Scottish Civil Law Reports, Issue 3, June 2015

Damages — Contributory negligence—Provocation Rennie’s Guardian v Morrison (OH)

251

June 2015 2015 S.C.C.R. 251−366

Process— Reponing note—Inadequate medical certificate Boyd v Fortune (IH) 361

Reduction— Expenses— Forged signature—Discretion Interest Chalmers v Chalmers (OH) 299 Phee v Gordon (IH) 343

Natural justice— Fair trial AD, Appellant (IH) 286

Scottish Civil Law Reports

Reparation— Scale Professional negligence—Duty of care—Duty to Scottish Ministers v Stirton (IH) 350 give advice about treatment Montgomery v Lanarkshire Health Husband and wife— 315 Divorce—Capital sum—Fair sharing Board (UKSC) Parker v Parker (OH) 259

2015 S.C.C.R. 251–366

Scottish Civil Law Reports Edited by Sheriff Michael J Fletcher AD, Appellant (IH) Boyd v Fortune (IH) (Notes) Chalmers v Chalmers (OH) Montgomery v Lanarkshire Health Board (UKSC) Parker v Parker (OH)

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286 361 299 315 259

Phee v Gordon (IH) (Notes) 343 Rennie’s Guardian v Morrison (OH) 251 Scottish Ministers v Stirton (IH) (Notes) 350

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A COURT OF SESSION

8 August 2014

Outer House Lord Jones FRANCES MCLAUGHLIN as guardian of John Rennie

Pursuer

B

against PAULINE MORRISON and ESURE SERVICES LTD

First Defender Second Defender

Damages—Contributory negligence—Relevancy—Provocation—Assault Section 1 of the Law Reform (Contributory Negligence) Act 1945 provides, inter alia: “(1) Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage. . . .”

The pursuer raised an action for damages for serious injuries on behalf of John Rennie who was run down by a car driven by the first defender. In due course the pursuer moved the court to allow a proof, restricted to the issue quantum.

The second defender opposed that motion on the ground that it had averred that Mr Rennie had suffered damage as the result partly of his own fault and, separately, that he had provoked the assault. The pursuer argued that both of these issues were irrelevant and lacking in specification. The pursuer averred that Mr Rennie was injured when he was standing on the road and the first defender drove a car at him at speed hitting him and knocking him to the ground.

The first defender was convicted of assault to severe injury, permanent disfigurement, permanent impairment and to the danger of Mr Rennie’s life.

He had sustained a serious brain injury and required full-time care. The averments were that the pursuer was a member of a family in Glasgow which operated criminal enterprises and the first defender was a member of a rival family also operating criminal enterprises. The incident occurred at premises known as the Ranza Bar which was frequented by a number of members of the first defender’s family. There had been a number of previous violent incidents between them. These incidents included fights and assaults at least one of which had been fatal.

Mr Rennie had been travelling in a vehicle driven by a member of the rival family, which had driven past the Ranza Bar several times. The intention had been to mount an attack on the bar and items were thrown and abuse was shouted in an attempt to get the occupants of the bar to come out. At one stage Mr Rennie had alighted from the vehicle he was in and had been speaking to a person in another vehicle, while he was standing there he was struck by a vehicle driven by the first defender. It was averred that Mr Rennie had been at the locus of the accident to engage in criminal conduct acting in concert with

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the occupants of the Land Rover and the other vehicle whose occupants had been attacking the bar.

Counsel for the pursuer argued that the contributory negligence case was bound to faill in fact and law. It was necessary to identify “the effective cause” of the accident at the moment when it occurred and not at an antecedent stage. The contributory negligence had to be shown to be such that it actually and directly led in itself to the accident. The mere presence of a person at a place where he or she ought not to have been was wholly insufficient to establish the plea. In relation to provocation the pleadings were lacking in specification because they were silent as to how Mr Rennie provoked the first defender (who was not present at the scene of the disturbance) into deliberately driving her car at him.

Counsel for the second defender advanced three propositions in support of his submission that it’s averments on contributory negligence and provocation were fit for proof: (1) that notwithstanding statements of high authority to the effect that a plea under the 1945 Act requires the pre-1945 requirements of contributory negligence to be satisfied, these statements were not binding in Scotland and were open to question; (2) the law of Scotland was different from the law of England in that historically provocation had been recognised as a defence, such that it may now found a plea of contributory negligence under the Act; and (3) in any event, provocation as a stand-alone defence in mitigation should proceed to enquiry. What the Act required was that there should be culpa on the part of the pursuer which is a cause (not the cause) of the injury. It did not offend common sense to say that a cause of injury in an assault was turning up for a fight in the first place.

Held (1) that on the second defender’s pleadings it could not be established that Mr Rennie’s injury was suffered as the result partly of his own fault; it was caused solely by his being run down by the first defender and the defence of contributory negligence was therefore bound to fail (para.16); and (2) that it had to be established that the defender had been provoked by something that the pursuer had done or said, so that in other words there was a causal connection between the alleged act of provocation and the delictual response and the act of provocation had to be a wrongful act, but in the instant case it was not averred that the anger of the first defender was occasioned by anything which she knew Mr Rennie had done and the second defender had pleaded no relevant provocative act (para.17).

Cases referred to:

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Anderson v Marshall (1835) 13S. 1130 Caswell v Powell Duffryn Associated Collieries Ltd [1940] A.C. 152; [1939] 3 All E.R. 722 Co-operative Group (CWS) Ltd v Pritchard [2011] EWCA Civ 329; [2012] Q.B. 320; [2011] 3 W.L.R. 1272; [2012] 1 All E.R. 205 Gillon v HM Advocate, 2006 S.C.C.R. 561; 2007 J.C. 24; 2006 S.L.T. 799 McNaughton v Caledonian Railway Co (1858) 21D 160 Miles v Finlayson (1829) 5 Mur. 84 Murphy v Culhane [1997] Q.B. 94; [1976] 3 W.L.R. 458; [1976] 3 All E.R. 533 Reeves v Commissioner of the Police of the Metropolis [2000] 1 A.C. 360; [1999] 3 W.L.R. 363; [1999] 3 All E.R. 897 Robinson v Hamilton, 1923 S.C. 838; 1923 S.L.T. 522 Ross v Bryce, 1972 S.L.T. 76 Rutherford v Chief Constable for Strathclyde Police, 1981 S.L.T. (Notes) 119 Standard Chartered Bank v Pakistan National Shipping Corporation (Nos 2 and 4) [2002] UKHL 43; [2003] 1 A.C. 959; [2003] 3 W.L.R. 1547; [2003] 1 All E.R. 173

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Taylor v Dumbarton Tramways Co Ltd, 1918 S.C. (H.L.) 96; (1918) 1 S.L.T. 391 Thom v Graham, 1835 13S. 1129 Young v Allison (1820) 2 Mur. 228.

A

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 issued on 8 August 2014.

B

LORD JONES Introduction

[1] This is an action of damages in which the sum sued for is £8,000,000. The pursuer is the guardian of John Rennie (Mr Rennie), by virtue of an order made under the Adults with Incapacity (Scotland) Act 2000. She avers that Mr Rennie was injured on or about 22 May 2010, when he was standing in Royston Road, Glasgow. Suddenly and without warning, it is averred, the first defender drove a car at him at speed, hitting him and knocking him to the ground. On 19 July 2011, the first defender was convicted of assault to severe injury, permanent disfigurement, permanent impairment and to the danger of Mr Rennie’s life. According to the pursuer’s averments, Mr Rennie sustained a serious brain injury as a result of which he is immobile, and cognitively impaired. He requires full-time care. The second defender is convened in terms of reg.3 of the European Communities (Rights against Insurers) Regulations 2002. The pursuer avers that the second defender is directly liable to make reparation to her to the same extent as the first defender.

[2] Following a finding of liability against the second defender and an award of interim damages, the case came before me on 21 March 2014, on the pursuer’s motion to allow a proof, restricted to the issue of quantum. In support of that motion, Miss Maguire QC sought to persuade me that the second defender’s pleadings on contributory negligence and provocation were irrelevant and/or lacking in specification.

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The second defender’s case on record

[3] The second defender’s averments that are the subject of challenge read as follows: “Explained and averred that: (i) The accident occurred in the vicinity of premises known as the Ranza Bar. The Ranza Bar is located on Royston Road, Glasgow. It is close to the Blackhill and Germiston areas of Glasgow. The Blackhill and Germiston areas of Glasgow are utilised by organised criminals to run criminal enterprises. In the Blackhill area of the city, one criminal enterprise is run by the M family; in the Germiston area one criminal enterprise is run by the B family. These criminal enterprises are often involved in rivalry with each other. Such rivalry can, at times, be seriously violent. The first defender is part of the M family that operates the criminal enterprise in the Blackhill area.

The Ranza Bar is frequented by a number of members of that enterprise. The licensee of the premises was, at the material time, the first defender’s uncle. (ii) The first defender had previously been involved in a violent incident at the hands of the criminal enterprise run by the B family. That had occurred in around April or May 2008 in the Wee Glen pub in Forge

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Street, Glasgow. Her father, J M, was badly beaten and stabbed. The first defender had sought to defend her father. Her father is heavily involved in the criminal enterprise run by his family.

Prior to May 2010 there had been tension between the criminal enterprises run by the M and B families. As a result, police presence in the area had been increased.

Shortly prior to the material incident, a group of individuals had (as detailed further below) been involved in an attack on the Ranza Bar. The individuals involved in the attack on the bar were associated with the criminal enterprise run by the B family. They included J B, G B and C B—the three brothers involved heavily in the criminal enterprise. Stones and other items were thrown at the premises. The group of individuals carrying out the attack had (as further detailed below) arrived in two cars, a Volkswagen Golf and a Landrover [sic] Discovery. The Landrover Discovery was regularly used by the B criminal enterprise. It had previously been held by police investigating another criminal incident. In particular, it was held as part of the inquiry into the killing of K C. K C had been killed by men associated with the criminal enterprise run by the B family. His killing was part of an incident whereby members of the B criminal enterprise fought with members of a rival criminal enterprise (operated by the D family), with which K C was associated. As part of the same incident, the Landrover Discovery had been involved in the running down of another man, A B. The Landrover Discovery had, at the time of the material accident, recently been returned to its owners. K C was related by marriage to the first defender. She was aware of the circumstances of his murder and the surrounding incidents. In particular, she was aware of the involvement of the Landrover Discovery, as condescended upon.

Members of the B criminal enterprise met up at premises within the Germiston area of Glasgow. In particular, they met at a carwash at the top of Fulton Street, Glasgow; and at J B’s father’s house. John Rennie was an associate of the B criminal enterprise, and regularly met with the members of the criminal enterprise at both of those locations.

On 22 May 2010, shortly prior to the attack on the Ranza Bar, the Landrover Discovery associated with the B criminal enterprise was in the area of the Ranza Bar. It was being driven by G B, with John Rennie as a passenger. The Landrover and its occupants had been circling the area of the Ranza Bar for the purposes of assisting the occupants of the Volkswagen in a planned attack on the Ranza Bar. The Landrover has (sic) repeatedly driven past the Ranza Bar. It had been noticed by the first defender. The first defender heard G B threaten her from the Landrover. The Landrover had also been noticed by E D, an associate of the M criminal enterprise. Having noticed the Landrover Discovery, E D ran toward the Ranza Bar. The attack commenced when the occupants of the Volkswagen Golf were decanted outside the bar. They were M M, C B, P M M and J B. They threw items at the bar and shouted abuse, in an attempt to goad the occupants of the bar to exit same, whereupon they would be attacked. They were all associates of, and acting in concert with, the occupants of the Landrover—including John Rennie.

During the initial attack on the premises by the occupants of the Volkswagen J B was shot. He was shot in the leg by E D. Following the shooting, J B was picked up in the Volkswagen Golf.

After the shooting, the Landrover Discovery driven by G B was brought to a halt in the offside lane of the eastbound carriageway of Royston Road, close to the Ranza Bar. Mr Rennie was a known

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associate of the occupants of the vehicle. He had alighted from the Landrover. After Mr Rennie had alighted, the Volkswagen pulled up in the offside lane of the eastbound carriageway. Mr Rennie stood at the nearside front window of the Volkswagen. He was engaged in conversation with the occupants of the vehicle, which included J B. It is believed and averred that they were discussing the repercussions of the shooting of J B. It was as he was standing there that Mr Rennie was struck by the vehicle driven by the first defender. (ix) Mr Rennie was at the locus of the accident to engage in criminal conduct. In particular, he was at the locus in order to involve himself in the attack on the premises. In attending at the locus, he was acting in concert with the occupants of the Landrover and those of the Volkswagen. All of those individuals were at the material time involved in the criminal acts of breaching the peace and conspiring to attack the Ranza Bar and persons within. (x) Angered at what she rightly perceived to be an attack on her family’s premises and persons within, and in response thereto, the first defender deliberately—as the jury in the criminal trial found—drove at the vehicles and the group which had alighted therefrom, including the pursuer.”

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[4] As will be seen, the arguments on contributory negligence and provocation were closely linked. I shall, therefore, consider them together.

Submissions for the pursuer

[5] In support of her motion, Miss Maguire contended that the second defender’s contributory negligence case was bound to fail in fact and law. She drew my attention to the terms of s.1 of the Law Reform (Contributory Negligence) Act 1945, as it applies in Scotland. Section 1, insofar as is relevant, provides as follows: [His Lordship quoted the section as set out above and continued:] “Fault” is defined in s.5(a) for Scotland as “wrongful act, breach of statutory duty or negligent act or omission which gives rise to a liability in damages or would apart from this act, give rise to the defence of contributory negligence”.

[6] Counsel cited three pre-1945 House of Lords decisions: Taylor v Dumbarton Tramways Co (Taylor), Caswell v Powell Duffryn Associated Collieries Ltd and Robinson v Hamilton. Miss Maguire argued that these cases make it clear that, when considering whether or not there has been contributory negligence on the part of a pursuer, it is necessary to identify “the effective cause” of the accident at the moment when it occurred and not at an antecedent stage. The contributory negligence must be shown to be such that it “actually and directly led in itself to the accident”, (Taylor, p.105, Viscount Haldane). The mere presence of a person at a place where he or she ought not to have been is wholly insufficient to establish the plea. Any antecedent negligence is just part of the history.

[7] Relying on the decision in Co-operative Group (CWS) Ltd v Pritchard (Pritchard), Miss Maguire submitted that contributory negligence is not a defence to an action for damages caused by an intentional tort. In support of the same argument, she referred me to the cases of Reeves v Commissioner of the Police of the Metropolis (Reeves) and Standard Chartered Bank v Pakistan National Shipping Corporation and others (Nos 2 and 4).

[8] Counsel’s principal criticism of the second defender’s pleadings on provocation was that they are “particularly lacking in specification given the

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pleadings are silent as to how or in what way Mr Rennie provoked the first defender (who was not present at the scene of the disturbance) into deliberately driving her car at him”. There is, she argued, no relevant provocative act. What Miss Maguire described as the main primary facts averred are (i) Mr Rennie was a passenger in the Land Rover and (ii) he got out of the Land Rover and talked to the occupants of the Volkswagen. That, she argued, is a wholly inadequate basis for either the plea of contributory negligence or the plea of provocation.

[9] On the question of what amounts to provocation in law, Miss Maguire cited the five judge decision in Gillon v HM Advocate (Gillon), and submitted that, in order for a plea of provocation to be considered, there has to be a provoking act on the part of the victim towards the wrongdoer. The retaliation has to be related to that act and it has to be proportionate. It must not be grossly disproportionate to the actions of the victim.

[10] In conclusion, counsel submitted that the cause of Mr Rennie’s injuries was the driving of the car at him by the defender. The plea of contributory negligence is bound to fail on causation. The lack of causation also informs the provocation plea and that plea is bound to fail.

Submissions for the second defender—contributory negligence

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[11] Mr Dunlop QC, who appeared on behalf of the second defender, advanced three propositions in support of his submission that its averments on contributory negligence and provocation were fit for proof. They were that (i) notwithstanding statements of high authority to the effect that a plea under the 1945 Act requires the pre-1945 requirements of contributory negligence to be satisfied, those statements are not binding in Scotland and open to question; (ii) accepting Pritchard as the law of England, the law of Scotland is different in that, historically, provocation has been recognised as a defence, such that it may now found a plea of contributory negligence under the Act; (iii) in any event, provocation as a stand-alone defence in mitigation should proceed to inquiry.

[12] Referring to Miss Maguire’s reliance on the three pre-1945 cases, counsel challenged the notion that a defender needs to show that the “old rules” would have operated to deny the claim in order to establish that a reduction in damages is available under the 1945 Act. Mr Dunlop found support for his position in Murphy v Culhane (Murphy). The true position, suggested counsel, is that the 1945 Act does not import the entire pre-existing corpus of the law on contributory negligence, and that rather what it does is to focus on the sort of conduct which might found such a plea. In support of that proposition, Mr Dunlop referred me to McNaughton v Caledonian Railway Co, Lord Justice-Clerk Inglis at p.163, where his Lordship discusses joint fault in terms of culpa. Counsel argued that we know from Reeves that, even under English law, intentional conduct can be “fault” for the purposes of contributory negligence. The concept of culpa makes this clear under Scots law. The focus on the culpa of each party means that Scots law need not struggle with the analysis in Pritchard. If culpa is enough to found contributory negligence at common law, then culpa in the form of provocation will suffice. What the Act requires is that there should be culpa on the part of the pursuer which is a cause (not the cause) of the injury. It does not offend common sense to say that “a cause” of injury in an assault was turning up for the fight in the first place. If the pursuer is correct then a burglar does not in any way “cause” the injuries inflicted by a householder whom he disturbs. That would not make sense. Causation is classically a question of fact, to be determined on the basis

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of the evidence as a whole. It cannot be said now that there was no relevant causal role.

[13] Mr Dunlop submitted that, whilst provocation may not constitute a defence to an action of damages for assault in England, it does so in Scotland.

The principle underlying the decision in Pritchard is to be found in the judgment of Aikens LJ at para.34: “the intention to injure the plaintiff negatives all excuses”. In Scotland, however, provocation has long been recognised as at least a partial, and sometimes a complete, defence to an action of damages arising from an assault. Counsel argued that support for that proposition was to be found in the cases of Young v Allison; Miles v Finlayson; Thom v Graham; Anderson v Marshall; Ross v Bryce; and Rutherford v Chief Constable for Strathclyde Police. He referred, also, to Walker, The Law of Delict in Scotland (2nd edn), at pp.333 and 495.

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Decision and reasons

[14] The starting-point in seeking to determine whether either of the defences under consideration is bound to fail is to understand what is being said about the actings of Mr Rennie and the first defender respectively in the minutes leading up to and including the assault.

[15] Shortly prior to the attack on the Ranza Bar, Mr Rennie was a passenger in the Land Rover. The Land Rover and its occupants had been circling the area of the Ranza Bar for the purposes of assisting the occupants of the Volkswagen in a planned attack on the Ranza Bar. The Land Rover had been noticed by the first defender as it was repeatedly driven past the Ranza Bar. (Answer 4 for the second defender, para.(vi)) After the shooting, the Land Rover was brought to a halt in the eastbound carriageway of Royston Road, close to the Ranza bar. Mr Rennie got out. The Volkswagen pulled up in the offside lane of the eastbound carriageway, and Mr Rennie stood at its nearside front window. As he was standing there, he was struck by the car driven by the first defender. (Answer 4 for the second defender, para.(viii)) Angered by the attack on the Ranza Bar and those within, the first defender deliberately drove at the vehicles and the group which had alighted therefrom, including the pursuer. (Answer 4 for the second defender para.(x)).

[16] Having regard to these pleadings, in my opinion it is unnecessary either to resolve the dispute as to whether the pre-1945 rules on contributory negligence must be applied or to determine whether Pritchard ought to be followed in Scotland. On no pre- or post-1945 view of causation can it be said that anything that Mr Rennie is averred to have done caused or contributed to his injury. More particularly, on the second defender’s pleadings it could not be established that Mr Rennie’s injury was suffered “as the result partly of his own fault”. It was caused solely by his being run down by the first defender.

The defence of contributory negligence is, therefore, bound to fail.

[17] Having regard to the authorities cited by Mr Dunlop, I accept that provocation by a pursuer may operate to reduce the amount of damages recoverable by him or her for an injury caused by an assault. It is clear from the decisions, however, that it must be established that the defender was provoked by something that the pursuer did or said. There must, in other words, be a causal connection between the alleged act of provocation and the delictual response. Further, the act of provocation must be a wrongful act, otherwise an entirely innocent act which happens to anger an irrational wrongdoer would operate to exclude or mitigate damages for injury caused by the irrational wrongdoer’s unlawful act. It is necessary, therefore, to establish what behaviour on the part of the victim operated on the mind of the wrongdoer

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and to what effect. In this case, none is pleaded. It is not averred that the first defender knew that Mr Rennie was a passenger in the Land Rover. It is not averred that she saw him inside when she noticed the Land Rover passing the Ranza Bar, or that she saw him alight from it. It is not averred that she knew Mr Rennie to be an associate of, or acting in concert with the occupants of the Volkswagen. The only actings said to be causally connected with the first defender’s attack on Mr Rennie was the attack on the Ranza Bar and those inside. It was that which is said to have angered the first defender and, so angered, she drove at the vehicles and the group. It is not averred that her anger was occasioned by anything which she knew Mr Rennie to have done. I agree with Miss Maguire, therefore, that the second defender has pleaded no relevant provocative act.

