pursuers than the facility of connecting systems constructed on the Hill Family site with systems on the MTS site which are merely at the stage of being operational. However, that does not make a construction of the agreement which leads to the pursuers being entitled to the first facility any more “commercial” than a construction which leads to the pursuers merely being entitled to the second facility.

Moreover, it is to be borne in mind that what is in issue is the payment provision in cl.2.13. As it appears to me, there would be nothing offensive to commercial common sense in a construction of cl.2.13 which entitled the pursuers to payments of £5,000 per month up to but not beyond the date upon which they would be able, should their own development be at that

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stage, to connect to operating sewage and surface/storm water drainage systems and that irrespective of whether or not on a proper construction of other provisions of the agreement the pursuers are entitled to require the defenders to take the systems on the MTS site to the stage of vesting in Scottish Water. During his submissions Mr Bartos explained that cl.2.13 had two purposes: to set a time-limit and to give a remedy in the event of delay in circumstances where the quantification of damages would be difficult. That fits perfectly well with Mr McIlvride’s construction, particularly in the light of the recital in cl.2.2 that the pursuers intend to develop the Hill Family site; as long as the defenders delay the pursuers in bringing the Hill Family site to the point where the residential units can be certified as fit for habitation and therefore sold as available for occupation, then they are bound to compensate the pursuers at the agreed rate, but once the pursuers can connect to operational systems and therefore exploit the development of the Hill Family site by selling houses which are ready for habitation there is nothing to be compensated for.

[38] I was not persuaded by Mr Bartos’s one-remedy argument. It simply may be the case that breaches of different contractual provisions give rise to different remedies and, indeed, this is more likely to be so when one of the remedies in question is liquidate damages. If such a provision is not to be held to be an unenforceable penalty (and this was a matter taken to debate in the present case) but rather a pre-estimate of likely damages then it may well have to be construed as referable to one contractual obligation but not to another.

[39] It accordingly appears to me that Mr McIlvride’s proposed construction of cl.2.13 not only is more consistent with the natural and ordinary meaning of the critical words than the construction proposed by Mr Bartos and adopted by the sheriff, but that it survives and indeed is strengthened by the iterative process described above (cf In re Sigma Finance Corporation, para.12; Arnold, para.77). Therefore, on the facts found by the sheriff, as I would propose they should be altered, the systems on the MTS site had been “completed and commissioned” in terms of the longstop clause no later than the end of December 2008. I would therefore move your Ladyships to alter the findings in fact as indicated, allow the appeal, recall the sheriff’s interlocutors of 10 and 29 July 2015, and grant decree of absolvitor.

[40] Had it been necessary to do so, I would have moved your Ladyships to allow the defenders’ appeal insofar as directed at the sheriff’s interlocutor of 18 November 2014 allowing amendment of the sum sued for from £265,000 to £345,000. The motion to amend had been made at a hearing on evidence some months after the conclusion of the proof. The basis for seeking to amend was that the pursuers’ claim was time-related in that it was for payment at the rate of £5,000 per month. Accordingly, assuming the pursuers’ claim to be well founded, as time went by the quantum of the claim necessarily increased.

The supporting pleadings (as at the commencement and conclusion of the proof and, indeed, at the time of the appeal) were in these terms: “The sum of TWO HUNDRED AND SIXTY FIVE THOUSAND POUNDS (£265,000) STERLING is accordingly outstanding as at 28 May 2013. The payments continue to accrue.”

[41] Mr Bartos argued on behalf of the pursuers that amendment was a matter for the discretion of the sheriff. Any prejudice to the defenders arising from allowance of the amendment was notional only, there being no suggestion that there was evidence available to the defenders which they might have led had the higher sum been that which was sued for at the beginning of the proof.

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[42] I accept that the allowance of amendment was a matter for the discretion of the sheriff. However, I would see the way in which she exercised it was sufficiently unreasonable as to permit this court to recall her decision.

The pursuers’ averments took their claim only up to 28 May 2013. If the pursuers wished to take it forward it was necessary that they amend. How they framed that amendment and when they presented it were matters for them.

However, whenever any motion was made, a primary consideration for the court would be what was the explanation for the lateness of the motion being made and what was the consequential prejudice to the defenders arising from the terms in which amendment was proposed. Here, there appears to have been no explanation for lateness other than inadvertence or an assumption that it was merely a formal matter. The defenders were entitled to say, as they did say, that they had been deprived of the opportunity of investigating what evidence might be available to them in relation to the period after 28 May 2013 and then leading that evidence. On the face of it that was prejudice which was both substantial and unfair. In these circumstances in allowing the amendment I consider that the sheriff can be said to have acted unreasonably.