[18] For the foregoing reasons, I shall appoint this action to a proof, restricted to the issue of quantum. I shall reserve all questions of expenses.

For the pursuer: Maguire QC, Euan Mackenzie, instructed by Balfour+ Manson LLP, Solicitors, Edinburgh.

For the second defender: Dunlop QC, Smith, instructed by Simpson & Marwick, Solicitors, Edinburgh.

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A COURT OF SESSION

30 October 2014

Outer House Lord Brailsford STUART HARROWER PARKER

Pursuer

B

against ELAINE MARGARET NICHOLL OR PARKER

Defender

Husband and wife—Divorce—Capital sum—Periodical allowance— Matrimonial property—Fair sharing—Exceptional circumstances— Economic advantage—Family Law (Scotland) Act 1985 (c.37), s.11 Section 8 of the Family Law (Scotland) Act 1985 provides, inter alia: “(1) In an action for divorce, either party of the marriage . . . may apply to the court for one or more of the following orders— (a) an order for the payment of a capital sum to him by the other party to the action; (aa) an order for the transfer of property to him by the other party to the action; (b) an order for the making of a periodical allowance to him by the other party to the action; ...

(2) Subject to sections 12 to 15 of this Act, where an application has been made under subsection (1) above, the court shall make such order, if any, as is— (a) justified by the principles set out in section 9 of this Act; and (b) reasonable having regard to the resources of the parties. . . .”

Section 9 of the 1985 Act provides: “(1) The principles which the court shall apply in deciding what order for financial provision, if any, to make are that— (a) the net value of the matrimonial property should be shared fairly between the parties to the marriage; (b) fair account should be taken of any ecomomic advantage derived by either person from the contribution of the other, and of any economic disadvantage suffered by either person in the interests of the other person or of the family; (c) any economic burden of caring, should be shared fairly between the persons— (i) after divorce, where a child of the marriage under the age of 16 years; ... (d) a person who has been dependent to a substantial degree on the financial support of the other person should be awarded such financial provision as is reasonable to enable him to adjust, over a period of not more than three years from— (i) the date of the decree of divorce, to the loss of that support on divorce; ...

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(e)

a person who at the time of the divorce . . . seems likely to suffer serious financial hardship as a result of the divorce . . . should be awarded such financial provision as is reasonable to relieve him of hardship over a reasonable period.

(2) In subsection (1)(b) above and section 11(2) of this Act – “‘economic advantage’ means advantage gained whether before or during the marriage . . . and includes gains in capital, in income and in earning capacity and “‘economic disadvantage’ shall be construed accordingly; “‘contributions’ means contributions made whether before or during the marriage . . .; and includes indirect and non financial contributions and, in particular, any such contribution made by looking after the family home or caring for the family.”

Section 10 of the 1985 Act provides, inter alia: “(1) In applying the principles set out in section 9(1)(a) of this Act, the net value of the matrimonial property . . . shall be taken to be shared fairly between the persons when it is shared equally or in such other proportions as are justified by special circumstances.

(2) Subject to subsection (3)(A) below the net value of the person’s property shall be the value of the property at the relevant date after deduction of any debts incurred by one or both of the parties to the marriage ... (a) Before the marriage so far as they relate to the matrimonial property . . . and (b) During the marriage . . . which are outstanding at that date. ...

(4) Subject to subsections (5) and (5A) below, in this section and in section 11 of this Act ‘the matrimonial property’ means all the property belonging to the parties or either of them at the relevant date which was acquired by them or him (otherwise than by way of gift or succession from a third party)— (a) before the marriage for use by them as a family home or as furniture or plenishings for the family home; or (b) during the marriage but before the relevant date. . ...

(6) In subsection (1) above ‘special circumstances’, without prejudice to the generality of the words, may include— (a) the terms of any agreement between the persons on the ownership of any of the matrimonial property where those funds or assets were not derived from the income or efforts of the persons during the marriage; (b) the source of the funds or assets used to acquire any of the matrimonial property or partnership property where those funds or assets were not derived from the income or efforts of the persons during the marriage; (c) Any destruction, dissipation or alienation of property by either person; (d) The nature of the matrimonial property, the use made of it (including use for business purposes or as a family home) and the extent to which it is reasonable to expect it to be realised or divided or used as a security; (e) The actual or prospective liability for any expenses of valuation or transfer of property in connection with the divorce. . . .”

Section 11 of the 1985 Act provides:

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“(1) In applying the principles set out in section 9 of this Act, the following provisions of this section shall have effect.

(2) For the purposes of section 9(1)(b) of this Act, the court shall have regard to the extent to which— (a) the economic advantages or disadvantages sustained by either person have been balanced by the economic advantages or disadvantages sustained by the other person; and (b) any resulting imbalance has been or will be corrected by a sharing of the value of the matrimonial property. . . .

(3) For the purposes of section 9(1)(c) of this Act, the court shall have regard to— (a) any decree or arrangement for aliment for the child; (b) any expenditure or loss of earning capacity caused by the need to care for the child; (c) the need to provide suitable accommodation for the child; (d) the age and health of the child; (e) the educational, financial and other circumstances of the child; (f) the availability and cost of suitable childcare facilities or services; (g) the needs and resources of the persons; (h) all the other circumstances of the case (4) For the purposes of section 9(1)(d) of this Act court shall have regard to— (a) the age, health and earning capacity the person who is claiming the financial provision; (b) the duration and extent of dependence of that person prior to divorce ... (d) the need and resources of the persons; and (e) all the other circumstances of the case.

(5) For the purposes of section 9(1)(e) of this Act, court shall have regard to— (a) the age, health and earning capacity of the person who is claiming financial provision (b) the duration of the marriage . . . (c) the standard of living of the persons during the marriage . . . (d) the needs and resources of the person; and (e) all the other circumstance of the case.”

The pursuer raised an action of divorce in respect of the irretrievable breakdown of the marriage as established by non-cohabitation for one year or more with the defender’s consent to such decree. He also asked for the transfer of the defender’s interests in a farming firm of which the parties were the partners. The defender asked for a capital sum of £800,000 and for payment of periodical allowance of £1,500 per month for a period of three years and for payment of the sum of £1,500 per month as interim aliment. The parties agreed a number of matters including the relevant date and the value of some of the matrimonial property including values of the capital accounts in the farming firm and some of the history of the firm.

There remained disputes about a number of matters including: (a) whether one-half of the pursuer’s interest as heritable proprietor in the farm and lands of Balgown fell within the definition of matrimonial property; (b) the value of the pursuer’s interest and the value of one-half of his interest at the relevant date; (c) if one-half of the pursuer’s interest formed matrimonial property, should the net value of the matrimonial property be divided equally or was unequal sharing justified by special circumstances as provided in s.10(6)(a), (b) and (d) of the Family Law (Scotland) Act 1985 (the 1985 Act), and if so

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what extent; (d) did special circumstances exist justifying unequal sharing of the parties’ respective interests in the firm of S & E Parker and, if so, to what extent; (e) whether the defender has suffered economic disadvantage as a result of capital expenditure by the firm on the farm and lands of Balgown; (f) whether the pursuer had sustained economic advantage as a result of the contributions of the defender in terms of her work for and in terms of capital expenditure of the firm of S & E Parker on the farm and lands of Balgown during the parties’ marriage; (g) whether the defender had suffered economic disadvantage in the interests of the pursuer and the parties’ children; (h) whether, and if so to what extent, the defender had supported herself and the parties’ children from capital held in her name at the relevant date. If so had she thereby suffered economic disadvantage in the interests of the pursuer and the parties’ children; (i) in the event that an economic advantage or disadvantage has been sustained had that been balanced by any economic advantage or disadvantage sustained by the other person; (j) whether the defender would require a period to adjust to the loss of the defender’s support after divorce and, if so, the period over which she would require to adjust and the amount of any periodical allowance required; what level of financial provision would be reasonable having regard to the present and foreseeable resources of the pursuer to make payment and financial provision to the defender; (k) whether it is reasonable for the whole or part of the farm and lands of Balgown to be sold in order for the pursuer to make financial provision to the defender; and (l) whether interest should be payable on any capital sum awarded to the defender and, if so, from what date and at what rate of interest.

The evidence in the case of the defender was that she had sole responsible for the upbringing of the children who were well looked after and progressing well at school. The arrangements in relation to the farm were that the pursuer’s parents had tried to arrange their affairs so that each of their three children would end up with a farm to run and the pursuer ended up owning Balgown farm but with a substantial overdraft.

Counsel for the pursuer submitted that unequal division was justified in the circumstances of the case by reference to the source of funds used to acquire the farm.

Held (1) that one-half of Balgown farm, which was acquired after the date of marriage other than by way of gift, fell to be regarded as matrimonial property (paras 30, 53); (2) that the defender had suffered economic disadvantage as a result of her efforts on the farm during the course of the marriage and that the pursuer had suffered economic advantage for the same reason and there therefore existed the possibility of departing from equal division of matrimonial property to allow for these factors and bearing in mind that the overriding principle and object was to achieve fairness, having regard to the totality of the evidence and equal division of matrimonial property would have achieved that objective (paras 32, 53); and (3) that the defender had established that she would have experienced difficulties in returning to her profession as a teacher and that she was entitled to payment of periodical allowance of £500 per month (para.54).

Cases referred to:

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Davidson v Davidson, 1994 S.L.T. 506; [2000] Fam. L.R. 43 Jacques v Jacques, (H.L.) 1997 S.C.L.R. 108; 1997 S.C. (H.L.) 20; 1997 S.L.T. 459 Little v Little, (I.H.) 1990 S.C.L.R. 47; 1990 S.L.T. 785 MacLean v MacLean, 2001 Fam. L.R. 118 Whittome v Whittome (No 1), (O.H.) 1993 S.C.L.R. 237; 1994 S.L.T. 114.

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The full circumstances of the case and the arguments of counsel had to be found in the following Opinion of the Lord Ordinary which was issued on 30 October 2013.

LORD BRAILSFORD [1] The pursuer in this action concludes for decree of divorce in respect of the irretrievable breakdown of the parties’ marriage as established by non-cohabitation for one year or more with the defender’s consent to such decree and for transfer to the pursuer of the defender’s interests in the firm of S & E Parker. The defender concludes for a capital sum of £800,000 with interest at the rate of 8 per cent per annum from 1 December 2011; for payment of periodical allowance of £1,500 sterling per month payable for three years from the date of decree and for payment of the sum of £1,500 per month as interim aliment.

[2] The parties were married in Northern Ireland on 26 September 1996.

There are two children of the marriage under the age of 16, a boy born in 2000 and a girl born in 2003.

[3] The case has been the subject of a degree of case management. As a result of that process substantial agreement has been reached between the parties in relation to the factual background of the firm of S & E Parker, a farming partnership. This agreement is reflected in a joint minute No 17 of Process. Given the importance of the matters agreed in that joint minute it is appropriate to record it in full at this juncture: “1. The parties were married at Randalstown, Northern Ireland on 26 September 1996.

2. There are two children of the parties’ marriage under the age of 16, namely . . ., born . . . 2000 and . . ., born . . . 2003.

3. The relevant date for the purposes of s.10(3) of the Family Law (Scotland) Act 1985 is 1 December 2011.

4. As at the relevant date, the parties’ matrimonial property included the following: a. The parties’ interest in the firm of S & E Parker. The parties commenced partnership in said firm on 1 December 2001 in terms of a contract of partnership signed by the parties on 17 March 2002, a true and accurate copy of which is lodged at No 6/18 of Process. The pursuer’s capital account is referred to at para.5 below. The defender’s capital account had a surplus to the extent of £49,619 at the relevant date. Notwithstanding the parties’ capital accounts, the parties were jointly and severally liable for the deficit of the partnership at the relevant date. The partnership was in deficit of £175,599 at the relevant date. b. The pursuer’s interest in 34 Main Street, Kirkcolm which had a value of £85,000 as at the relevant date. It had a value of £75,000 as at December 2013. c. The pursuer’s interest in a pension plan with Scottish Widows, with a value of £10,288 attributable to the period of the marriage. d. The pursuer’s interest in a pension plan with NFU, with a value of £24,518 referable to the period of the marriage. e. £147.00 held in account number 00108747 with HBOS plc in the name of the pursuer. f. £765.57 held in the defender’s Royal Bank of Scotland account number 00135506. g. The jointly owned contents at Balgown Farmhouse. h. £6,454.82 held in the defender’s Royal Bank of Scotland ISA account number 00624841 (7/18).

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The defender’s NFU Mutual stakeholder pension with a cash equivalent transfer value of £4,653.44 as at the relevant date.

(7/13).

5. The pursuer’s capital account in the firm of S & E Parker referred to at para.4(a) above was in deficit of £225,218 at the relevant date. Prior to the parties commencing a partnership on 1 December 2001, the pursuer traded as a sole trader, trading as G & S Parker. As at 31 December 2000, the balance sheet of the said G & S Parker included the farm and lands of Balgown in the accounts at a value of £788,510 (6/23(5)). As at 31 December 2000, the pursuer’s capital account was a surplus of £599,653 (6/23(3)). Clause third of the contract of partnership hereinbefore referred to between the parties provided for the preparation of a balance sheet as at 31 December 2001 to be adopted by the parties as containing a correct statement of the assets and liabilities of the business and of the position of the partners’ accounts as at the commencement of the firm. Clause eleventh of the said contract provided that the title to the farm and lands of Balgown was in the name of the pursuer as an individual and was not an asset of the partnership. In the said balance sheet as at 31 December 2001, the farms and lands of Balgown were treated as having been disposed of by the partnership with the disposal being attributed wholly to the pursuer (6/24(7)). As at 31 December 2001, the pursuer’s current account was in deficit of £130,530 and the defender’s current account was in surplus of £25,660. Capital expenditure in the form of improvements to the farm and lands of Balgown was carried out by the firm of S & E Parker and is listed in the schedule prepared by Galbraith Pritchard, Chartered Accountants for the firm of S & E Parker at No 7/7 of Process and included in the firm’s accounts as additions to land and buildings as follows: a. To the year end 31 December 2001, £16,757 (6/24(5)); b. To the year end 31 December 2002, £34,521 (6/25(12)); c. To the year end 31 December 2003, £5,163 (6/26(12)); d. To the year end 31 December 2007, £869 (6/30(11)); e. To the year end 31 December 2009, £62,772 (6/31(11); f. To the year end 31 December 2010, £1,408 (6/33(11)): and g. To the year end 31 December 2011, £4,256 (6/46(11)).

The capital expenditure was to the benefit of the pursuer as owner of the farm and lands of Balgown. In arriving at the deficit on the pursuer’s capital account of £225,218 as at the relevant date referred to above, the total additions of £125,746 have been deducted from his capital account.

6. As at 30 November 2013, the defender’s capital account in the firm of S & E Parker had a surplus to the extent of £32,647.

7. The pursuer’s father was a partner of the firm of Hugh Parker & Sons together with the pursuer’s grandparents and uncle. The firm of Hugh Parker & Sons acquired title to Balgown Farm in 1964. A true and accurate copy of the relevant disposition is lodged at No 6/4 of Process.

8. The pursuer’s parents commenced trading in partnership as G & S Parker with effect from 1 January 1978. They entered into a contract of co-partnery on 21 April 1978, which contract was registered in the Books of Council and Session on 25 May 1978. A true an accurate copy of the said contract of co-partnery is lodged at No 6/5 of Process.

9. The firm of G & S Parker acquired the farm of High Ervie in 1981. A true and accurate copy of the relevant disposition is lodged at No 6/7 of Process.

10. The pursuer’s parents assumed their three sons, Robert, Ian and the pursuer, as partners of the firm of G & S Parker with effect from 1 October 1987. A true and accurate copy of the minute of agreement in terms of which the pursuer and his brothers were assumed into the partnership is lodged at No 6/6 of Process.

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11. In 1988, the pursuer and his brother acquired Drumdow Farm. A true and accurate copy of the relevant disposition is lodged at No 6/8 of Process. The farm was operated by the firm of G & S Parker. The search sheet relative to the said farm is lodged at No 7/9 of Process.

12. With effect from 30 November 1992, the pursuer’s brother, Robert retired from the partnership of G & S Parker. His retiral from the partnership was regulated by a minute of agreement entered into between the partners of the firm dated 4 December 1992 and registered in the Books of Council and Session on 30 December 1992. That minute of agreement also varied the terms of the original Contract of Co-Partnery. Inter alia, it was agreed that Drumdow Farm would no longer be operated by the partnership. A true and accurate copy of the said minute of agreement is lodged at No 6/9 of Process. In 1995, the pursuer and his brother, Ian, disponed their interest in Drumdow Farm to Robert with entry as at 31 December 1992. They did so in part implement of their agreement. A true and accurate copy of the relevant disposition is lodged at No 6/11 of Process.

13. The pursuer’s parents gifted to Ian and the pursuer a one quarter pro indiviso share each in Balgown Farm by disposition dated 18 November 1994 and recorded in the General Register of Sasines for the County of Wigtown on 27 March 1995 and gave entry as at 31 December 1992. A true and accurate copy of the said disposition is lodged at No 6/10 of process. The effect of the disposition in favour of the pursuer and Ian, was that the pursuer’s parents, Ian and the pursuer each held a one-quarter pro indiviso share in Balgown Farm.

14. The pursuer’s brother, Ian acquired Broadfield Farm in his sole name on 16 April 1996. A copy of the relevant disposition is lodged at No 6/12 of Process. A sum of £213,900 exclusive of VAT was paid for the property.

15. The pursuer’s parents made capital transfers through the firm of Messrs G & S Parker to the pursuer and Ian in the financial year ending 31 December 1996. The pursuer and Ian each received capital transfers of £94,726. Personal drawings and the said capital transfers taken by the pursuer’s parents reduced their capital accounts in the said firm to nil. As at 31 December 1995, the pursuer’s capital account stood at £71,803. In the financial year ending 31 December 1996, his share of profit was £23,639 and his personal drawings were £15,990. Taking into account the capital transfer from his parents, the pursuer’s capital account stood at £173,728 as at 31 December 1996. As at 31 December 1995, Ian’s capital account stood at £73,074. In the financial year ending 31 December 1996, his share of profit was £23,239 and his personal drawings were £241,402. Taking into account the capital transfer from his parents, the effect of same was to leave Ian’s capital account in deficit of £50,813 as at 31 December 1996.

(7/5) 16. The pursuer’s parents resigned from the partnership with effect from 31 December 1996.

17. By disposition dated 30 May 1997 and recorded in the General Register of Sasines for the County of Wigtown on 30 June 1997 and giving entry as at 31 December 1996, the pursuer’s parents gifted their remaining interest in Balgown Farm equally between the pursuer and Ian. Certain fields were excepted therefrom in terms of a disposition by the pursuer’s parents in favour of his brother, Robert. A true and accurate copy of the said disposition is lodged at No 6/14 of Process. The effect of the disposition in favour of the pursuer and Ian was that the pursuer and Ian each held a one-half pro indiviso share in the property. A true and accurate copy of the relevant disposition is lodged at No 6/13 of Process.

18. The pursuer’s brother, Ian, retired from the partnership with effect from 31 October 1997, leaving the pursuer the sole proprietor of the business of G & S Parker. The terms upon which he retired from the partnership and upon which Ian’s interest in Balgown Farm was transferred

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to the pursuer are contained within a minute of agreement dated 18 December 1997. A true and accurate copy of the said minute of agreement is lodged at No 6/15 of Process.

19. In part implement of the said minute of agreement of 18 December 1997, by disposition dated 18 December 1997 and registered in the Land Register on 30 January 1998 Ian and the pursuer, as heritable proprietors each to the extent of one-half pro indiviso, conveyed the farm and lands of Balgown to the pursuer alone. The date of entry was 31 October 1997.

Stamp duty was paid on transfer of Ian’s interest. A true and accurate copy of the relevant disposition is lodged at No 6/16 of Process. The land was registered under title number WGN497. A true and accurate copy of the land certificate is lodged at No 6/17 of Process.

20. In part implement of the said minute of agreement of 18 December 1997 and in particular clause two thereof, the pursuer granted a standard security over the farm and lands of Balgown in favour of Ian on 2 June 2000. A copy of the standard security granted by the pursuer is produced at No 7/10 of Process.

21. In part implement of the said minute of agreement of 18 December 1997, the pursuer obtained an overdraft with Royal Bank of Scotland in his sole name to repay the overdraft of the firm of G & S Parker. On 26 January 1998, the pursuer transferred £400,702.86 from account number 00151439 in the name of Stuart Harrower Parker T/A G & S Parker into account number 00236299 in the name of the firm of G & S Parker (6/53 (statement 5) and 6/52 (statement 503) of process). The pursuer granted a new standard security over the farm and lands of Balgown in favour of the Royal Bank of Scotland on 30 January 1998. That standard security remained in place as at the relevant date and is in place as at January 2014.

22. True and accurate copies of accounts for the firm of G & S Parker for the financial years ending 31 December 1994–1997 (inclusive) are lodged at Nos 7/3–6 of Process.

23. True and accurate copies of accounts for the pursuer’s sole trading business, Stuart H Parker, trading as G & S Parker for the financial years ending 31 December 1998–2001 (inclusive) are lodged at Nos 6/21–6/24 of Process.

24. True and accurate copies of accounts for the firm of Messrs S & E Parker for the financial years ending 31 December 2002–2012 (inclusive) are lodged at Nos 6/25–6/33, 6/46 and 6/35 of Process.

25. The defender had a balance of approximately £15,000 on a Royal Bank of Scotland Bonus 30 annual account number 00680245 as at the relevant date and currently. These sums emanated from funds inherited by the defender following the death of her mother (7/19-22).”

F

[4] In addition to agreement in relation to these factual matters, the pursuer and defender had each lodged prior to the proof a “Note of dispute of issues” in which they identified what they considered to be the matters which required determination by the court. There was broad agreement between the parties as to the issues in dispute between them. These may be summarised as follows:

G

(a) Whether one-half of the pursuer’s interest as heritable proprietor in the farm and lands of Balgown falls within the definition of matrimonial property; (b) The value of the pursuer’s interest and the value of one-half of his interest at the relevant date; (c) If one-half of the pursuer’s interest forms matrimonial property, should the net value of the matrimonial property be divided equally or is unequal sharing justified by special circumstances as provided in s.10(6)(a), (b)

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(g) (h)

(i) (j)

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and (d) of the Family Law (Scotland) Act 1985 (the 1985 Act), and if so to what extent; Do special circumstances exist justifying unequal sharing of the parties’ respective interests in the firm of S & E Parker and, if so, to what extent; Whether the defender has suffered economic disadvantage as a result of capital expenditure by the said firm on the farm and lands of Balgown; Whether the pursuer has sustained economic advantage as a result of the contributions of the defender in terms of her work on the farm and in terms of capital expenditure by the firm of S E Parker on the farm and lands of Balgown during the parties’ marriage; Whether the defender has suffered economic disadvantage in the interests of the pursuer and the parties’ children; Whether, and if so to what extent, the defender has supported herself and the parties’ children from capital held in her name at the relevant date. If so has she thereby suffered economic disadvantage in the interests of the pursuer and the parties’ children; In the event that an economic advantage or disadvantage has been sustained has that been balanced by any economic advantage or disadvantage sustained by the other person; Whether the defender will require a period to adjust to the loss of the defender’s support after divorce and, if so, the period over which she will require to adjust and the amount of any periodical allowance required; what level of financial provision would be reasonable having regard to the present and foreseeable resources of the pursuer to make payment and financial provision to the defender; Whether it is reasonable for the whole or part of the farm and lands of Balgown to be sold in order for the pursuer to make financial provision to the defender; and Whether interest should be payable on any capital sum awarded to the defender and, if so, from what date and at what rate of interest.

[5] The foregoing issues require to be determined having regard to the principles enunciated in the 1985 Act. The relevant provisions are as follows: [His lordship quoted the sections as set out above and continued:] [6] At the proof the pursuer gave evidence. His brother Ian Parker gave evidence in relation to the background of the farming partnership of S & E Parker. A chartered surveyor, Ms Claire Maxwell gave evidence and produced a valuation relative to the farm of Balgown on behalf of the pursuer. Additional evidence in relation to the value of that property was adduced by the pursuer from Alan Paterson, a senior land agent. Mr Seamus Donnelly, a consultant with the Scottish Agricultural College, gave evidence in relation to a whole term review of Balgown he had prepared. Lastly, evidence was adduced by the pursuer from Mr Lyle Millar, CA, a partner in the firm of accountants who had acted for both the pursuer and the firm of S & E Parker for the entire period relative to this action. The defender gave evidence herself and adduced valuation evidence in relation to the farm at Balgown from Matthew Bell, chartered surveyor and Alistair McMillan, a property adviser. A further witness, Mr David Allen, a retired agricultural consultant, gave brief evidence in relation to the work undertaken by the defender during the currency of the marriage on the farm at Balgown.

[7] In relation to the marriage there was very brief evidence, and very little disagreement between the pursuer and the defender. There was agreement that the parties had ceased to cohabit on 1 December 2011. The pursuer had

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removed from the matrimonial home, which was the farmhouse at Balgown and taken up residence in a nearby cottage property that he owned, albeit that he continued to work full time on the farm and was present there on a daily basis. The defender remained with the two children in the farmhouse. That situation pertained at the date of the proof. The pursuer indicated that there was no formal arrangement for him to see the children but that he tried to see them about once a week. He said that he saw them around the farm when he was working there and indicated that this might be for as little as five or ten minutes or as much as perhaps half an hour. He said that he made efforts to communicate with them but that they “didn’t respond to me”. He was not seeking any order in relation to contact with the children. All this was confirmed by the defender. She indicated, in evidence that was not challenged, that she had sole responsibility for the care and upbringing of the children.

She attended to all their material needs, took them to and from school and the various social and sporting activities which they engaged in. The children were well looked after, content and were progressing well at school.

[8] The pursuer gave evidence as to his and his family’s history in relation to Balgown Farm, this evidence was not surprisingly unchallenged, but was in any event confirmed at least in part from material in the joint minute. The pursuer’s grandfather came to the farm in about 1926 as a tenant farmer. He had three sons, one of them the pursuer’s father. At some time after 1926 a farming partnership was created named “Hugh Parker & Sons” in which the partners were apparently both the pursuer’s grandparents, his father and an uncle. That farming partnership acquired title to Balgown Farm in 1964 (para.7 of the joint minute). Hugh Parker & Sons appear to have continued to farm Balgown until by contract of co-partnery with a commencement date of 1 January 1978 the pursuer’s parents commenced trading in partnership with the firm name “G & S Parker” (para.8 of the joint minute). In 1981 the firm of G & S Parker acquired the farm of High Ervie (para.9 of the joint minute) which was about one and a half miles from Balgown. Thereafter the two farms appear to have been farmed as one farming unit.

[9] The pursuer left school in about 1982 and immediately began work on the farming unit of Balgown and High Ervie. At this time his parents were also involved in the farming operation as were his two elder brothers. The unit was worked very much as a family farm with all members of the family working thereon. With an effective date of 1 October 1987 the pursuer’s parents assumed their three sons as partners in the firm of G & S Parker (para.10 of the joint minute). In 1988 the pursuer and his brothers acquired another local farm, Drumdow Farm (para.11 of the joint minute). This farm neighboured Balgown Farm and, albeit owned by the brothers, was operated as part of the farming unit by G & S Parker.

[10] The next major change occurred with effect from 30 November 1992 when the pursuer’s brother, Robert Parker, retired from the partnership of G & S Parker (para.11 of the joint minute). As part of the agreement regulating Robert’s retiral from the partnership it was agreed that Drumdow Farm would no longer be operated by the firm. Subsequently in 1995 the pursuer and his brother Ian Parker, disponed their interest in Drumdow Farm to Robert Parker, albeit with a deemed date of entry as at 31 December 1992. At the same time as Robert Parker went his way with Drumdow Farm the pursuer’s parents gifted to him and his brother Ian a one-quarter pro indiviso share in Balgown Farm albeit this was formalised by a deed dated 18 November 1994 (para.13 of the joint minute). The situation after 31 December 1992 therefore was that Balgown Farm continued to be run by the firm of G & S Parker, with

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the pursuer and his brother Ian having a one-quarter interest in the firm property. At this stage the farm of High Ervie remained a part of the farming operation centred at Balgown Farm.

[11] The next major re-organisation of the business of G & S Parker occurred in 1996. The pursuer’s evidence was that in anticipation of his marriage Ian Parker wished to acquire a farm of his own. The pursuer and Ian Parker also spoke in this connection with the wishes and intention of their parents. That intention was that each of the three sons of Mr and Mrs Parker senior should acquire a farm of their own. The mechanics of how their wish was achieved so far as the pursuer and his brother Ian were concerned is set forth in paras 14–21 of the joint minute. It has to be said that notwithstanding the terms of the joint minute in evidence neither the pursuer nor Ian Parker were able to explain how exactly their parents’ objective was to be achieved beyond a general intention that the farm at Balgown should in some way or another provide the vehicle to achieve that objective. Part of the objective of Mr and Mrs Parker senior had, by 1996, been achieved with the provision of Drumdow Farm as a property and business for Robert Parker. On 16 April 1996 the pursuer’s brother Ian Parker acquired for a consideration of £213,900 Broadfield Farm in Lanarkshire. The evidence was that Broadfield Farm was to provide both a business and residence for Ian Parker and his wife. At the time of acquisition Broadfield Farm lacked a suitable farmhouse and also lacked the necessary sheds and buildings required for the operation of a dairy farm. These were accordingly built, the cost of such works coming, on the evidence of the pursuer, from the account of the firm of G & S Parker. At about this time, in the spring of 1996, there was discussion between the partners of G & S Parker as to the future of the business. The tenor of that discussion appears on the evidence to have been in the nature of a family settlement. It also emerged from the evidence that as a matter of fact the person with the ultimate say in how any distribution of assets would be achieved was the pursuer’s father. The upshot of these discussions was that High Ervie Farm was sold. Mr and Mrs Parker resigned from the partnership of G & S Parker with effect from 31 December 1996. By disposition dated 30 May 1997, but with date of entry as at 31 December 1996, Mr and Mrs Parker senior gifted their remaining interest in Balgown Farm equally between the pursuer and Ian Parker. Thereafter the stock and farming equipment at Balgown were divided equally between the pursuer and Ian Parker. Ian Parker retired from the partnership with effect from 31 October 1997 leaving, at that stage, the pursuer as the sole proprietor of the business of G & S Parker.

[12] The pursuer’s evidence into the exact nature of the transactions involving himself, his parents and his brother Ian Parker relative to Balgown Farm in 1996 and 1997 was, regrettably, not precise. Insofar as I could determine the nature of his evidence was that the transactions all formed part of an arrangement, the object of which was the furtherance of his parents’ desire and intention that each of their three sons should obtain a farm. The pursuer’s evidence was that in the Spring of 1996, after his brother Ian Parker had bought Broadfield Farm, the family discussed splitting up of the farms.

The cattle and farm equipment was split down the middle. An outside valuation of the farm stock and equipment was obtained to use as a guide. A value was also obtained in relation to Balgown Farm, although no valuation was produced at proof and the pursuer was unable to give precise evidence as to its contents. The best he could remember was that Balgown Farm was valued at “about £800,000”. He also remembered that he required to obtain

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an overdraft and also “wrote a cheque for £450,000 on the G & S Parker account” as a means of effecting the transaction. He was aware that his brother Ian was “not very happy” with the transaction, presumably because he thought he was doing less well out of the arrangement. There was some delay, presumably as a result of his brother’s discontent with the arrangement, in a disposition transferring the farm to the name of the pursuer. The relevant disposition discloses that the transfer was “For certain good causes” without further specification. The pursuer was unaware as to why this language was used, the technicalities of the disposition were matters he left to “the lawyers”.

He did state that the firm’s accountants and lawyers gave advice on the transaction. It was also clear that the ultimate arbiter of who got what was his father. The pursuer’s understanding ultimately resolved to the position that he ended up owning Balgown Farm, but also had the burden of a substantial overdraft. His brother, Ian, ended up with Broadfield Farm in Lanarkshire and in addition acquired half the stock and equipment from Balgown.

Broadfield Farm was substantially smaller than Balgown, but his brother was not burdened with the overdraft which the pursuer had undertaken in order to give effect to these arrangements.

[13] The pursuer thereafter gave evidence about his relationship with his wife, the defender and her involvement in Balgown Farm. He indicated that his wife came from Northern Ireland and was a teacher. She moved to Scotland when they married. For a short period after the marriage, to be measured in months, she taught in Stranraer Academy. The pursuer’s position was that his wife did not enjoy teaching after the marriage and gave it up after perhaps two or three months. He stated that he neither encouraged her nor discouraged her with that course. The pursuer accepted that after she gave up teaching his wife assisted him on the farm, albeit his evidence was that her contribution was limited. He said that she helped him to feed the calves. He also said that she kept the books of the farm for a while, but did not do this job very well.

He said that there came a time when the firm’s accountants complained that the books were not kept in an adequate fashion. He accepted that the accountants gave his wife some advice and instructions on the keeping of books, but that despite such intervention he ultimately required to employ a bookkeeper. In relation to her assistance with the rearing of calves, he said this was not full time and involved no more than half an hour in the morning and a similar time in the evening. That task had, in any event, been made easier during the course of the marriage when he purchased an automatic feeder.

The calf-rearing task did not involve the whole year, only the period September through May in each year. He also said that his wife’s involvement in the farm reduced after the birth of the children. He did accept that it was her responsibility to look after the family house, which was the farmhouse, and care for and look after the children.

[14] In terms of a contract of partnership dated 17 March 2002 with effective dates from 1 December 2001, the pursuer and defender entered into a contract of partnership in respect of the farming business of “S & E Parker” carried on at Balgown Farm. In terms of that partnership the parties agreed that the title to the farm of Balgown remained in the name of the pursuer as an individual and that the heritable property of the farm was not an asset of the partnership. The contract further agreed that the profits and losses of the firm shall be apportioned in favour of the pursuer to the extent of 55 per cent and the defender to the extent of 45 per cent. The pursuer explained that the partnership was entered into on the advice of “the accountants and lawyers” which was given, insofar as he understood it, for tax purposes.

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[15] In relation to proposals for the future, the pursuer indicated that he proposed paying £525 per month for each child of the marriage. As at the date of proof, the defender remained a partner in the firm of S & E Parker and had up until that time continued to draw her share of the profits, which she used to maintain the farmhouse and pay for her own support and that of the children. The partnership is to be dissolved and it was the pursuer’s intention to continue to farm Balgown as an individual. He was currently residing in a cottage property adjacent to the farm which he owned. This property had a capital value in the order of £170,000. It was his intention that it should be available in the future for use by a dairyman. The pursuer accepted that the defender and the children required a place to live. He had been shown particulars of properties, produced by both his solicitors and the defender, which purported to show houses which would be suitable for the defender and the children. These properties had a span of value between about £190,000 and £270,000. His stated view in evidence was that there were properties in the area on sale for about £230,000, which would provide suitable accommodation for the defender and the children. He was prepared to provide the funding of such a property. He had had discussions with his bank and a letter was produced, which indicated that the bank would be prepared to advance him, by way of loan, the sum of £280,000. He did not consider that he should expend all of that money in purchasing the defender a house. His position was that some reserve had to be maintained because of work which was necessary on the farm. In that regard he had already had communication from SEPA indicating that the present slurry pond on the farm was inadequate and would require to be improved. The milking parlour, although adequate, was also in need of modernisation. In order to retain the productive capacity of the farm attention, and capital expenditure, would be required for these matters. The pursuer did not appear to have seriously considered a proposal made by the defender to split the farm. When asked about this, he indicated he did not consider it viable.

[16] The pursuer’s evidence in relation to the events surrounding the farm property at Balgown in 1996 and 1997 was broadly confirmed in evidence by his brother Ian Parker.

[17] The pursuer’s mother, Mrs Elaine Parker, swore an affidavit which was lodged in process. The defender did not challenge this affidavit by seeking to cross-examine the deponent. The affidavit was brief, the relevant paragraph being in the following terms: “I give this affidavit to confirm to the court that Stuart’s late father, my husband, John Dunlop Parker, always said he did not wish his sons to be beholden to other people. It was his firm intention that each of his sons would own their own farm and be in charge of that. Throughout our marriage we worked extremely hard, not spending significant amounts of money, towards that goal. This was to ensure that we could give our sons this privilege.”

[18] The pursuer adduced evidence from Seamus Donnelly, a senior consultant and area manager with the Scottish Agricultural College in Stranraer. Mr Donnelly knew the pursuer and had prior to his involvement in the current case undertaken work on his behalf. For the purposes of this litigation he prepared a “Whole farm review” dated 18 December 2013 of Balgown Farm, the purpose of which report was to identify likely future capital expenditure requirements for the farm and to address any issues pertaining to farm management which he could identify as a result of his investigations.

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[19] As a result of his investigation he identified problems in relation to the limited slurry storage capacity available on the farm, potential problems in relation to dated parlour facilities and consequent inefficiencies in farm operation and the desirability to invest in the machinery employed in the farm operation. He formed the view that with its current level of output based on the size of the dairy herd there were problems in generating sufficient income to address these capital requirements. He also expressed concern in relation to the overall debt burden accrued by the farming partnership and the risk ongoing caused by the level of debt particularly in the event of interest rates rising.

[20] Ms Claire Maxwell valued Balgown Farm on behalf of the pursuer.

Ms Maxwell is a member of the RICS employed by John Neil, Rural Land Agents and Valuers, Castle Douglas. She inspected the farm premises on 18 March 2013 and prepared a report dated 3 April 2013 which was lodged as a production in the case (No 6/56 of Process). The subjects were valued as at 4 December 2011 and as at the date of her inspection. The valuation of the farm was on a market value basis.The subjects were described as an agricultural unit with a single residential dwelling extending to 404.65 acres currently used as a working dairy farm. The farm was noted to be split into three areas by a public road and a private track with the house and the steading in the north of the subjects. The farm was said to be currently milking a 170 dairy cow herd with some silage production also undertaken. Ms Maxwell described the land as appearing “to be in generally good heart throughout” although on inspection she noted “wet areas” which “along with the presence of rushes” suggested to her potential drainage issues. In addition to her report Ms Maxwell produced four further documents (Nos 6/57–60 of Process) being; a schedule of properties which she considered were appropriate comparables to assist in her valuation of Balgown Farm: a survey produced based on a map showing her breakdown of Balgown Farm into fields, with each field numbered; two tables, one dated as at 4 December 2011 the other at 18 March 2013 of the fields as identified on her map, acreages for each field and the land class she attributed to each field, and the value ascribed to each field. The method of valuation employed was to identify the various land types on the farm and then attribute each area to a class using the system and guidelines for land capability for agriculture employed by the Macaulay Institute. This form of land classification is the system widely used in Scotland by agriculturists, planners, estate agents and others as the basis of valuation of agricultural land.

The classification of the farm lands by use of that method gave a base value per acre for each of the constituent land types of the farm and thereafter a base valuation of the farm premises. Ms Maxwell thereafter applied a “Comparable valuation method” to arrive at a final value. Applying the methodology I have described Ms Maxwell valued the property at the figure of £1,480,000 as at 4 December 2011 and £1,450,000 as at 18 March 2013.

[21] The pursuer produced and relied upon a further valuation of Balgown Farm. This second report was dated 11 December 2013 and was prepared by Mr Alan Paterson (No 6/43 of Process). Mr Paterson was employed as a senior land agent by Wallets Marts Castle Douglas Ltd, he was not a member of the RICS but his report was stated to be “verified by” a Mr Atkinson of Wallets who was a Fellow of the RICS. In evidence Mr Paterson stated that he often valued farms and adopted the method of having his valuation verified by other employees of Wallets who were members or Fellows of the RICS. Mr Paterson had inspected Balgown Farm for the purposes of preparing his report. In common with Ms Maxwell Mr Paterson’s valuation was produced on a market

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value basis. His description of the farm was broadly similar to that given by Ms Maxwell, albeit with more detail. In relation to the agricultural land he expressed the view that this: “ranges from arable land classified 32 within the Macaulay Scale for land capability up to wetland and moorland which classifies 51 within said scale.

It is noted by the inspecting reporter that the wide range and the quality of land includes rocky outcrops, wetland and moorland which at present is not drained or farmed”.

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He described the land as appearing “to be in reasonable heart adequately fenced and watered”. He noted that the farm steading buildings were a mixture of traditional and modern structures and that their condition was commensurate with their age. He considered that the slurry/waste and effluent system on the farm was limited and took note that SEPA had placed notification that the slurry tower should be renewed or refurbished. He himself considered that the milking parlour would require to be renewed or refurbished in what he described as the “medium term”. In relation to the farmhouse he observed that he was not granted access for valuation purposes. Mr Paterson also had regard to comparable evidence and to this end produced a schedule detailing ten properties which he considered provided guidance as to a valuation of Balgown Farm. Mr Paterson’s valuation as at 4 December 2011 was £1,600,000. As at 10 December 2013 his valuation was in the sum of £1,800,000.

[22] Mr Lyle Millar CA had been the accountant for the farming partnership in its various guises for many years. He had prepared the accounts of the partnership for many years. He remembered being involved in the rearrangement of the farming business when the pursuer’s parents retired and the pursuer’s brother set up his own farming business. In evidence he stated that having regard to the passage of time, it was difficult for him to throw too much light on the precise nature of the arrangements simply from the accounts and bank statements which he had had access to. He had no precise recollection of the details of the transactions. What he did have a reliable memory of was that the pursuer’s father, Mr George Parker, was very firmly in control of the process. The arrangements effected were designed to reflect the wishes of Mr George Parker that both his sons should be set up in their own farming businesses and that that then existing farming partnership and its property should be the vehicle to achieve this. In Mr Miller’s words “Mr George Parker was still calling the shots, very much so.”

[23] The defender’s evidence in relation to the marital background and factual matters relating to the children of the marriage did not vary substantially from the narrative given by the pursuer. The areas where there were differences in detail were confined to her account of her contribution, in terms of work input, to the farming partnership with her husband and to her ability to work in the future and the type of property which she and the children would require for their accommodation in the future.