[43] I would propose that the court reserves all questions of expenses.

LADY CLARK OF CALTON [44] Lord Brodie has set out in detail the background to the case, the statutory framework, the submissions of the parties and the facts of the case which are not in dispute. I am grateful for that and content to proceed on that basis. I agree with the conclusion of Lord Brodie and Lady Smith that this appeal should be allowed, that the sheriff’s interlocutors of 10 and 29 July 2015 be recalled and that decree of absolvitor should be granted. The reasons for my agreement may be simply stated.

[45] As I understand the position of the pursuers in the appeal, it was not disputed that by December 2008, the defenders had completed the construction on the MTS site of sewerage and surface/storm water drainage systems which had become operational, serving a large number of houses with habitation certificates and also with a capacity capable of accommodating the connection of up to 40 two-storey residential units on the pursuers’ site. This had been accomplished following various approvals from the planning authority and Scottish Water. The pursuers submitted however that this was insufficient to fulfil the terms of the agreement, in particular cl.2.13 because more required to be done by the defenders. In particular, counsel for the pursuers submitted that in order to complete the sewerage and surface/storm water drainage systems to the satisfaction of all relevant statutory authorities in terms of the agreement, the defenders were bound to achieve a standard of compliance to satisfy Scottish Water that the systems should be vested in Scottish Water. Counsel for the pursuers submitted that this was an implied term of the agreement properly interpreted.

[46] In my opinion this submission by the pursuers highlights the weakness of their position.The parties have chosen to set out the terms of their agreement in writing. In Arnold v Britton, Lord Neuberger states: “17. First, the reliance placed in some cases on commercial common sense and surrounding circumstances (eg in Chartbrook, [2009] A.C. 1101, paras 16–26) should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the

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provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract. And, again save perhaps in a very unusual case, the parties must have been specifically focusing on the issue covered by the provision when agreeing the wording of that provision.”

[47] The parties set out in writing in some detail their purposes in entering into the agreement. The pursuers intended to develop their site and in cls.2.4 and 2.7, the purposes specified are to facilitate the pursuers’ development and entitle them to connect to the sewage and surface/storm water system at no cost to them. The parties have agreed (in words which are not always entirely consistent in the different paragraphs) that there is to be “compliance” (sometimes referred to as “full compliance”), in all respects with the requirements of the planning authority, Scottish Water and any other interested statutory authority in relation to the systems and to the extra capacity for the pursuers’ development.

[48] In my opinion, the parties have clearly reached an agreement with declared purposes focusing on the practical outcome of completed and commissioned systems, which comply with the various planning and statutory requirements for such systems. The agreement states nothing about the issue, which I consider to be entirely separate, as to whether the systems are to remain in private ownership or by the statutory vesting process be transferred into public ownership, with consesquential different liabilities. There is no statutory obligation on a developer to go through the compliance procedures to bring a system up to a standard which would qualify the system to vest in terms of s.16 of the Sewarage (Scotland) Act 1968. A developer is not obliged under the statutory system to apply for vesting. In such circumstances, I consider that it is impossible to read into any part of the agreement, including cl.2.13, the implied terms advanced by counsel for the pursuers.

[49] In relation to the issue of amendment, I agree with the reasoning and conclusion in paras 40–42 of the opinion of Lord Brodie.

For the pursuers and respondents: Bartos, instructed by Balfour + Manson LLP, Solicitors, Edinburgh.

For the defenders and appellants: McIlvride QC, instructed by Morton Fraser LLP, Solicitors, Edinburgh.

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February 2017 2017 S.C.L.R. 1−114

SCOTTISH CIVIL LAW REPORTS

Contract— Construction of contract—Whether works “completed and commissioned” Hill v Stewart Milne Group Ltd (IH) 92

2017 S.C.L.R. 1–114

Scottish Civil Law Reports Edited by Sheriff Michael J Fletcher Chiswell v Chiswell (OH) DM v Fife Council (IH) Harper v Letley (OH) Hill v Stewart Milne Group Ltd (IH)

*711748*

49 8 1 92

St Andrews Environmental Protection Association Ltd, Petitioner (IH) Wagner v Grant (IH) West Lothian Council v MB and KV (OH)

35 79 65