[24] So far as her working history was concerned, she confirmed that she qualified as a teacher in Northern Ireland and on marriage came to Scotland where she registered as a teacher. She could not obtain full-time employment and accordingly undertook supply teaching for a period, apparently in Stranraer Academy. She indicated that opportunities for work as a supply teacher were sporadic and, in any event, from the outset she had a lot of work to do on the farm. The combination of inconsistencies in opportunities to work as a supply teacher and her own unavailability due to farm commitments

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meant that it was impracticable to pursue this route. She accordingly devoted herself to farm work. So far as she was aware, she remained registered as a teacher in Scotland but had not worked in this capacity since before the birth of her first child in 2000.

[25] In relation to farm work, the principal difference between her evidence and that of the pursuer was, perhaps not unsurprisingly, in relation to the amount of work she actually undertook. The defender maintained that she was responsible for feeding the calves on the farm, a task which she said occupied approximately an hour and a half each morning and again for the same period of time in the evening. Beyond this she undertook what she described as general farm work of which, she said, there was a lot. In addition she did at one stage attempt to look after the farm’s books albeit, as she accepted, this was not something which was ultimately successful. In addition to these duties she stated, and this was not disputed by the pursuer, that the care and upbringing of the parties’ two children devolved almost entirely to her. She was responsible for all child-rearing tasks and, when the children began to attend nursery and school, taking them to and from those venues. In addition she was responsible for organising and taking them to all sporting and extracurricular activities. This position pertained at the date of proof, I have already noted the pursuer’s own evidence where he accepted that his contact with the children was limited to when he encountered them on and around the farm.

[26] The defender accepted that she was not wholly familiar with the arrangements regarding the reorganisation of the farming business in 1996/97.

She was able to give evidence to the effect that the relationship between the pursuer and his brother was strained at this time. Her understanding of the situation was that this arose from Ian Parker’s belief that he had fared less well than his brother, the pursuer, had in the rearrangement of the farming business. She was aware that at a later date she had become a partner in a new farming partnership with her husband but did not dispute that this was on advice tendered by the accountants that it was beneficial for tax purposes to adopt this structure. She was also aware that the pursuer had incurred what she described as a “huge overdraft” to fund the new partnership. She stated in evidence that one of the reasons that she had given up teaching to devote more time to working on the farm was to help in the attempt to clear or reduce this liability.

[27] In relation to her accommodation needs she first of all stressed that the farmhouse where she and the children continued to reside had been thoroughly modernised at her instigation and under her direction. She did not appear to dispute that the farmhouse was either essential, or at least a desirable adjunct to the operation of the farm. She did not appear to object in principal to requiring to remove from these premises and obtain alternative accommodation.

She wished accommodation in a rural setting but within easy travelling distance from Stranraer. Her reasons were that the children had been brought up in a rural environment on the farm and would be more used to this type of accommodation setting. She required to be close to Stranraer because that was where both children attended school. Both children were at an age where they had a lot of extracurricular activities and she therefore required to be in and out of Stranraer on a regular basis. She was also anxious that any accommodation purchased should be relatively close to the farm as she considered it desirable and in the best interests of the children that they maintained contact both with their father and with the place and home they had known throughout their lives.

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[28] In relation to the value of the farm, the defender relied upon the evidence of Mr Mathew Bell, a chartered surveyor employed by H & H Land & Property. Mr Bell produced two reports, an initial report based upon an inspection of Balgown Farm on 25 April 2013 (No 7/1 of Process) and a supplementary report dated 16 January 2014 (No 7/40 of Process). Mr Bell’s evidence was supported by evidence from Mr Alistair McMillan, who although not a chartered surveyor, had worked as a property valuer and assessor in the south west of Scotland for many years, latterly with H & H Land & Property.

He had very considerable experience and a long history and knowledge of land and farm sales’ transactions in the area. Mr McMillan did not produce a report but indicated that he had seen Mr Bell’s report (No 7/1 of Process). Mr Bell had carried out a RICS red book valuation and was an RICS registered valuer.

His valuation was one which would be relied upon by lenders. Mr Bell’s description of the extent of the farmlands coincided with that of Ms Maxwell.

His description of the farmhouse was consistent with that of Ms Maxwell, albeit he had the advantage of internal inspection of the subjects. His description of the farm buildings was broadly consistent with that of Ms Maxwell. In relation to the farmland he expressed the view that, “The soils on the holding comprise of the Macauley Institute for Soil Research Group 3.”

He noted that, “There are certain areas of land which had suffered from the recent poor weather but will easily recover with some minor drainage work.” In relation to market conditions he observed: “The current market for large dairy farms, like Balgown Farm in this particular area is good. The number of people bidding to purchase large modern well-equipped dairy farms is increasing. The property is such that it would be attractive to local, regional and even national buyers and would in the event of sale be best marketed as a whole. It would be possible to lot a couple of the outlying fields to provide some flexibility in marketing.”

His valuation of the property at 4 December 2011 was £2,200,000. His valuation as at 25 April 2013 was £2,250,000. Mr McMillan had conducted a similar exercise, albeit without adopting such a technical approach to land valuation. In essence he considered that Mr Bell’s valuation of £2.2 million at the relevant date was fair and accurate.

[29] As already noted the parties in advance of the proof identified a number of issues (see para.4 hereof). I propose to deal with these issues in a different order from that set out by the parties. The first of these issues I address was whether one-half of the pursuer’s interests as heritable proprietor in the farm of Balgown falls within the definition of matrimonial property. The pursuer’s submission based on the evidence was that it did not, by contrast the defender submitted that it did.

[30] The relevant statutory provision is section 10(4) of the 1985 Act which defines matrimonial property as: “. . . all the property belonging to the parties or either of them at the relevant date which was acquired by them or him (otherwise then by way of gift or succession from a third party)—

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... (b) during the marriage but before the relevant date.”

The pursuer is the owner of Balgown Farm. The way in which he acquired ownership of this property emerges clearly from the evidence and the joint minute. In 1994 the pursuer and his brother Ian were each gifted by their parents a one-quarter share of the property (para.13 of the joint minute). By

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disposition dated 30 May and recorded in the General Register of Sasines on 30 June both days in 1997 but with a date of entry at 31 December 1996 the pursuer’s parents gifted their remaining interest in Balgown Farm to him and his brother Ian (para.17 of the joint minute). The pursuer and his brother then entered into a minute of agreement dated 18 December but with an effective date of 31 October both days of 1997 whereby Ian agreed to transfer his one-half share in the farm to the pursuer (para.18 of the joint minute). This agreement was given effect to by a disposition dated 18 December 1997 recorded in the General Register of Sasines on 30 January 1998 (para.19 of the joint minute). It is clear from this that the pursuer acquired a one-half interest in the property by way of gift and subsequently acquired the remaining half interest in the property by means of disposition in 1997. The parties were married on 26 September 1996. The parties are agreed that the relevant date is 1 December 2011. At that latter date the pursuer continued to have an interest in the property. It follows that by application of the statutory test the pursuer acquired one-half of the relevant property during the marriage but before the relevant date. The only qualification to be considered is whether that property was acquired “by way of gift or succession from a third party”.

As the defender noted in submission the pursuer did not offer to prove that the property was acquired by either of these methods. It also seems clear from the evidence which I have narrated that the property was not acquired by either of these means. It follows that I am of the view that one-half of the pursuer’s interest in Balgown Farm falls to be regarded as matrimonial property.

[31] The next question for determination is whether the net value of the matrimonial property should be divided equally or is an unequal sharing justified by special circumstances. The general principle is that the net value of the matrimonial property should be shared fairly between the parties to the marriage (s.9(1)(a) of the 1985 Act). This is amplified by s.10(1) of the 1985 Act which provides that the: “net value of the matrimonial property . . . shall be taken to be shared fairly between the persons when it is shared equally or in such other proportions as are justified by special circumstances”. Section 10(6) of the 1985 Act identifies examples of “special circumstances”. The pursuer’s submission was that an unequal division was justified in the circumstances of the present case by reference to the source of funds used to acquire Balgown, that is by reliance on s.10(6)(b) of the 1985 Act. It was submitted that even if there was some kind of consideration for the transfer of the farm to the pursuer then it did not take account of the full value of the subjects. It was noted that stamp duty was paid upon the sum of £148,000 but how that sum was derived at [sic] was unclear from the evidence. The sum was said not to represent the value of a one-half share of the land at the relevant time. It was also observed that on the evidence valuations of Balgown Farm and Broadfield Farm, which [was] acquired by the pursuer’s brother, were influenced by the views of the pursuer’s late father. Similarly the value to be put on the assets which were to be split was influenced by the pursuer’s late father in the same way. Reference is made to the evidence given by the pursuer, his brother and indeed by the defender that the pursuer’s brother felt hard done by the terms of the transaction. Reference was made to a number of authorities where unequal sharing had been allowed, albeit it was accepted that these were illustrative only (Whittome v Whittome; Davidson v Davidson; and MacLean v MacLean).

The defender submitted that no special circumstances existed in Balgown Farm and that unequal sharing was not justified. It was submitted that there was a strong presumption in favour of equal sharing of matrimonial property.

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Even where special circumstances existed the court was not necessarily required to divide the matrimonial property in unequal proportions. The decision was discretionary having regard to the principles to divide the matrimonial property in a way which achieves fairness. It was accepted that the manner was essentially discretionary and aimed at achieving a fair and practicable result in accordance with common sense (Jacques v Jacques at [p.110;] p.22 approving the dictum of the LP (Hope) in Little v Little at [p.49;] p.78[7]).

[32] In relation to this question I consider that it is necessary to have regard to the totality of the evidence relating to the pursuer’s acquisition of his interest in Balgown Farm. It seems clear on the evidence, and was in fact accepted by the defender in her evidence, that the arrangements regarding Balgown Farm were effectively determined by the pursuer’s late father. Strictly the property had once belonged to the pursuer’s father and his wife, the pursuer’s mother.

As is clear from that lady’s affidavit it was the father’s wishes that were determinative in regard to the distribution of his property. The late Mr Parker’s intention appears to have been formed many years prior to the pursuer’s acquisition of Balgown Farm. A fairly clear picture of these intentions emerges from the evidence. That intention was that each one of his three sons should be established in a farm of their own. The whole tenor of the evidence of the pursuer, his brother, his mother and Mr Lyle the chartered accountant was that the asset represented by Balgown Farm was to be employed as a means of achieving this end. That objective insofar as the eldest of the late Mr Parker’s three sons was achieved a number of years before the pursuer’s acquisition of Balgown Farm and did not figure in the evidence in this case. The transactions whereby the pursuer acquired Balgown Farm and his brother acquired Broadfield Farm did however feature in the evidence. It is fair to say that no precise explanation of the transactions was established in evidence. What was however in my view clear was that the transactions were designed with a view to achieving the objective of both Stuart and Ian Parker owning their own farm. So far as Stuart was concerned that meant his having the ownership of Balgown Farm, albeit encumbered with a significant overdraft liability. That liability was incurred as a necessary part of the arrangements designed to achieve the late Mr Parker’s desired intention. The question is therefore whether this arrangement is capable of constituting “special circumstances” within the meaning of that term in s.10(6)(b) of the 1985 Act. It is accepted by the defender that whether or not special circumstances are established is an exercise of discretion on the part of the court albeit that the purpose of that discretionary exercise must be “achieving a fair and practicable result in accordance with common sense”. These principles are wide. Applying them to the present case it would seem to me to be a matter of common sense that a family arrangement, long planned and carefully thought out with the assistance of professional advisers and with the specific aim of establishing a family member as the proprietor of a farm could fall to be regarded as a special circumstance. It would also appear to me to be consonant with fairness that such arrangements be recognised and reflected in an unequal sharing of matrimonial property. It follows that I consider that the pursuer has established special circumstances in the present case and that an unequal sharing of matrimonial property could in principle be justified.

[33] The next issue is whether any special circumstances exist which would justify an unequal sharing of the parties’ respective interests in the firm of S & E Parker. I can deal with this matter briefly. The partnership was formed in 2000, apparently on advice from chartered accountants that it was

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advantageous for tax purposes. Since inception both partners, that is the pursuer and the defender, have worked in the business. The contribution in terms of work input to the partnership business by the pursuer was, on the evidence, greater than that of the defender but this was compensated for by the defender’s contribution by way of childcare and homemaking tasks which fell exclusively to her. It accordingly appears to me that there are no special circumstances which would justify departure from the principle of equal sharing so far as interests in the partnership are concerned.

[34] The next issue to the be considered is that of economic advantage or disadvantage in terms of s.9(1)(b) of the 1985 Act. These issue[s] are formulated in questions (e)–(i) of the issues for proof as recorded in para.4 hereof.

[35] In relation to any issue of any economic disadvantage suffered by the defender as a result of capital expenditure by the firm of S & E Parker on the farm of Balgown it is accepted by the parties that over the course of the marriage, the sum of £125, 746 was expended on works to the farmhouse and farmland by the firm. I have already determined that one-half of the farm forms part of matrimonial property. It accordingly follows that one-half of that expenditure is represented in the value of that one-half share.There accordingly remains the figure of £62,813 which would, in my view, fall to be regarded as expenditure which has been expended to the benefit of the pursuer’s personal interest in Balgown farm.

[36] I turn to the second aspect of this matter, that is whether the pursuer has sustained economic advantage as a result of contribution of the defender in terms of her work on the farm and, correspondingly, whether the defender has suffered economic disadvantage in the interest of the pursuer and the parties’ children. In relation to these matters, there was a conflict in the evidence of the pursuer and the defender. The pursuer gave evidence of a general nature to the effect that the defender’s work on the farm was relatively modest. By contrast the defender gave rather more detailed evidence as to the work she did in feeding calves, moving cattle and other general tasks about the farm. She also spoke to the work she did as a bookkeeper, albeit quite candidly accepting that this ultimately did not prove to be a task for which she was best suited. It is to be observed that the defender was able to give a much more detailed account of her work than was the position of the pursuer. The pursuer was no doubt, it was not disputed by the defender, a hardworking man who was busy around the farm more or less all the time. It is quite possible that he made no precise note as to the time the defender devoted to farm tasks.

Nevertheless, the impression I obtained was that he sought to minimise the defender’s efforts on the farm. Even if I were incorrect in forming that view, there would still remain the consideration that the defender undertook valuable tasks, feeding calves on a dairy farm must fall into this category, which if she had not done them, would have required to have been done by someone else either the pursuer or a paid employee. There is a further consideration. The defender’s evidence was that she ceased to accept ad hoc employment as a supply teacher because it conflicted with her duties on the farm. This was not contradicted by the pursuer. The inference which I make is that the defender’s work on the farm occupied sufficient time to render it impracticable for her to work as a supply teacher. This, in my view, points to a significant contribution by the defender to the farm operation. A further implication of this fact is that by giving up supply teaching, the defender had as a matter of probability impaired her prospects of obtaining employment as a teacher in the future. It was not disputed by the pursuer that the defender

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has not worked as a teacher for 15 years or thereby. She spoke to her lack of familiarity with modern teaching methods and the requirement that would be placed upon her to undertake some form of retraining if she sought to obtain further teaching. I am of the view that these obstacles in returning to the teaching profession are a direct cause of the defender’s giving up teaching in order to devote more time to working on the farm.

[37] It follows from the foregoing that I am satisfied that the running of the farm was rendered easier by the defender’s work on the farm. I am also satisfied that there was a cost saving to the farming business by the defender’s contribution. It follows that I am satisfied that there has been an economic advantage accruing to the pursuer by the contributions of the defender in terms of her work on the farm. I am equally satisfied that by reason of giving up employment as a supply teacher and thereby prejudicing her ability to practice her chosen profession, the defender has suffered economic disadvantage by her work on the farm.

[38] This last finding raises the issue, focused in question (j) posed by the parties and narrated in para.4 hereof as to whether the defender will require a period of time to adjust to the loss of the pursuer’s support after divorce. I am satisfied for the reasons addressed in the immediately preceding paragraph that the defender has established that she will require a period of time in order to adjust to the loss of support she derives from the pursuer and from her partnership in the farming partnership. Her evidence, which I have already alluded to, that she has not taught for many years and will therefore require time to become familiar with modern teaching practices and obtain employment is, in my view, fair and justified comment.

[39] I turn now to the issue of determination of the value of the farm subjects. Both sides produced evidence from suitably qualified chartered surveyors. The methodology employed by the valuers was essentially the same.

The pursuer produced a second valuation provided by a land agent. That person was not a member of the RICS and therefore not in a position to produce a report of the sort I was informed was commonly required by banks and other lending institutions when advancing capital in relation to acquisitions or fund raising secured over farm property. The valuation had however been verified by a fellow of the RICS employed by the same firm as the valuer.

Although the valuer appears to have been instructed late in the history of the litigation he appears to have arrived at his valuation independent of any report from Ms Maxwell. In the case of the defender, her surveyor’s evidence was supplemented by a rather more subjective analysis produced by a very experienced land valuer. I do not doubt that the land valuer applied his mind and used the benefit of his experience in attempting to value the land subjects.

I do however note that this person was also an employee of the firm that employed the surveyor who carried out the valuation exercise for the defender.

I also observe that this person was instructed late in the course of the litigation and had access to the report already prepared by the surveyor. Without in any sense intending to criticise the work carried out by this person, I formed the view that his evidence could be regarded as no more than an adjunct to the work already carried out by Mr Bell. In relation to the competing reports, criticisms were made either way in relation to the allocation of parts of the farm under the McAulay Land Institute Land Classes and to the comparables used. There was a degree of subjectivity in all aspects of these criticisms.

[40] I now turn to the issue of the value of the land at the Balgown. As already noted the methodology applied to valuation of these premises by the

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witness called by either party, Ms Maxwell and Mr Bell, was the same. This methodology involved two exercises, first arriving at a value per acre of the farmland and second comparison of prices achieved for the sale of comparable farmland.

[41] In relation to land values the two valuers were not in agreement.

Mr Bell’s per acre valuations were higher than those adopted by Ms Maxwell.

The pursuer’s submission in relation to this discrepancy was that Mr Bell had erred in considering that some of the land at Balgown would recover with minor drainage work. It was also submitted that Mr Bell had erred by considering that the price of land from tree planting provided a base, or lowest, level for the price of agricultural land. Both Ms Maxwell and Mr Patterson thought that there were areas where the land was properly to be regarded as unproductive due to permanent wetness on the presence of “rocky outcrops”.

Moreover some of the land at Balgown was not suitable for planting trees thus negating the use of a base price per acre based on the value of land for that purpose. These errors had caused Mr Bell to place too much of the farmland at Balgown in a higher land classification category than it merited with consequent overstatement of land value. The defender maintained that Mr Bell’s approach was correct.

[42] The next stage in the valuation exercise was the application of comparables. It appeared to be common ground between the parties that the use and application of comparables is ultimately a matter of knowledge and experience of the part of the valuer. That said there was one difference in the approach taken by Ms Maxwell and Mr Bell. Mr Bell employed an “equipped acre average” in assessing comparables. The position of the pursuer was that this would be likely to result in a higher value because: “average price per equipped acre will inevitably be higher if the area of land is smaller as there will fewer acres over which to average the value of the land and buildings. The average will also depend on consistency of land quality”.

It was submitted that at Balgown the productive land was of a relatively modest acreage and there was a broad range of land quality. It followed that the use of the “equipped acre average” overstated the farm’s value.

[43] In relation to comparables Ms Maxwell noted in her valuation that: “there is little comparable evidence in this specific location since the economic downturn and the Irish buyers influence disappeared. There are no direct farm comparables for Balgown due to its nature and its location on the Northern Rhines”.

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She thereafter consider[ed] that it was appropriate to take into account farms in other locations and make appropriate adjustments. The comparable property which she relied on most heavily was High Ardwell Farm, Kirkcolm, Stranraer. This was an arable and stock rearing farm amounting to 179 or thereby acres with a detached traditional farmhouse and traditional and modern outbuildings which was sold in May 2010. The sale price was £910,000 an average of £5,070 per acre for the whole property. It was acknowledged that the farm was a former dairy unit, much smaller than Balgown and having an overall better land class. Ms Maxwell stripped out the value she attributed to the farmhouse to give a bare land average price per acre of £3,600. This was a higher bare land average than that she attributed to Balgown but she justified this by consideration of the slightly poorer land quality at Balgown and consideration of the requirement to upgrade the

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steading at that farm. Mr Patterson also relied upon this property as an appropriate comparable.

[44] Counsel for the pursuer criticised the comparables employed by Mr Bell because they were derived from a private database kept by his company and not by reference to prices recorded in the Land Register of Scotland. She also maintained that the comparables relied upon by Mr Bell were “weak”.

Only one of Mr Bell’s comparables was of a whole farm and that related to a sale in July 2006 before the marked deterioration in market conditions in 2008. For this reasons it was not a good guide to land value at the relevant date in 2011. Another comparable relied upon by Mr Bell was in fact a property which was only marketed by Mr Bell’s employers and had not been sold. It was submitted that no reliance could be placed on an upset price which had not been vindicated by a sale. Three other comparables were blocks of land sold in 2009 and 2010. It was submitted that blocks of land were not appropriate comparables for whole farm sales. In relation to farm sales one of those relied upon by Mr Bell, Little Ervie farm was sold for market specific reasons at an inflated or exceptional price. Another comparable relied on by Mr Bell, Clash Farm was of a property with much higher quality land than that at Balgown.

[45] Counsel for the defender invited the court to accept the evidence of Mr Bell in its entirety. His valuation was completed as an RICS red book valuation. He was both a member of the RICS and a registered valuer by that institution. It was said that he gave his evidence in an authoritative manner, that his conclusions as to value were well reasoned and researched and that his use of comparables was focused and directed to evidence of sales before the valuation date. The fact, commented upon by the pursuer that one property in his schedule of comparables had not in fact been sold was said not to undermine his conclusions. It was accepted that he had used as an approach to measuring comparables an “equipped acre average”. It was submitted that the use of “bare land averages” by Ms Maxwell was not reasonable as it was inaccurate to describe the land at Balgown as being of a broad range of land quality. Moreover it was submitted that Mr Bell’s valuation was supported by the evidence of Mr McMillan who was said to have been “hugely experienced” and having a “long history of sales transactions in the area”. His evidence in relation to the trend for increasing land prices in the area since the 1990s was described as “compelling”. His valuations should be preferred.

[46] It is clear that whilst the valuation witnesses in this case employed the same basic methodology there were within the approaches each of them took variations. This can clearly been seen in the use by Ms Maxwell of “bare land averages” in contrast to Mr Bell’s employment of “equipped acre averages”.

The other area where there were discrepancies were failure to agree on land use classification for the various areas of Balgown farm and lack of unanimity in choice of comparable properties. These differences in approach, and the resultant quite significant disparity in valuations arrived at, present the court with a difficult exercise. Essentially I require to view the expert testimony of these witnesses and determine objectively if there is any basis for preferring one to the other. I feel bound to observe that it is regrettable that there were so many discrepancies in the valuation exercises. I have already observed that this case was subject to some case management. I was the judge who presided over the various case management hearings and therefore any criticism must rest with me. Having acknowledged that I consider that it was unfortunate that there was no effort to compel the expert witnesses to meet prior to the proof and determine where, if at all, it was possible for them to reach agreement

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in relation to areas of dispute in their reports. I consider it likely or at least possible that if such an exercise had been forced upon parties there would have been less disagreement between the surveyors. I observe that in England and Wales Practice Direction 35 of the Civil Procedure Rules provides for court directed discussion between experts. Paragraph 92 of the direction notes that the purpose of such meeting is not to settle cases but “to agree and narrow issues” and in particular to identify: “(i) the extent of the agreement between them; (ii) the points of and short reasons for any disagreement; (iii) action, if any, which may be taken to resolve outstanding points of disagreement. . . .”

An exercise of that sort would in my view have been helpful and productive in the present case. I make it clear that in approaching case management in the future in cases where there is a significant divergence in expert opinion I consider that it will be desirable to compel valuers to have meetings of the sort envisaged in the English Practice Direction prior to proof in the hope that the problem which has emerged in this case is not repeated.

[47] In relation to the issue of which valuation is to be preferred I consider the first matter I have to determine is what weight, if any, I should attribute to what I categorise, I hope not unfairly, as the additional valuations produced by Mr Patterson and Mr McMillan. Mr McMillan can be dealt with more easily because his valuation was the same as Mr Bell’s and was not suggested to be anything more than support for the principal valuation of that person.

Mr McMillan was clearly a very experienced land valuer with extensive knowledge of the market in farm and rural properties in south-west Scotland.

That experience when applied to his appraisal of the value of Balgown Farm is, in my view, of some value to the court. Against that however I have to bear in mind that Mr McMillan’s work was essentially an exercise, checking Mr Bell’s work against his own background knowledge of market conditions in the relevant area at the relevant time. Moreover I cannot ignore the fact that Mr McMillan is an employee of the same company who employ Mr Bell. I do not suggest that there was any intentional bias in favour of Mr Bell’s valuation on the part of Mr McMillan. I cannot however ignore the possibility of unconscious bias on his part to support the valuation already arrived at by his co-employee. Accordingly whilst I am prepared to accept that Mr McMillan provides some support for Mr Bell’s valuation I do not consider that I can regard his evidence as providing a separate, independent valuation of the property.

[48] The criticism levelled by the defender against Mr Patterson is of a different nature. It is stated that Mr Patterson not being a member of the RICS was not in a position to provide a valuation which could be relied upon by the court. As I understood it this was essentially because a valuation produced by Mr Patterson would not be relied upon by a bank or a lending institution considering funding for the purchase of a farm or funding of an agricultural enterprise. I am not persuaded that this objection is an absolute bar to the court having regard to the valuation exercise carried out by Mr Patterson. Plainly the possession of a professional qualification is a straightforward and easy means whereby a person can satisfy the court of professional expertise such as to qualify that person to express an opinion in court. It is not however the only method whereby such expertise can be proved to the court’s satisfaction. Proof of experience in a relevant field is another means whereby the court can be so satisfied. It was plain from the account of his expertise and working life given to the court that Mr Patterson had extensive and long-standing knowledge of the market for farm and agricultural properties in south-west Scotland. The same of course could be said for

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Mr McMillan, a fact that I have already acknowledged.The principal difference that I can see between Mr Patterson and Mr McMillan is that Mr Patterson carried out an independent exercise whereas, as already noted, Mr McMillan was a co-employee of Mr Bell and, on the evidence, appeared to consider his role to be in the nature of a cross-check of Mr Bell’s work. Importantly Mr Patterson’s independent exercise did not arrive at the same valuation as Ms Maxwell had. However, and in my view significantly, his valuation was within 10 per cent of the figure arrived at by Ms Maxwell. I consider that the fact that Mr Patterson conducted an independent valuation exercise and arrived at a valuation figure within 10 per cent of that of Ms Maxwell to be significant support for the latter person’s valuation.

[49] So far as the valuations of Ms Maxwell and Mr Bell are concerned I have formed the view that certain of the criticisms made by the pursuer of Mr Bell’s valuation are objectively justifiable. First, I consider there is force in the criticism that he understated the extent and degree of bog and marsh on the farm. He considered that the wet areas he observed were temporary in nature whilst Ms Maxwell’s observation in relation to the presence of areas of reed growth being suggestive of long-standing bogginess appears to me to be justifiable. I also consider that he erred in regarding the land price achievable for tree planting land as a suitable base value for the farmland. I prefer the evidence of Ms Maxwell and Mr Patterson to the effect that areas of land on the farm were not suitable for tree planting, that again being associated with the extent of wet or boggy land on the farm. Second, having regard to the size of the holding and the nature and condition of the farm buildings Mr Bell erred in using an equipped acre average as a base, or lowest figure, for land value.

Taking into account the size of the farm and the condition of the buildings I am of the view that a bare land average was a more appropriate method of valuation.

The third area where I consider criticisms can be levelled at Mr Bell is in relation to the choice of comparables. I acknowledge that both valuers were hindered by the lack of directly comparable farms in the immediate area of Balgown Farm. Ms Maxwell addressed this problem by using as her strongest comparable a farming unit within relatively close proximity of the farm which had until relatively recently operated as a dairy farm. She acknowledged the differences in that farm, it had better land than the land at Balgown, but factored that into her evaluation. By contrast Mr Bell, and for that matter Mr McMillan, used a number of comparables at a considerable distance from Balgown. He used land which was sold without any buildings. He used subjects which were exposed for sale by the company that employed him but on which there was no satisfactory evidence that a sale had ever been achieved. I do not consider that an upset or asking price can form the basis for comparable evaluation of price. Lastly in this regard all the subjects he used as comparables were apparently derived from a private database kept by his company. Whilst the keeping of such information is entirely understandable and no doubt good commercial practice so far as firms of valuers are concerned it is in my view preferable that information in relation to price which is to be used for comparison purposes be derived from records available to the public such as those kept by the Land Register of Scotland.

[50] At a more subjective level I consider that Mr Bell’s evidence may be criticised for being unduly or overly optimistic about the price which Balgown was likely to achieve. Despite stating in his report that it would be preferable if the farm were sold as one unit, in his oral evidence he was more prepared to countenance the split up of the farm in order to achieve a sale. This approach was inconsistent with the evidence of Ms Maxwell and Mr Patterson who

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considered that the best price would be achieved by selling the farm unit as a whole. It was, as already stated, also inconsistent with what appears to have been his approach when he first prepared his written report. It also appears to me that Mr Bell may have downplayed the need or extent for which capital expenditure would be required in the near future on Balgown Farm and the depressant effect that consideration might have on the achievable price for the farm.

[51] Taking all the foregoing factors into account I have reached the conclusion that Mr Bell’s valuation of the farm at the relevant date may be over optimistic. Applying as objective criterion as I can I accordingly prefer the valuation of Ms Maxwell and conclude that at the relevant date the value of the farm was £1,480,000.

[52] One further issue required to be determined in relation to Balgown Farm, that is whether its value would be optimized if sold as a unit or, in the alternative, whether there is scope for sub-division and sale of parts of the farm lands. Plainly sub-division would be physically possible, this was not disputed by the pursuer. His position was that it would not be economically sensible to sell of[f] part of the farm in order to raise capital. In this he was supported by Ms Maxwell and Mr Patterson and most strongly by Mr Donnelly who considered that the farm’s continued viability required the use of all current farmland. Mr Bell considered that sale of part of the farm could be achieved at an attractive price. In suggesting this option he had not however factored in the ongoing viability of the farming enterprise. It is also the case, as already noted, that his stated preference in his report was that maximum price would be achieved by the sale of the whole farm. Taking all that into account I conclude that as a matter of value it would be preferable if Balgown Farm were presented as a whole entity.

[53] I now apply my foregoing conclusions to the conclusions in the action.

I have indicated that I consider that the one-half of Balgown Farm which the pursuer acquired after the date of marriage other than by way of gift falls to be regarded as matrimonial property. I have stated that I consider the value of Balgown Farm as stated by Ms Maxwell at £1,480,000 at the relevant date to be accurate. The effect is that the matrimonial property attributable to the farm at the relevant date falls to be assessed in the figure of £740,000. The other items of matrimonial property are agreed between the parties and set forth in para.4 of the joint minute. On my calculation net matrimonial property, amounted to £696,228 at the relevant date. Equal division of that would therefore result in an entitlement to the defender of £348,114. As I have already observed the overriding presumption is for a fair division of the property between the parties to the marriage. I have already determined that an unequal sharing of the matrimonial property represented by the farm could be justified. I have also determined that the defender has suffered economic disadvantage as a result of her efforts on the farm during the course of the marriage and that the pursuer has suffered economic advantage for the same reason. It follows that there exists the possibility of departing from equal division of matrimonial property to allow for these factors. I do however have to bear in mind that the overriding principle and object is to achieve fairness.

I consider that having regard to the totality of the evidence an equal division of matrimonial property would achieve that objective. I shall accordingly award the defender a capital sum of £348,114, with interest thereon at the rate of 8 per cent per annum from 1 December 2011.

[54] In relation to the conclusions for aliment the farm income is vouched in the financial statements for the partnership which are lodged and agreed as

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accurate in para.24 of the joint minute. Farm income is obviously and will on the evidence continue to be constrained. The pursuer is currently paying a total of ÂŁ1,050.00 per month towards the maintenance of his children. I consider that this level of payment should continue. For reasons explained in this opinion I consider that the defender has established that she will experience difficulties in returning to her profession as a teacher. In these circumstances I consider that she is entitled to a payment of periodical allowance of ÂŁ500 per month. For those years I will also order the transfer sought in conclusion 2 by the pursuer.

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For the pursuer: Innes, instructed by Turcan Connell, Solicitors, Edinburgh.

For the defender: Brabender, instructed by Simpson & Marwick, Solicitors, Edinburgh.

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A COURT OF SESSION Inner House (Extra Division)

4 November 2014

Lady Paton, Lord Bracadale and Lord Drummond Young B

A D, APPELLANT

Appellant

against The decision of the Conduct and Competence Committee of the Nursing and Midwifery Council dated 12 September 2013 Natural justice—Conduct and Competence Committee—Fair trial— Representation C

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The appellant appealed against a decision of the Conduct and Competence Committee of the Nursing and Midwifery Council finding her guilty of serious misconduct involving dishonesty and issuing an order striking her off the register of nurses. The grounds of appeal were first that her representation in connection with the proceedings before the Conduct and Competence Committee was inadequate; and secondly that the Committee erred in law by accepting the methodology relied upon by the respondents to identify the person said to be responsible for taking drugs from the ward where the appellant worked. The appellant was accused of misconduct in that while she was employed as a Senior Sister on the Intensive Care Unit at the Great Western Hospital, Swindon she removed medication dishonestly and without permission. The charge listed 11 occasions when a drug known as Cyclizine, which is used to alleviate symptoms of sickness and nausea, had been removed.

There was no direct evidence against the appellant and the case against her was circumstantial in nature. The person responsible was said to have been identified by a process of elimination that depended on a methodical checking of work rotas based on the assumption that the same person was responsible for the removal of tablets on each of the occasions. Persons were eliminated if it was discovered that they were absent from a shift when tablets appeared to have been taken. However, inaccurate results could be obtained if, for instance, an innocent explanation was obtained for any of the instances of unauthorised removal; there were occasions when staff were transferring patients to another hospital in which the tablets were taken by the travelling staff to avoid travel sickness. It was obvious that careful analysis of the documents in the case was required in order to present a defence on behalf of the appellant and careful and substantial preparation would have been required.

The appellant argued that she had been unable to defend herself properly by reason of a lack of legal representation; the complexity of the subject-matter; inequality of arms with the respondents; and her lack of preparedness, fatigue and inexperience. She argued that the Committee erred in law by permitting the hearing to proceed on the day it did and to continue over the ensuing five days and a further five days seven weeks later. The appellant had instructed a solicitor to represent her and he applied for legal aid on behalf of the appellant, although legal aid was not available for proceedings of this nature and was eventually refused. The appellant met her solicitor four days before the hearing and was told he could represent her on only three of the five days fixed and would require a fee of £10,000. She was unable to find that sum in time and consequently the following day the solicitor wrote to the respondents stating that the appellant had been unable to obtain legal aid and that she would be 286

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unrepresented. She was not advised to seek an adjournment. The appellant averred that the solicitor had failed to prepare a defence or properly to consider the evidence disclosed by the respondents although it contained 471 pages.

The respondents were represented by a barrister and there was a legal assessor to help the Committee. The Committee allowed an adjournment of one day to enable the appellant to consider the evidence and if possible to identify the productions, but that did not significantly remove the disadvantage suffered by the appellant. During the hearing itself the appellant made an attempt to recover documentation held by the NHS Trust but the application was refused.

Also her cross-examination of the witnesses was inexpert. It was clear that the appellant was unable to represent herself adequately.

Held (1) that a similar approach to inadequate representation should be taken in Scotland as was taken in England and Wales since the Conduct and Competence Committee operated throughout the UK; the test was that the conduct of legal representation had to be such that no competent lawyer could have behaved in such a manner and that the conduct had to have led to identifiable errors or irregularities in the trial which rendered the process unfair or the conclusion unsafe (para.20); (2) that the instant case was one in which owing to its complexity and the volume of documentation, legal representation was essential if the appellant’s defence was to be presented properly and the test was satisfied (para.24); and (3) that the methodology used by the NHS Trust to incriminate the appellant could not have properly been accepted by any disciplinary committee that directed itself properly on the law and assessed the evidence in a rational manner and the appellant’s principal criticisms of the methodology were soundly based (para.35); and appeal allowed and decision of the Conduct and Competence Committee quashed.

Sutherland-Fisher v Law Society of Scotland, (I.H.) 2003 SCLR 568; 2003 S.C. 562 distinguished.

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Cases referred to: Anderson v HM Advocate, 1996 J.C. 29; 1996 S.L.T. 155 Christian v Nursing and Midwifery Council, [2010] EWHC 803 (Admin) Moseka v Nursing and Midwifery Council, [2014] EWHC 846 (Admin) R (Aston) v Nursing & Midwifery Council, [2004] EWHC 2368 (Admin) Sutherland-Fisher v Law Society of Scotland, (I.H.) 2003 S.C.L.R. 568; 2003 S.C. 562.

E

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 Drummond Young on 4 November 2014.

LORD DRUMMOND YOUNG [1] Prior to 12 September 2013 the appellant was a nurse registered with the Nursing and Midwifery Council, who are the respondents to the present appeal. On that date the Conduct and Competence Committee of the Council found the appellant guilty of serious misconduct involving dishonesty and issued a striking off order which was to have effect from 11 October 2013. The decision has not yet come into effect because of the present appeal, but the appellant has not worked as a nurse since that time. The appellant has appealed against that order on two grounds: first, that her representation in connection with the proceedings before the Conduct and Competence Committee was inadequate; and, secondly, that the Committee erred in law by accepting the methodology relied upon by the respondents to identify the person said to be responsible for taking drugs from the ward where the appellant worked.

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[2] The circumstances that gave rise to the proceedings are as follows. The Nursing and Midwifery Council alleged that the appellant’s fitness to practise as a nurse was impaired by reason of misconduct. The alleged misconduct was that, between 23 May 2011 and 6 October 2011, while the appellant was employed as a Senior Sister on the Intensive Care Unit at the Great Western Hospital, Swindon, operated by Great Western Hospitals NHS Foundation Trust, she removed medication that belonged to the Trust on 11 listed occasions and did so dishonestly in that she did not have permission to remove the medication. The 11 listed occasions all related to 50 milligram tablets of a drug known as Cyclizine, a drug that is used to alleviate symptoms of sickness and nausea. The occasions were as follows: Time period when missing 6–7 June 2011 13–14 June 2011 24–27 June 2011 5–8 August 2011 11–12 August 2011 14 August 2011 13 September 2011 18 September 2011 21 September 2011 3–4 October 2011 6 October 2011

Number of tablets removed 32 35 29 36 29 10 8 4 4 4 44

[3] It is important to note the nature of the case against the appellant and the nature of the defence that she intended to put forward. There was no direct evidence against her; no witness claimed to have seen her taking missing tablets at any time. The case against her was accordingly wholly circumstantial in nature. The records of those on duty on the shifts when tablets went missing were analysed to discover who had an opportunity to remove the tablets from the ward on each occasion. The tablets were kept in an unlocked drug storage cupboard on the ward. If a member of staff was absent from a shift when tablets appeared to have been taken without authorisation, it was assumed that that member of staff could not have been responsible for any of the incidents. In this way, members of staff were eliminated one by one. Eventually, following a lengthy process, only the appellant was left. It was therefore presumed that she must have been the person who took the tablets.

[4] The process of elimination was obviously based on the assumption that the same person was responsible for the removal of tablets on each of the recorded occasions. It was also based on the assumption that all of the tablets had been wrongfully taken. If, therefore, an innocent explanation existed for any single incident, that would affect the whole procedure, because the particular incident might well have resulted in the elimination of a person who should not have been eliminated. In this connection it is perhaps significant that three of the incidents involved the removal of only four tablets and a fourth of only eight tablets. Evidence was led during the hearing that on occasions when a patient was transferred to another hospital by ambulance he

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or she would be accompanied by medical and nursing staff, who travelled in the back of the ambulance. This gave rise to a risk of travel sickness, and the evidence was to the effect that it was common practice for the staff involved to take four Cyclizine tablets on each such occasion to protect them against that possibility; two members of staff were involved, and each would take two tablets, one for the outward journey and one for the return journey. It was further stated that on such occasions the proper formal procedures would not be used for the removal of the tablets. On these occasions, therefore, tablets that had been taken by medical and nursing staff in the ordinary course of their work would have been taken into account in the elimination exercise, and might well have produced an inaccurate result.

[5] It is clear in our opinion that the case against the appellant was a fairly elaborate circumstantial case based on the analysis of extensive documentation.

That documentation and the exercise that was carried out were the subject of a considerable body of oral evidence. Written statements had been taken from all of the witnesses to be led by the respondents. If the appellant were to answer the case, it is clear that either she or her legal advisers would require to master the documentation and obtain a clear understanding of the elimination exercise, and would have to ensure that the potential weaknesses in the circumstantial case were properly tested. We think it obvious that this would require substantial preparation. Among the matters that had to be tested were the assumption that only one member of staff was involved; the possible removal of tablets by staff involved in patient transfer; and the basis on which members of staff had been allocated to the periods during which tablets went missing. In this connection, it appears that members of staff were in the habit of arriving at the ward before their shifts began and staying for some time after the end of the shift. If tablets were removed during any of those periods, it appears that the removal would be attributed to those on the current shift, rather than the previous shift or the following shift. This could give rise to inaccuracy, resulting in a false elimination.

[6] The charge against the appellant was in due course heard by the Conduct and Competence Committee of the respondents. They issued a decision on 12 September 2013, in which they found the charge proved, determined that the appellant’s fitness to practise was currently impaired by reason of misconduct, and ordered that the appellant should be struck off from the Register of Qualified Nurses and Midwives, kept under art.5 of the Nursing and Midwifery Order 2001. As already noted, the appellant has appealed against that decision on two grounds, which we propose to consider sequentially.

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1. The appellant’s representation before the Conduct and Competence Committee

[7] The appellant contends that she was unable to defend herself properly by reason of a lack of legal representation, the complexity of the subject-matter, an inequality of arms with the respondents, and her lack of preparedness, fatigue and inexperience. Consequently she asserts that the Conduct and Competence Committee erred in law by permitting the disciplinary hearing to begin on 10 June 2013 and to continue thereafter over the ensuing four days and a further five days seven weeks later. As a result, it is said, the hearing was unfair and prejudicial to the appellant.

[8] During 2012 the appellant instructed a solicitor, Mr Quinton Muir, to represent her at the disciplinary hearing before the Committee. Mr Muir accepted the instructions and informed the respondents of his involvement.

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He applied for legal aid on behalf of the appellant, although legal aid is not available for proceedings of this nature. Consequently, on 27 May 2013, the legal aid application was refused. The appellant next met Mr Muir on 6 June 2013. By that time the disciplinary hearing had been scheduled for the five days beginning on 10 June. Mr Muir asked for payment of a fee in advance of appearance at the disciplinary hearing. He further informed the appellant that he could only conduct the hearing on 10, 12 and 14 June, and that she would have to represent herself on the other two days. The appellant was unable to make immediate payment of the fee asked for, £10,000. She states that she formed the view that Mr Muir did not want to represent her in any event.

Consequently on 7 June Mr Muir wrote to the respondents to state that the appellant had been unable to obtain legal aid and that she would be unrepresented, but that she would attend the hearing and adhered to her defence. It is thus clear that, prior to the hearing, the respondents were aware of the appellant’s lack of representation.

[9] The appellant states that Mr Muir tendered no further advice to her regarding the conduct of the hearing; nor did he speak to her about the possibility of seeking an adjournment. She further states that Mr Muir did not consider the documentary evidence that had been lodged by the respondents in advance of the hearing or discuss the evidence with her. In short, he failed to prepare the appellant’s defence to the charge: he did not attempt to identify any defence witnesses or to recover evidence which might have assisted the appellant or even to consider evidence disclosed to him by the respondents.

When notice of the disciplinary hearing was given to the appellant and Mr Muir, a case management form was enclosed which sought information from the appellant regarding her defence and the availability of a representative. A copy of that document as completed by Mr Muir was available to us. It was returned to the respondents on 20 December 2012. It indicated that the appellant required a hearing and intended to attend, and gave details of Mr Muir’s availability. While it contained a denial of the charges, no details of the defence were given. The form gave information about the respondents’ witnesses, but, as we have noted, Mr Muir did nothing about that information.

Sections of the form invited disclosure of specific features of the defence, including witnesses, expert evidence and documentary evidence, but these were merely completed with the words “To be confirmed”. It is thus apparent that the form gave no significant information about the defence beyond a bare denial of the charges and an indication that the evidence to be given by the respondents’ witnesses was to be disputed.

[10] When, on 6 June 2013, Mr Muir told the appellant that he would not be able to represent her at the hearing on 10 June, he presented her with the documentary materials that had been lodged with the Committee by the respondents. The documents lodged on behalf of the respondents, including witness statements, came to 471 pages. The appellant was not provided by Mr Muir or anyone else with any analysis of those documents. It was not clear exactly what had been lodged for the hearing. The appellant studied the documents over the weekend prior to 10 June, but by that date she had not been able to identify the documents that were productions. An adjournment was granted on the first day to allow this matter to be considered. The respondents place reliance on the fact that the appellant was permitted to lodge documents at the start of the hearing, and proceedings were delayed, in effect by one day, to allow her documents to be lodged. Nevertheless, we observe that the ability to lodge documents depends on a proper understanding of the material that exists; if the appellant did not have a good understanding

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of that material it is difficult to see that the adjournment could have been of great assistance. On the second day a further witness statement and additional witness were proposed by the respondents. The appellant avers that she was unable to prepare her case properly in the time available to her following Mr Muir’s withdrawal. The tribunal hearing eventually took ten days, from 10 to 14 June and from 2 to 6 September 2013. It normally ran from 9 am to 5 pm.

The appellant travelled by train from Maybole to Edinburgh each day. She states that by the fourth day she was exhausted through lack of sleep and the stress of representing herself.

[11] At the hearing the respondents were represented by a barrister and the Committee was assisted by a legal assessor who was an advocate. We have no reason to suppose that either acted outwith proper professional standards.

Nevertheless the appellant had no experience of legal procedures, which inevitably placed her at some disadvantage. She did not request an adjournment to allow time to consider the evidence; she states that this was because of her unfamiliarity with tribunal procedure. The possibility was not canvassed with her by the Committee.

[12] We consider it clear on the documentation that is available that Mr Muir failed totally to prepare for the hearing, and did not make this known in any meaningful sense to the appellant until 6 June 2013, four days before the hearing was due to begin. As we have already noted, the appellant intended to present a defence that the methodology used by the employees of the NHS Trust who investigated the unauthorised removal of Cyclizine from the ward was flawed in a number of respects. To establish such a defence, however, it is clear that a detailed analysis of complex documentation was required, and Mr Muir had failed totally to carry this out. It also seems clear to us that further evidence, possibly from an expert, might have been desirable with a view to rebutting the case against the appellant. Once again, no steps had been taken to obtain any such evidence. We consider that these features placed the appellant at a serious disadvantage when the hearing began. The adjournment of the start of proceedings by, in effect, one day did not significantly remove that disadvantage; the fundamental problem was that the appellant had not been able to master the documentation. That was essential, however, if her defence were to be put forward.

[13] Furthermore, we do not consider that the appellant could be considered responsible to any material extent for Mr Muir’s failures. She had instructed a solicitor to represent her, and he had received details of the case against her, including the extensive documentation. In the circumstances we are of opinion that she was fully entitled to rely on Mr Muir to prepare the case properly, and to give notice of the defence to the Committee. It appears that he did nothing beyond making an application for legal aid that was bound to fail. He did not tell the appellant what had happened until four days before the hearing. At that point she was placed in an impossible position; we note that even for a lawyer instruction in a case of this nature four days before a hearing would almost certainly be inadequate.

[14] The deficiencies in the appellant’s representation did not diminish as the hearing proceeded. The appellant was compelled to conduct what was in effect a ten-day proof, sitting from 9 am to 5 pm on most days. On the fourth day of the hearing, 13 June 2013, the appellant attempted to recover documentation currently held by the NHS Trust. The documents related to the occasions when patients were transferred from the ward where the appellant worked to other hospitals, accompanied by medical and nursing staff. As we have noted, an important part of the appellant’s case was that on

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these occasions Cyclizine was taken to protect against travel sickness, and such use was not recorded. The relevance of those documents is thus obvious.

The appellant attempted to explain why she wanted the records, but her explanation does not seem to have been properly understood by the Committee.

The chairman of the Committee asked why it had taken until the fourth day of what was then understood to be a five-day hearing to make the application, and the appellant replied that she had had problems of legal representation.

[15] The barrister representing the respondents opposed the motion to recover the documents. What she said (notably at p.159 of the transcript) was inaccurate. In relation to the seventh, eighth, ninth and tenth charges, she stated that for the documents sought to be relevant there would require to be four discharges on three of the dates and eight discharges on the fourth. In the light of that, she suggested that the Committee should be “extremely cautious” in assessing the value of the documents. That is clearly a misunderstanding of the appellant’s position, which was that normally four tablets were taken on each occasion. The Committee’s legal assessor did not correct this error. He suggested that the documentation requested did not appear to be relevant to the fundamental question, namely consideration of the appellant’s fitness to practise. This appears to proceed on the premise that, because small quantities were involved, they were not relevant to the overall position. Nevertheless, as we have already stated, the significance of the entries in question was that they could undermine the elimination exercise carried out by the NHS Trust. To that extent it appears to us that the documents in question were plainly relevant.

[16] The legal assessor also referred to the stage in the case when the application had been made, and suggested that the Committee should look into the background circumstances as to why the application came at that particular point, and whether there had been any failure on the part of the appellant to progress such an application at an earlier date. He reminded the Committee that there was no obligation on them to prepare the appellant’s case for her. The chairman of the Committee asked the applicant to tell them about the history of how the case had been managed. The applicant then stated her involvement with her lawyer, fairly succinctly. After an adjournment the application was refused. The chairman pointed out that the appellant could raise matters with witnesses for the respondents or when she gave her own evidence. Nevertheless, the documents relating to patient transfers, which might clearly have provided important evidence to substantiate the appellant’s case, were not available.

[17] On the fifth day of the hearing the appellant cross-examined Mrs Susan Jaffray, a matron at the Great Western Hospital in Swindon, who had given evidence over the two preceding days. That evidence related to the investigations and elimination exercise carried out by the NHS Trust. She was asked about the presence of staff on the ward before their shifts began and after their shifts ended; as noted above, this was a significant part of the appellant’s defence. Mrs Jaffray agreed (p.181) that that happened, and she continued by saying “But I think within the process I used it—I felt I had covered those options as well”. That answer did not explain how the options were covered, and it is obvious that any competent cross-examiner would immediately have asked for details. The appellant did not do so, however. It is difficult to avoid the conclusion that her inexperience of legal proceedings meant that she was placed at a significant disadvantage.

[18] Shortly after that, Mrs Jaffray was asked about the assumption that only one person had been involved in removing the tablets; as we have noted,

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this was a crucial assumption in the elimination exercise. On this, Mrs Jaffray stated that the process had been evolving as it went along, that a lot of thought was put into it, and that “the information that we pulled together suggested that it was one person”. Once again, this answer called out for crossexamination about the details, but that did not follow. The appellant further asked Mrs Jaffray about the transfer of patients to other hospitals, but was unable to get any definite answer about the numbers and dates involved (p.209). That indicates that the use of Cyclizine on patient transfers had not been properly considered by the NHS Trust. Nevertheless, according to the transcript, this point does not appear to have been properly pursued by the appellant. Once again the reason appears to be a combination of defective preparation of the case, as discussed above, and the appellant’s lack of experience of legal proceedings.

[19] Overall, it appears to us from the transcript of proceedings that the appellant was not able to represent herself adequately at the hearing. In part this resulted from her own lack of legal experience; in part it resulted from the inadequacy of the preparations that required to be carried out prior to the hearing; and in part it resulted from the fact that the appellant was only told that she would have to represent herself four days prior to the hearing, at a point where the time available for preparation was manifestly insufficient. The fact of seriously inadequate representation nevertheless appears to us to be very clear.

[20] The applicable legal principles are discussed in a number of relatively recent cases in England and Wales, and we consider that a similar approach should be taken in Scotland; the Conduct and Competence Committee of the respondents operates throughout the UK, and the approach taken to matters of professional discipline in the two jurisdictions should therefore be, and has historically been, approached in an identical manner. First, in R (Aston) v Nursing & Midwifery Council, it was agreed by parties that the approach should be that applied in criminal appeals when complaints are made as to the incompetence of the representation. That meant, in short, that the conduct of legal representation must be such that no competent lawyer could behave in such a manner, and that the conduct must have led to identifiable errors or irregularities in the trial which rendered the process unfair or the conclusion unsafe (the test used in criminal appeals in England and Wales). Subsequently, in Christian v Nursing and Midwifery Council, Judge Roger Kaye QC expressly adopted the same approach as in Aston. Most recently, in Moseka v Nursing and Midwifery Council, it was stated by Green J (at para.22) that an appellate tribunal should pay some deference to the fact-finding function of a lower tribunal, especially if it is a tribunal of a specialist nature. That obviously applies to a body such as the Conduct and Competence Committee of the respondents. He continued (at para.23) by referring to the fact that the appellant in that case appeared in person, without legal advice or representation, and indicated that in such a case an unduly technical or procedural approach should not be adopted. In the present case the appellant has had the benefit of being represented by counsel in the appellate proceedings, but had no representation before the tribunal. In these circumstances we consider it appropriate not to take an unduly technical approach to the procedural matters that arose before the Conduct and Competence Committee.

[21] Reference is made in Aston to the test applied in criminal appeals. In Scotland the test that is used in that context is different from that in England and Wales; the concept of “safety” is not employed, and instead the critical question is ultimately whether a miscarriage of justice has occurred. In relation

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to defective representation, the classic formulation is found in Anderson v HM Advocat, at 43–44. It is there stated that the accused’s right to a fair trial “includes the right to have his defence presented to the court”. In some circumstances the conduct of the accused’s legal representatives may amount to a ground of appeal. For that: “The conduct must be such as to have resulted in a miscarriage of justice. . . . It can only be said to have resulted in a miscarriage of justice if it has deprived the accused of his right to a fair trial. That can only be said to have occurred where the conduct was such that the accused’s defence was not presented to the court” (at p.44).

In our opinion that formulation gives some guidance in cases such as the present. The expression “not presented” perhaps calls for some further comment. At least in a case where a party to proceedings represents him or herself, we are of opinion that to avoid a miscarriage of justice it must be possible to say that the defence was adequately presented, so that the arguments in the party’s favour appeared with sufficient clarity.

[22] Further guidance can be obtained from cases where it was argued that an appellant’s case was not properly presented in professional disciplinary proceedings. One such case is Sutherland-Fisher v Law Society of Scotland, a case involving disciplinary proceedings against a solicitor for matters that had formed the subject of criminal proceedings. It was asserted that the solicitor would be unable to obtain a fair hearing in the absence of legal representation before the disciplinary tribunal, in breach of art.6(1) of the European Convention on Human Rights. It was held (para.20) that whether legal advice and representation is required must depend upon the facts of each individual case; the test to be applied was that of indispensability, and it was for the solicitor to demonstrate that at the tribunal hearing the provision of legal representation on his behalf would be indispensable in the sense that without such representation he would not be able to present his case properly and effectively and thus could not receive a fair hearing. On the facts of the case under consideration, the court was not satisfied that the subject-matter of the disciplinary hearing was particularly complex, and it was not necessary, at least ab ante, that legal representation should be available.

[23] We note that in the present case the appellant is a nurse, not a solicitor.

Furthermore, it seems to us that the facts of the present case are complex; the case against the appellant is a circumstantial case based on an elimination exercise involving voluminous documentation. The appellant’s defence requires a rigorous analysis of that elimination exercise, and of the documentation and written statements produced in support of it; that applies in particular to the documentation that might disclose whether the incidents involving the use of four or eight tablets were associated with patient transfers. When the overall presentation of the case is considered, we are of opinion that it cannot be said that the appellant’s case was adequately presented. Documentation was absent; cross-examination was not properly conducted; and the fundamental criticisms made by the appellant of the Trust’s case do not seem to have emerged clearly.

[24] In these circumstances we consider that this is a case where, owing to its complexity and the volume of documentation, legal representation was essential if the appellant’s defence was to be presented properly. While the appellant had apparently obtained representation during the period prior to the hearing, it is clear that her solicitor, Mr Muir, wholly failed to conduct any effective preparations. He did not even advise the appellant about the lack of

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preparation until four days before the hearing. The result was that the appellant’s defence was not properly presented to the Committee. We accordingly consider that the test in Anderson is satisfied. If the test applied in the English cases is used, without reference to the criteria used in criminal appeals, we consider that the appellant’s legal representation prior to the hearing was of a standard that fell well below that of any competent lawyer.

Furthermore, the appellant’s own conduct of the hearing itself was clearly inadequate in a number of respects; this was perhaps to be expected in view of her lack of legal knowledge and experience. The preparation and presentation of the case are linked through the failure to obtain adequate documentation to present the defence. We are therefore of opinion that the test laid down in cases such as Aston, to the extent that it may differ from Anderson, is satisfied.

Sutherland-Fisher can in our view be readily distinguished, as the present circumstances are much more complex; furthermore, the appellant in that case was himself a lawyer, and the charges had been the subject of previous criminal prosecutions. In all these circumstances we are of opinion that the appeal must be allowed on the basis of inadequate representation.

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2. The alleged error of law in the methodology relied upon by the respondents and accepted by the Conduct and Competence Committee

[25] The appellant’s second ground of appeal is that the Conduct and Competence Committee erred in law by accepting the methodology relied upon by the respondents to identify the person said to be responsible for taking Cyclizine without authorisation. As we have noted, there was no direct evidence against the appellant; the case against her was circumstantial. It was not, however, a circumstantial case based on inferences drawn from a range of adminicles of evidence, where the individual items of evidence strengthen one another, and the elimination of one item is not necessarily fatal to the whole case. Instead, the case against the appellant was based entirely on an elimination exercise. In such a case, if the methodology used in the exercise is shown to be flawed in a material respect, the whole case must inevitably fail. We have already summarised the main criticisms that were made of the methodology used in this exercise. Three main issues arose: the assumption that only one member of staff was involved; the practice of removing tablets, four at a time, by staff involved in patient transfers; and the allocation of staff to shifts, and in particular the presence of staff during the periods immediately before and immediately after their shifts.

[26] The elimination exercise was based on the nursing staff rota. It proceeded on the fundamental assumption that, if a nurse was not on duty during a period when Cyclizine tablets appeared to have gone missing, she was eliminated from the investigation. On this basis, staff of the NHS Trust went through the rota incident by incident and eliminated any nurse who was not on duty at the time when tablets went missing. In this way nurses were eliminated one by one until only two nurses remained; these included the appellant. Apart from the nursing rota, the rotas for doctors and cleaners were also analysed; the conclusion was that no single doctor or cleaner was thought to have been on duty on every occasion when tablets had gone missing. In that way they were all eliminated.

[27] The first criticism of the methodology was the assumption that only one person was involved. We were not referred to any evidence that suggested affirmatively that only one person could have been involved. Consequently this was no more than an assumption. If it were incorrect, it is obvious that the elimination exercise would have been defective. For example, if a particular

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nurse was not on duty during the time when the first incident occurred on 6–7 June 2011, she would be eliminated from further stages in the enquiry. If, however, one nurse had been responsible for the first incident only and another nurse had been responsible for all of the remaining incidents, the result would inevitably be flawed.

[28] The foregoing point is of particular importance in relation to the seventh, eighth, ninth and tenth incidents, where quantities of four and eight tablets went missing. There was evidence that tablets, in quantities of four, were taken without recording the fact when patient transfers took place. If any of those four incidents was attributable to a patient transfer, the result would be once again that the exercise was flawed; the presence or absence of the appellant or any other nurse during the shift in question would be irrelevant to the exercise that was being carried out. This is why those four incidents were important, and it is clear that they were founded on heavily by the appellant in her presentation of the case. As already noted, in the course of the hearing she tried to obtain records that would establish that patient transfers took place on the dates in question, but the Committee refused to allow her to recover those documents. In our opinion this placed the appellant at a serious disadvantage in trying to establish her defence.

[29] Furthermore, the appellant gave evidence that nurses were present in the ward both before and after the shifts that appeared on the rota. This is hardly surprising; in a hospital ward staff are likely to come on duty shortly before they are due to start work, to ensure a smooth handover from shift to shift. At the end of a shift, tasks may require to be completed, whether specific nursing tasks or paperwork. It is therefore not surprising if staff stay on for a short time after their shifts have been completed. The Trust’s methodology, however, assumed that if tablets disappeared during a shift (at any time during that shift) only the staff recorded as being on duty for that shift were considered possible culprits, and all other nursing staff were eliminated. It is obvious that if the tablets were taken by a nurse who was present in the ward but not recorded as being on duty during the shift in question, that nurse would inevitably be eliminated, incorrectly. For this reason it appears to us that the failure to take account of nursing and other staff who were on duty before and after shifts is a serious flaw in the methodology. The appellant attempted to raise this during her presentation of her defence, as noted at para.17 above; she received an answer that was manifestly incomplete but, no doubt owing to her inexperience, she did not follow it up with adequate cross-examination.

Despite this, the defect in the methodology seems to us to be obvious.

[30] Moreover, specific criticisms were made of the treatment of particular incidents. The fifth incident involved the disappearance of 29 tablets, which, according to the written elimination exercise (supplementary appendix, p.262), were “missing between 11th–12th August”. The elimination exercise is performed in respect of the day and night shifts on 11 August and the day shift on 12 August. When the written record of the daily check of Cyclizine usage is examined, the time when the tablets went missing is not recorded (supplementary appendix, p.20). It is therefore possible that a member of staff on duty on the night shift of 10 August, which would have continued until the morning of 11 August, could have taken the tablets. All of those who were not on duty on the three named shifts, however, were eliminated. This illustrates the basic flaw in the methodology, of confining the exercise to those recorded as on duty during particular shifts, without regard to the possibility that a person on duty in another shift might have had access to the drugs during the relevant period.

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[31] Likewise in the seventh incident, when eight tablets were recorded as missing on 13 September, it is recorded (p.264) that the Cyclizine was checked during the early shift on that date and again at 22.00 on the same day. The early shift, however, ran from 7 am to 2 pm, and would overlap with those working the night shift (8 pm to 7.30 yam) on 12 September. A similar point can be made in connection with the tenth and eleventh incidents. The fundamental criticism is that the identification of the relevant shifts depends on the identification of the time when the tablets went missing, and as those times were only recorded in very general terms there was an overlap of shifts that might be relevant. Despite this, only those on duty during a limited number of shifts were taken into account in the elimination exercise. This seems to us to be a fundamental flaw.

[32] In the Committee’s consideration of the issues, and in particular in its decision, no serious attempt is made to address the robustness of the NHS Trust’s methodology. In particular, in relation to the possibility that tablets were removed in connection with patient transfers, the Committee stated that it could not be satisfied that any patient transfers took place on the relevant dates and therefore that any transfer documents existed. Nor could it be satisfied that any documents that might exist would actually contain any information about the use of Cyclizine during these patient transfers nor could this explain the higher quantities that went missing. In our opinion this shows a failure to understand a number of critical points. First, if the appellant was denied the opportunity to recover records of patient transfers, it is hardly surprising that she could not establish that patient transfers took place on particular dates. Secondly, unless an order for recovery of documents was granted it was obviously impossible to know whether documents actually existed; that is one of the reasons for granting such an order. Thirdly, the appellant accepted that patient transfers would not explain the high quantities that went missing on some occasions. The patient transfers were relevant as explaining the four smaller incidents, and that was important because those four incidents were fundamental to the elimination exercise; if no tablets were wrongfully taken on those occasions it is likely that false eliminations would have taken place. The Committee’s failure to understand this last point appears to us to be of critical importance.

[33] The appellant’s dismissal was the subject of proceedings before an Employment Tribunal, which decided her case in July 2012. The decision of the Employment Tribunal was available to us, and it stands in marked contrast to the decision of the Committee. It discloses (para.4.9) that Mrs Jaffray gave evidence that the result of the elimination exercise was that the person responsible for the unauthorised removal of tablets was either the appellant or another named employee. The elimination exercise itself could not decide between those two. Consequently the Trust had looked for other evidence in the period before May 2011 to discover who was responsible. They discovered that large amounts of Cyclizine had been used in October and December 2010, when the other named employee was on annual leave but the appellant was present. On that basis it was decided that the culprit must be the appellant.

The methodology used in this connection was severely criticised by the Employment Tribunal. In particular, it had not been considered whether other members of staff who had already been eliminated could have been responsible for the thefts in 2010. There was thus a clear change in the methodology.

Furthermore, the assumption continued that only one person was responsible.

[34] The Employment Tribunal’s criticism of the Board’s methodology continued at paras 11–18. They expressed concern at the robustness of the

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elimination procedure in that it was based on the assumption that there could only be one thief. They also expressed concern about the stark nature of the elimination exercise: it was assumed that if someone could be shown not to have been guilty on one occasion they should be entirely eliminated. They describe themselves as being “troubled” by the elimination of the other named employee through consideration of thefts in 2010. In conclusion, the Employment Tribunal described the appellant’s evidence as “convincing and cogent”, and reiterated the concerns that they had about the circumstantial case against her and the methodology underpinning it, but concluded that it had not been established that her dismissal was unfair, for reasons that were not connected with the validity of her defence to the charges. In our opinion these criticisms are well founded.

[35] We are accordingly of opinion, for the reasons set out at paras 25–32 above as well as those given by the Employment Tribunal, that the methodology used by the NHS Trust to incriminate the appellant could not properly have been accepted by any disciplinary committee that directed itself properly on the law and assessed the evidence in a rational manner. We consider that the appellant’s principal criticisms of that methodology are soundly based. For that reason we are of opinion that the decision of the Conduct and Competence Committee of the respondents cannot stand.

[36] Article 38 of the Nursing and Midwifery Order 2001 regulates appeals from the Conduct and Competence Committee of the respondents. In particular, art.38(3)(b) confers power on the court to allow an appeal and quash the decision appealed against. In the present case, because we consider that the methodology used in the case against the appellant was fundamentally flawed, we consider that that is the appropriate remedy. We will accordingly allow the appeal and quash the decision of the Conduct and Competence Committee of the respondents.

For the appellant: Logan, instructed by Balfour + Manson LLP, Solicitors, Edinburgh.

For the respondent: Anderson, Solicitor advocate, instructed by Nursing and Midwifery Counsel, Edinburgh.

E

F

G

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A COURT OF SESSION

7 November 2014

Outer House Lord Boyd of Duncansby THERESE MARGARET MCAULEY OR CHALMERS

Pursuer

B

against CHRIS JOHN WILLIAMS CHALMERS (otherwise) CHRISTOPHER CHALMERS

Defender

Reduction—Forged signature—Disposition in favour of pursuer without her knowledge—Subsequent disposition using forged signature—Original disposition probably for tax purposes—Whether court should exercise discretion to grant reduction The action of reduction concerned a disposition which purported to convey property from the pursuer to the defender for love, favour and affection. It was a matter of concession that the signature, which purported to be that of the pursuer, was forged. The pursuer was the mother of the defender who had been married to his father for about 30 years. Divorce was granted in February 2013 and the financial issues between the parties were settled by a joint minute of agreement. She had been a partner in a firm, along with her then husband, which rented properties. The partnership was dissolved with the signing of the minute of agreement and her husband continued with the business. One of the main issues in the case was whether or not the property conveyed by the disposition was part of the firm’s portfolio.

The property was purchased in 1998 using the family solicitors. The transaction was instructed by the pursuer’s husband and the title was taken in the name of the pursuer but on the instructions of her husband. The account rendered by the solicitors for the transaction included a cash statement showing that the transaction was on behalf of the firm and an invoice made out to the firm was included. It was accepted that the purchase of the property was not for the purpose of making a gift to the pursuer. She had been unaware of the purchase until a search of the property registers was carried out for the purposes of the divorce. She was not aware that the title had been taken in her name. The property itself had not been included in the accounts of the firm and that was a deliberate act by the pursuer’s husband. It was not proved that the defender had been in some kind of collusion with his father to defraud his mother.

A consequence of a successful action of reduction being raised and being successful before the conclusion of the divorce action would have been that the property would have been part of the matrimonial property and would have to have been included in the property belonging to the pursuer; the pursuer therefore awaited until after the divorce settlement before raising the action.

The defender had not received any rent from the property while it was being rented, but in fact the rent from the property had been paid to the pursuer’s husband.

Counsel for the pursuer submitted that it was accepted that the signature on the disposition was a forgery and accordingly it was a nullity. If the court did not reduce the disposition it would be endorsing a fraud. It was surprising that the court was being asked not to reduce the disposition on some equitable basis. The defender was sitting on a windfall to which he was not entitled.

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Counsel for the defender submitted that the pursuer had no title or interest to raise an action for reduction. The beneficial ownership of the property was in the partnership and not in the pursuer, however, the pursuer had renounced any interest in the firm in the minute of agreement. The question of whether to grant reduction of the title was a matter for the discretion of the court.

Although it could not be said that the pursuer had condoned the granting of fraudulent disposition, she had made an informed decision when she signed the minute of agreement and having done so she was personally barred from seeking reduction. The defender had obtained the property in good faith and had spent money on it. He was now living in the house as his home. Whatever considerations affected financial arrangements for the divorce, the defender would lose the property if decree was granted and the court should exercise its discretion by refusing decree.

Held (1) that the property never formed part of the firm’s portfolio and the pursuer could not, therefore, have held it in trust for the firm (paras 80, 85); and (2) that having regard to the fact that it was never intended that the pursuer should have had a beneficial interest in the property, that she had delayed raising the instant action beyond the signing of the minute of agreement and that the defender had not participated in any fraud on the pursuer the decree of reduction should be refused (para.93).

Cases referred to:

D

William Dodd v Sutherlend Pacific Personal Loans [2006] CSOH 93; 2006 SLT 823 Hyslop v Flaherty (I.H.) 1993 S.C.L.R. 851; 1993 S.C. 588; 1995 S.L.T. 2 Lockyer v Ferryman (1877) 4R. 32 Longmuir v Moffat [2009] CSIH 19; 2009 S.C. 329 Robertson’s Executrix v Robertson, 1995 S.C. 23; 1995 S.L.T. 429.

The full circumstances of the case and the arguments of counsel are set out in the following opinion of the Lord Ordinary, which was delivered on 7 November 2014.

LORD BOYD OF DUNCANSBY

E

Introduction

F

[1] This is an action of reduction of a disposition. The property to which it refers is a flat at 38 Hotspur Street, Glasgow. The disposition purports to convey the property from the pursuer to the defender for love, favour and affection. It purports to have been signed and executed by the pursuer in the defender’s favour on 16 March 2006. It was recorded in the Land Register on 9 April 2008. It is a matter of concession that the signature, which purports to be that of the pursuer, was forged.

[2] The pursuer is the defender’s mother. She was married to Paul Chalmers, the defender’s father for about 30 years. There are two children of the relationship, the defender Chris (otherwise Christopher) Chalmers and a daughter, Natalie. Therese Chalmers and Paul Chalmers were divorced by decree of the Court of Session in February 2013. The financial issues between the parties were settled with the signing of a minute of agreement dated 12 November and registered in the Books of Council and Session on 15 November 2012.

[3] The pursuer and Paul Chalmers were formerly the sole partners in a firm called Rentier Property. (In many documents the firm is known as Rentier

G

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Properties. However the name used by Inland Revenue/HMRC and in the minute of agreement is Rentier Property.) The firm rented out a number of properties. It was in effect a family business. It was not a matter of dispute that although Mrs Chalmers was a partner in the firm the business was handled by Paul Chalmers. The partnership was dissolved with the signing of the minute of agreement and Paul Chalmers continued on with the business.

[4] One of the main issues in the case is whether or not 38 Hotspur Street was part of the Rentier Property portfolio.

A

Witnesses

B

[5] Evidence was led for the pursuer from the pursuer herself, Janice Jones, a solicitor with Harper Macleod and Anne Moore, accountant. Evidence for the defender came from the defender and Paul Chalmers. Excepting Ms Jones and Ms Moore none of the main witnesses in this case emerge with any great credit.

[6] Mrs Chalmers has initiated this action against her son. She told the court that at one point the relationship between them had been very good; he was always loving and protective. As a result of this case it was now very bad.

While she appeared to regret the present state of their relationship her attitude appeared to be one of cold detachment. Her case against her son is not just that he is a passive recipient of a windfall to which he is not entitled but that he was an active participant in a fraud perpetrated on her. For reasons given below, I am satisfied that the evidence does not support this allegation.

[7] Mrs Chalmers was justifiably indignant that her signature had been forged but there appeared to be no similar sentiment that a property had, according to her, been put into her name without her consent. I was not clear why she thought that she was any more entitled to the property than her son.

She accepted that it was not intended as a gift to her. Mrs Chalmers was clearly unhappy with the terms of the divorce settlement; she said that was unhappy at the time she signed the minute of agreement because her husband had not given any information about the property at Hotspur Street. It seems clear that Mrs Chalmers has brought this action as a means of redressing what she sees as an imbalance in the divorce settlement.

[8] While I questioned Mrs Chalmers’ motivation in this action I considered that the evidence she gave was on the whole truthful.

[9] Chris Chalmers is 26 years old and the son of Therese and Paul Chalmers. He is a property manager at D J Alexander. He is by virtue of the disposition which is the subject of this action the proprietor of 38 Hotspur Street, Glasgow. He has lived there “for two months�. He became quite angry during his evidence when discussing his mother. I thought that this was understandable. At times his evidence lacked candour particularly when dealing with questions regarding the income from Hotspur Street during his ownership and before he commenced living there.

[10] It appeared to me that Chris Chalmers has been placed in an invidious position by the actions of his parents. He had to accept service of the divorce summons on the part of his father. That appears to have brought him into the heart of the dispute between them. He finds himself as the ostensible owner of the property but, until he moved into the property the benefit of the rental income went to his father or latterly to Rentier Property. He is the defender in an action raised by his mother which must be an unpleasant experience. I formed the view that a possible reason for some of his vague and evasive answers was a misguided attempt to protect his father from possible investigation by HMRC.

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[11] Paul Chalmers is the former husband of the pursuer and father of the defender. Mr Chalmers was shown the disposition conveying the title in 38 Hotspur Street to Christopher. He accepted that he witnessed what purports to be Therese Chalmers signature. He was asked if he had forged his wife’s signature. Before answering I warned him that he was not obliged to answer the question if the answer might incriminate him in the commission of a criminal offence. In the event he did answer with the words, “I cannot recollect.” I did not consider that was a convincing answer and I did not believe him. Apart from Paul Chalmers no one presents themselves as a possible candidate to having forged Mrs Chalmers’s signature other than perhaps the defender, Chris Chalmers. I am satisfied that he did not do it.

From my findings it appears that, at the very least, Paul Chalmers was engaged in tax avoidance by not declaring income from Hotspur Street. He also appears not to have disclosed that income in the course of the divorce proceedings. On the whole I did not find him a credible or reliable witness and I looked for supporting evidence when considering his version of events.

Purchase of 38 Hotspur Street

[12] The property at 38 Hotspur Street was purchased in 1998. The solicitors who acted in that purchase were Hennesy Bowie & Co, Bishopbriggs, Glasgow.

They were the family solicitors. On this occasion the solicitor who dealt with the purchase was Christine Muirhead who has since died. All the correspondence is with Paul Chalmers and it is clear that he instructed the purchase and dealt with all the correspondence relating to it. There is no record of an instruction to put the property in Mrs Chalmers’ name.

[13] There was no clear explanation as to why the title was taken in the name of Mrs Chalmers. I am satisfied that this was done on the instructions of Paul Chalmers. Paul Chalmers was asked why it was put in his wife’s name.

The question was objected to by Mr Tariq on the basis that there was no record. I allowed the question under reservation but I am satisfied having regard to the terms of answers 2 and 3 that the question was appropriate.

[14] However Paul Chalmers answer was vague and unconvincing. He said that in 1995 property had been put in his wife’s name and that he had been standing as guarantor. I was not clear on the relevance of this answer.

[15] He said that 38 Hotspur Street had been bought as a Rentier Property flat for rental. Other properties had been bought in his sole name. One had been bought in his name trading as “Rentier Properties”. Another had been purchased in joint names.

[16] Hennessy Bowie corresponded with Paul Chalmers at the matrimonial home. The letters produced to the court make no mention of who should be shown on the title as the owner of the property. Mrs Chalmers is not mentioned in any of the letters. Nor does the name Rentier Property appear on the face of the correspondence. However on 23 October 1998 the solicitors wrote to Paul Chalmers and included an invoice made out to “Rentier Properties” with the address given as the matrimonial home. A cash statement shows “the intromissions of Hennessy Bowie & Company, Solicitors, Bishopbriggs on behalf of Rentier Properties in connection with purchase of flat 1/1, 38 Hotspur Street, Glasgow.” This shows a purchase price of £37, 575. The firm’s fees and outlays amounted to £440.50 making a total of £38,015.50. From that is deducted a payment to account of £16,233.69. The payment to account left the sum of £21,781.81. From that is deducted an item referred to as “Loan proceeds from Garioch Road, Glasgow” in the sum of £21,429.31 leaving a sum due of £352.50. The invoice was paid by two cheques

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and acknowledged in a letter addressed to Paul Chalmers on 4 December 1998.

[17] Paul Chalmers told the court that the payment to account was money from his savings. He said that this was money he was putting into the business to build it up. The “Loan proceeds from Garioch Road, Glasgow” refers to a loan from National Westminster Home Loans Ltd. The title to Garioch Road is in the name of Paul Chalmers. However his position was that Garioch Road belonged to Rentier Property. It is shown in the accounts as a Rentier Property property.

[18] Mrs Chalmers said that she did not know the source of funds for Hotspur Street. She accepted that the properties which formed the Rentier Property portfolio were held sometimes in Paul Chalmer’s name and sometimes in joint names but in each case they were held in trust for the firm.

She accepted that it was not intended that the purchase of 38 Hotspur Street was a gift to her.

A

B

Mrs Chalmers’ knowledge of 38 Hotspur Street

[19] Mrs Chalmers told the court that she did not know about the purchase of the property and that she only found out about it during the divorce. Her solicitor Janice Jones had done some research through the Land Register and discovered the property in her son’s name. This was some months before the divorce action was commenced in November 2012.This evidence was disputed

by Paul Chalmers. He said that his wife was aware of the purchase in 1998.

There was a lot of work done by him on the property and it would have been the subject of discussion at home. They would talk about many things to do with the business and the properties they owned particularly matters such as colour and décor. He had taken Chris to the flat when he had been working on the flat and he said that his wife would have been aware of where they had been and the reason for going there.

[20] Chris Chalmers said that he first went to 38 Hotspur Street when he was ten years old. His father was working on the premises and he went to help.

He said that he was probably more of a nuisance than a help. Mrs Chalmers said that she was unaware of work being done on the property by Paul Chalmers and was not aware that Chris had been taken there by his father while he worked on the flat.

[21] On 27 November 1998 a letter was sent addressed to Mrs T M Chalmers at the matrimonial home by Robert Anderson, property and estate agents, the factors on the block of flats at 38 Hotspur Street. The letter was headed “Cleaning of common close and staircase, 38 Hotspur Street, Glasgow”. The letter complained that the stair was not being cleaned in accordance with the local byelaws. It enclosed an extract copy relating to the cleaning of these areas and trusted that there would be a marked improvement when they next called. Mrs Chalmers denied seeing that letter.

[22] The factors also invoiced Mrs Chalmers for her share of ground burdens, insurance, mutual repairs, etc. These invoices for the periods ending Martinmas 1998, Whitsunday 1999, Martinmas 2000 and Whitsunday 2001, were sent to Mrs Chalmers at the matrimonial home. Mrs Chalmers denied seeing any of these invoices. Paul Chalmers said his wife was aware of correspondence relating to the firm coming to the matrimonial home. She would open some of the letters. He accepted however that he would have dealt with them.

[23] The invoice dated Whitsunday 1999 was paid with a cheque signed by Paul Chalmers drawn on the account of Rentier Property. After Whitsunday

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2001 the invoices were sent to Mr P Chalmers at D J Alexander, a firm of estate agents and property managers in which Paul Chalmers had a business connection.

[24] Chris Chalmers told the court that he had had two discussions with his mother about Hotspur Street. These had taken place in 2010, once in Starbucks and on another occasion at the Corinthian Club in Glasgow.

He said that his mother was aware of Hotspur Street and the fact that he was the owner. He had said that he was trying to sort out the divorce so he had stayed quiet. He did not think that it would help if he had got into that matter.

[25] Mrs Chalmers denied meeting Chris Chalmers in the Corinthian Club in Glasgow in 2010 and discussing Hotspur Street. She denied that in the course of the conversation she had told him that she knew he was now the owner of the property and that she had been annoyed about the disposition.

She did accept that there had been a discussion with Chris in the Corinthian Club but it was after the commencement of the divorce proceedings.

[26] It became clear in cross-examination of Chris Chalmers that the discussion with his mother was initiated by the service of the divorce summons on him, his father being in Dubai at the time and not having any legal representative in Scotland. The summons was served on Chris Chalmers on 24 February 2012. Despite this being pointed out to him he continued to insist that the discussion between him and his mother was in 2010.

[27] On this issue I preferred the evidence of Mrs Chalmers. There was a discussion between Mrs Chalmers and her son about Hotspur Street but it took place after the commencement of the divorce proceedings. It was prompted by Ms Jones’s search which had disclosed the existence of the disposition in favour of Chris Chalmers.

[28] Mrs Chalmers was represented in the divorce action by Janice Jones of Harper Macleod. She gave evidence that Mrs Chalmers first became aware of 38 Hotspur Street in the course of the divorce action. At that time Paul Chalmers was in Dubai and was representing himself. It fell on the pursuer to make investigations and it was in the course of the investigations that they found out about the property in Christopher’s name. She had asked the Keeper of the Registers for a copy of the disposition. Immediately it had been shown to Mrs Chalmers she had said that it was not her signature.

[29] Given that Rentier Property was in effect the family business and that Mrs Chalmers was a partner in the firm one would expect that Mrs Chalmers would have known of the purchase of 38 Hotspur Street. I accept that despite being a partner Mrs Chalmers took little to do with it and business affairs were all handled almost exclusively by Paul Chalmers. Nevertheless it might seem natural, as Paul Chalmers claimed in evidence that she would know of work being done in Hotspur Street and see invoices coming to the house. One might also expect that Mr and Mrs Chalmers might have discussions about décor and colours. However I believed Mrs Chalmers when she told the court that the first that she knew of 38 Hotspur Street was when she was advised by her solicitor of the existence of 38 Hotspur Street, that she appeared to have at one time been the owner but that it was now owned by her son. She appeared to have been genuinely astonished by this information. Her evidence found support in the evidence of her solicitor Janice Jones who said that the fact that Mrs Chalmers had title to this property was found during the course of a property search and that she had not known of it before then.

[30] On balance I have come to the view that Mrs Chalmers was unaware of the purchase of 38 Hotspur Street. I also accept that she was not aware of

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38 Hotspur Street until the search conducted by Ms Jones revealed its existence. I am satisfied that she knew nothing about the title being taken in her name.

A

Rentier Property Accounts

[31] Ann Moore was an accountant and was the principal of Barry Moore & Co until her retiral in March this year. She knows Mrs Chalmers having met her through her husband Paul Chalmers. She also knows their son, Chris Chalmers who has his own cleaning business. Paul Chalmers had been a client since 2002 and she had prepared the accounts for the firm of Rentier Property since then. She also prepared Mrs Chalmers’s own personal tax return.

[32] She said that Rentier Property did not have any employees. Paul Chalmers dealt with all the business matters. It was from him that she obtained information for the accounts. She sent a letter to the firm each year requesting information and it was either posted to her by Paul Chalmers or there was a meeting with him. Although she prepared her tax return she did not deal with Mrs Chalmers in relation to Rentier Property. Ms Moore would prepare the accounts and they would be sent out to the firm at the home address. They would always be signed by Paul Chalmers.

[33] She had not heard of 38 Hotspur Street until a few months before the proof. She had been asked to put it into the accounts for 2013 but before that she had no knowledge of that property. No income had been shown for Hotspur Street. Even if no rental was obtained from a property within the portfolio the property would be shown in the accounts. She had not seen any factoring invoices for the property but said that if they were for the period before 2002 when she became the firm’s accountant then she would not have expected to see them. If she had been informed that 38 Hotspur Street was part of Rentier Property she would have shown it in the accounts. If she had been asked to put through any expenses relating to Hotspur Street then she would have questioned it.

[34] There was no direct evidence before the court as to the position before 2002. Schedules to accounts were produced commencing in the year ending 31 March 2006 to the year ending 31 March 2011. From the year ending 31 March 2007 the schedules include the details of properties pertaining to Rentier Property. 38 Hotspur Street does not appear in any of these schedules.

[35] Paul Chalmers said that 38 Hotspur Street was rented out. He could not explain why the rental income was not seen in the accounts. He told the accountant in 2013 about Hotspur Street and it was included in these accounts. So far as 2010–11 is concerned he said that there was no rental income in that year. He accepted that he had signed the declaration that the accounts were true and accurate. He said that he had not knowingly given false information to HMRC. [36] It was put to him that if 38 Hotspur Street did not form part of Rentier Property then the accounts would be accurate. His reply to that question was that he did not know. He then described himself as a naïve businessman. I do not accept that Paul Chalmers is naïve.

[37] Ann Moore was a good witness and I had no difficulty in accepting her evidence that she had not been informed of the existence of 38 Hotspur Street as a property belonging to Rentier Property before she was instructed to include it in the 2013 accounts. I am satisfied that there was a deliberate decision by Paul Chalmers not to include 38 Hotspur Street in the firm’s accounts.

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The transfer of 38 Hotspur Street to Chris Chalmers

[38] Paul Chalmers said that in 2006 he and his wife agreed that the title should be transferred to their son, Chris. As I understood it the reason was simply to give him a property to get a start in life. He had subsequently made a similar provision for his daughter, Nicola.

[39] Chris Chalmers said that he did not know too much about the transfer of the flat into his name in 2006. There was he said discussion in the family though he was not more specific as to when such discussions took place or who was involved.

[40] Neither Paul nor Chris Chalmers were able to give any details on when or where the “discussions within the family” had taken place. I accept that at the time Chris would only have been 18 and since he was to be the recipient the principal discussions might not have involved him. However I formed the impression that Chris was particularly uncomfortable when he gave that evidence and I was not convinced by it.

[41] Paul Chalmers said that he had instructed Christine Muirhead of Hennessy Bowie to draft the disposition in favour of Chris. On 16 March 2006 she sent a letter to Paul Chalmers at Messrs Alexanders, 49a Bath Street, Glasgow, (not, I note, the matrimonial home) marked “Strictly private and confidential”. It enclosed a disposition of the property in favour of Chris and an affidavit, both to be signed by Mrs Chalmers. It also included a Stamp Duty Land Tax form to be signed by Chris. The letter stated that Mrs Chalmers’s signature required to be witnessed but it also informed him that he could be a witness.

[42] Paul Chalmers confirmed that the signature that appears as witness to Mrs Chalmers’s signature is his. As noted above “he could not recollect” if he had forged his wife’s signature.

[43] Mrs Chalmers said that she never signed anything and that when she was shown the disposition in favour of her son it was clear that it was not her signature. The parties agreed in a joint minute that the content of a forensic science report by Stephen Cosslett BSC was a true and accurate statement of his evidence. Mr Cosslett concluded that there was conclusive evidence that Mrs Chalmers did not sign the disposition. It was in any event a matter of concession. I heard no evidence as to what might have happened to the affidavit which was sent with the disposition for signature by Mrs Chalmers.

[44] I am satisfied from this evidence that there was no discussion with Mrs Chalmers about putting the title to 38 Hotspur Street in Chris’s name. If there had been I can see no reason why her signature would have to be forged. The evidence in my opinion points to a deliberate attempt by Paul Chalmers to keep his wife in the dark about the transfer of the property to Chris.

[45] Chris Chalmers said that he was not aware at the time of a disposition in his favour being signed. He did sign the land tax forms. He said he was given the paperwork by his father. He signed it as the purchaser of the property and handed it back to his father. He did not know what happened to it after that. He appeared to accept that he might have filled in the form though that was only to include details of the purchaser and seller.

[46] The disposition appears to have been returned to Christine Muirhead along with the SDLT form. It was not registered at that time and the SDLT forms appear not to have been lodged with HMRC. Christine Muirhead died suddenly sometime after the return of the disposition in 2006. In February 2008 Alistair Bowie of Hennessy Bowie emailed Paul Chalmers saying that a trawl through her paperwork had uncovered deeds relating to 38 Hotspur Street but this had not been completed. Subsequently Chris Chalmers made

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out a new SDLT form and the title was recorded in the Land Register. Chris Chalmers said that he had first seen documents which confirmed that he was the owner of Hotspur Street in 2011 but was aware of his ownership before then.

[47] In his written submission Mr Tariq submitted that Chris Chalmers had “some involvement” in the fraudulent transaction. He submitted that his evidence that he did not know what he was signing was utterly unconvincing.

It was not clear to me whether or not it was being suggested that Chris had knowledge of the forgery. I doubt that he had any knowledge of the forgery. I am not satisfied that the mere signing of the SDLT forms means that he had “some involvement” in the fraud. These forms were given to him by his father and he signed them. He clearly knew that he was getting the title to 38 Hotspur Street but that does not mean that he was in some kind of collusion with his father to defraud his mother.

A

B

Divorce

[48] Mrs Chalmers told the court that the relationship between her and Paul Chalmers had started to go wrong in 2007 when her husband went to work in Dubai. According to her they separated in 2008 although that was a matter of dispute in the divorce and remained unresolved.

[49] The division of property including those properties that formed part of Rentier Property portfolio was one of the issues in the divorce action. Initially at least Paul Chalmers represented himself. The condescendence in the action of divorce set out on Mrs Chalmers’s behalf her understanding of the matrimonial property. It did not include 38 Hotspur Street as part of the matrimonial property. However it did make averments to the effect that the pursuer had discovered that a property at 38 Hotspur Street was formerly registered in her name. The averments continued to the effect that in 2006 the defender had made arrangements for the property to be transferred into the name of their son, Christopher Chalmers. She averred that she had no knowledge of signing a disposition to that effect.

[50] Mrs Chalmers told the court that Paul Chalmers had refused to cooperate in making full disclosure of matrimonial assets. Nothing was ever said by him throughout the divorce about Hotspur Street.

[51] On 21 March solicitors acting for Paul Chalmers sent Janice Jones a list of matrimonial property. It did not include Hotspur Street. Mrs Chalmers confirmed that she saw the email.

[52] As part of the divorce settlement a minute of agreement was entered into by Mrs Chalmers and Paul Chalmers. It was registered in the Books of Council and Session on 15 November 2012. Amongst other things it provided for Mrs Chalmers’s resignation from the partnership and an election for the continuation of the partnership business. Save as otherwise provided for Mrs Chalmers’s rights and interests in the partnership assets, capital accounts and partnership income were transferred to Paul Chalmers. Both parties renounced any right they may have against each other.

[53] Mrs Chalmers acknowledged that if the disposition had been reduced before the divorce settlement it would have formed part of the matrimonial property and fall to have been dealt with as part of the settlement. She also acknowledged that she had signed the minute of agreement in the knowledge that her signature on the disposition had been forged.

[54] Janice Jones told the court that there was little in the way of discussions between the parties regarding Hotspur Street. It was never suggested by Paul Chalmers that it was held in trust for Rentier Property. Mrs Chalmers regarded

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it as a matter between herself and Chris as it was in his name. Ms Jones advice to Mrs Chalmers had been that it remained separate.

[55] Janice Jones acknowledged that at the time of entering into the minute of agreement she and Mrs Chalmers were fully aware that the disposition in favour of Chris Chalmers had been signed in 2006 and registered in 2008 and was aware that Mrs Chalmers denied signing the disposition. She said that the reason why an action of reduction of the disposition was not commenced before then was that Mrs Chalmers was already engaged in one Court of Session action and it was thought better to wait until it had been concluded before raising another action. She acknowledged that if an action of reduction had been successful before the conclusion of the divorce action the property would have been part of the matrimonial property. When challenged again as to why the pursuer had waited until after the divorce she said that at that point they did not have a report from a handwriting expert. However she then conceded that the summons in this action had been signetted and served before they had an expert report.

[56] I did not find either Mrs Chalmers’ or Ms Jones’s evidence on this point satisfactory. It is clear that there was a deliberate decision not to commence these proceedings until after the divorce had been finalised. I formed the view that the reason for the decision to delay commencing proceedings was that if the disposition was reduced before the minute of agreement was signed and the divorce finalised the property at 38 Hotspur Street would then be in Mrs Chalmers name. Whether she was holding the title in her own name or in trust for Rentier Property would not at that stage have mattered. It would have been available as part of either the matrimonial property or the partnership property and the beneficial interest in it would have had to be shared with Paul Chalmers. By raising the action after the divorce Mrs Chalmers hopes to recover the property for herself. She can then hope to rely on the renunciation of rights in the minute of agreement to ward off any challenge from Paul Chalmers.

Chris Chalmers and 38 Hotspur Street

E

F

G

4815.indd 308

[57] Chris Chalmers said that since he had become the owner the flat was rented out. He had not received any income. He thought it was going with all the other properties ie, Rentier Property. He occasionally saw documentation relating to Hotspur Street; invoices relating to the period 201113 were addressed to him at his work at D J Alexander. He did not pay these accounts.

[58] Chris Chalmers did not know if there was rental income from the property in 2006 or 2007. He did know that there was rent in 2008. He did not know if Rentier Property was deriving rental from it. He did not collect the rent. He did not know if his father collected rent. He made no inquiries as to where the rent was going. He had not received anything for the property. He was not aware if any tax had been paid in respect of income from the property; he had not paid any tax on it. He later accepted that the rent on the property was paid to an account at D J Alexander. He said that he did not know who owned the account.

[59] I am satisfied that Chris Chalmers was not being truthful when he told the court that he did not know where rental income was being paid.

[60] Paul Chalmers accepted that until very recently he had been in receipt of the rental from the property. His explanation for this was that in 2011 he had a substantial bank overdraft of ÂŁ300,000 and had breached a covenant.

He needed the income from the property to keep afloat.

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Chalmers v Chalmers (OH)

309 A

Submissions for pursuer

[61] Mr Tariq, for the pursuer, submitted that it was accepted that the signature on the disposition was a forgery. Accordingly it was a nullity. No rights in land could pass on the basis of such a document. If the court did not reduce the disposition it would be endorsing a fraud and set a dangerous precedent. It was accordingly surprising that the court was being asked not to reduce the disposition on some equitable basis. The defender was not a partner in Rentier Property. Moreover he had some involvement in the fraudulent transaction; his evidence that he did not know what he was signing when he signed the stamp duty forms was, Mr Tariq submitted, utterly unconvincing. The defender was sitting on a windfall to which he was not entitled. Mr Tariq had put to the defender in cross-examination that the defences were in fact about his father and prejudice to him and not to the defender. Mr Tariq submitted that in his answers the defender appeared to accept that these defences were irrelevant. The evidence did not support the conclusion that the property was held in trust for Rentier Property. Even if the title was held in trust it was irrelevant since Rentier Property was not a party to the action. So far as prejudice to Paul Chalmers was concerned again he was not a party to the action. In any event he had chosen not to deal with Hotspur Street in the minute of agreement. It would be inconceivable not to reduce the disposition on the basis of prejudice to Paul Chalmers.

[62] Mr Tariq also submitted that there was no record for some of the primary facts, including the purchase of 38 Hotspur Street with monies from the partnership. He had taken timeous objection to the leading of evidence but it had been allowed under reservation. The purser had been prejudiced in the presentation of the case. The conclusion had been pled; that the property was held in trust for Rentier Property but not the facts that supported that conclusion.

[63] Mr Tariq submitted that in any event the evidence did not support the conclusion that 38 Hotspur Street had been bought as part of the Rentier Property portfolio. He pointed to the lack of evidence to support such a conclusion and in particular to the lack of any mention of 38 Hotspur Street in the accounts.

[64] In answer to the submissions by Mr Logan Mr Tariq submitted that the evidence did not support the conclusion that the beneficial owner of 38 Hotspur Street was Rentier Property. He submitted that the beneficial owner was in fact, Paul Chalmers.

B

C

D

E

Submission for defender

[65] Mr Logan for the defender submitted that the pursuer had no title or interest. The evidence showed that property had been purchased with money from Rentier Property. Accordingly the presumption was that it belonged to Rentier Property; Partnership Act 1890, section 21. The fact that the title was in the name of one of the partners did not negate a finding that the beneficial ownership was with the partnership; Longmuir v Moffat, paras 15 and 16. If it was, as he submitted, purchased by Rentier Property then it followed that the pursuer’s only interest in the property was as a partner in the firm. However the pursuer had renounced any interest in the firm in the minute of agreement.

[66] The second issue was whether or not it was appropriate for the court to exercise its discretion and grant reduction of the title. This was a matter for the discretion of the court. He referred me to the decision of Lord Bracadale in William Dodd v Southern Pacific Personal Loans and in particular at paras 97 and 98. He did not contend that this was a case where the pursuer condoned

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the granting of a fraudulent disposition. She had however made an informed decision when she signed the minute of agreement and having done so she was personally barred from seeking reduction. In signing the minute of agreement she not only renounced her claim against the assets of Rentier Property but she also sought to gain an unfair advantage by reaching a settlement and then by taking steps to recover an asset which she and her lawyer accepted would otherwise have been part of the matrimonial property and dealt with in the settlement. He also referred me to Robertson’s Executrix v Robertson, a case dealing with decree in absence where Lord McCluskey, giving the decision of the Extra Division quoted with approval the Lord Justice Clerk in Hyslop v Flaherty at [p.854;] p.590 where he said, “There is no general rule in such a matter as this; each case must turn upon in its own circumstances.” Mr Logan submitted that the same principle applied in this case.

[67] Mr Logan set out the points that he relied upon in support of this submission: • when she signed the minute of agreement the pursuer was aware of the position in respect of Hotspur Street; • she could have raised proceedings to challenge the defender’s title at the point she was aware of the disposition but had deliberately refrained from doing so until the divorce was finalised; • the pursuer had candidly admitted that she hoped to gain a “bonus” by getting the whole of a property that was not taken into account at the time of the division of the matrimonial property; • Paul Chalmers was also aware of the circumstances of Hotspur Street and had looked for a global settlement.

D [68] The defender had obtained the property in good faith. He had spent money on it. He now lives in the house and it is his home. Whatever games the pursuer and her former husband had been playing in the divorce he would lose the property if decree was granted. I should exercise my discretion by refusing to grant decree.

Conclusions

E

F

[69] It is very difficult to tease out conclusions from this cobweb of conflicting evidence. It is made all the more difficult by the fact that none of the parties, including Paul Chalmers come to this with clean hands.

[70] Given the concession that the signature on the disposition was forged the pursuer is entitled to decree unless one of the defences advanced by the defender is met. I consider that the onus must be on the defender to make out the defence. There are two substantial defences encapsulated in the first two pleas-in-law. They are, first, that any interest that the pursuer had in the subjects was as a partner in the firm of Rentier Property. She had renounced any interest in the firm and thus has no title or interest to pursue the action. It should be dismissed. Secondly, having entered into the minute of agreement with Paul Chalmers the pursuer is personally barred from pursuing the action.

Is there a lack of record for the defender’s case?

G

4815.indd 310

[71] The defender in his pleadings avers that “It is believed and averred that the said subjects were in fact purchased by her former husband Paul Chalmers.

His reason for putting the title in the name of the pursuer is not known.” and then later, “She was aware, or ought to have been aware that she had in fact never been the owner of the subjects but had held it in trust for the partnership

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2015 S.C.L.R.

Chalmers v Chalmers (OH)

311

of Rentier Property.” The defender’s first plea-in-law is to the effect that any interest the pursuer had in the property was as a partner in Rentier Property and having renounced any interest in the firm she had no title or interest. The defender’s averments are answered by the pursuer over more than two pages.

These deal with whether the property showed in the accounts and the dealings between the parties in the divorce action relating to 38 Hotspur Street. It is true that there are no specific averments about the source of the funds to purchase 38 Hotspur Street. However I do not consider it necessary to plead the evidence supporting conclusions which are themselves sufficiently averred.

In this case it was clear from the pleadings and the plea-in-law that the issues of purchase and ownership of 38 Hotspur Street were central to the issues to be determined. Accordingly I conclude that the evidence of the source of funds for the purchase of 38 Hotspur Street is before me for consideration.

A

B

Was 38 Hotspur Street an asset of the firm of Rentier Property?

[72] Section 21of the Partnership Act 1890 is in the following terms: “Property bought with partnership money “Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm.”

This is an evidential provision. It establishes a presumption that property bought with money belonging to the firm is effectively an asset of the firm.

The headnote reinforces the point that it is to the source of the money that one has regard in determining whether or not the presumption should apply.

It is of course a rebuttable presumption. Equally if the section does not apply it does not mean that, on the evidence the property is not a partnership asset.

It will depend on the facts and what the evidence discloses.

[73] Suppose a man and wife own a taxi business. They purchase a new car.

If the purchase is made on the business account then the presumption in s.21 will apply and unless the contrary intention appears it will be deemed to have been purchased for the taxi business. But suppose the husband purchases the car on his own account. In that case the presumption does not apply; it could be for his own personal use and have nothing to do with the taxi business.

On the other hand it may be that the evidence shows that the car is in fact used for the taxi business. In that case the car will be deemed to be a partnership asset. The husband would have introduced the capital into the business.

[74] The funds for the purchase of Hotspur Street came from two sources.

The first was a loan secured over 167 Garioch Road from National Westminster Home Loans Ltd. The title to Garioch Road is in the name of Paul Chalmers but it was not disputed that this was part of the Rentier Property portfolio of property and an asset of the firm. Mr Tariq did not suggest that money borrowed against a partnership asset would not constitute “money belonging to the firm” for the purposes of s.21 of the Partnership Act. Accordingly I accept that s.21 applies to these funds.

[75] The second source of funds is Paul Chalmers himself. He said the money came from his savings and it was money he was bringing into the business. I can readily accept, since it was not challenged, that he was the source of the balance of the funds to purchase Hotspur Street. However it was not suggested that the funds went through the partnership accounts. The question is whether I can accept Paul Chalmers’ evidence that this was money that he was introducing into the business. Given my assessment of Paul Chalmers reliability and credibility I could only accept his evidence if I considered that there was evidence that was sufficiently convincing to support it.

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D

E

F

G

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B

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F

G

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2015 S.C.L.R.

[76] It is in fact artificial to look at the two sources of funds in isolation from each other. The real issue is whether or not, bearing in mind the presumption that applies to part of the funds, 38 Hotspur Street was a Rentier Property partnership asset.

[77] The evidence that supports Paul Chalmers’ evidence is as follows: • The greater part of the source of funds comes from a loan secured over property in the Rentier Property portfolio.

• The statement of cash intromissions produced by the solicitors Hennessy Bowie shows it to be “on behalf of Rentier Properties in connection with purchase of flat 1/1, 38 Hotspur Street, Glasgow”. The invoice from Hennessy Bowie was addressed to Rentier Properties though there is no evidence as to who paid the fee.

• Some other invoices were paid from Rentier Property account.

[78] There is however no evidence that 38 Hotspur Street was ever operated as part of the Rentier Property portfolio. The most obvious source of evidence would be the firm’s accounts. No accounts have been produced for the years preceding 2006–07. The accounts which have been produced do not show Hotspur Street as being one of the assets of the firm. Indeed it is not until 2013 that the rental income is shown in the accounts. Ms Moore said that she had not heard of Hotspur Street until very recently. She had been the accountant for the firm since 2002. I accept her evidence that from at least 2002 the property at Hotspur Street did not form part of the Rentier Property portfolio. There is no evidence of any accounting to HMRC or otherwise in respect of income from Hotspur Street as part of Rentier Property. There is some evidence that some bills in respect of Hotspur Street were paid from Rentier Property accounts but these are minor and few in number. Paul Chalmers was unable to explain why the rental income was not shown in the accounts.

[79] Mr Logan submitted that after 2006 the property would not properly be shown in the accounts since by that stage it was owned by Chris Chalmers.

That however does not square with the evidence that Chris Chalmers never received any income from the property and that in 2013 it was shown in the accounts for Rentier Property. It is clear that the rental income was being paid to Paul Chalmers. That was the case since at least 2002.

[80] I consider the failure to show Hotspur Street in the accounts to be significant. Despite the presumption that must apply to the loan funds secured over Garioch Road I am not satisfied that 38 Hotspur Street ever formed part of the Rentier Property portfolio. The lack of accounts are a starting-point for that conclusion. I accept that there is a lack of direct evidence about the position between 1998 and 2002 when Anne Moore became the accountant.

But there are other pieces of evidence that support this conclusion. Paul Chalmers did not inform his wife and business partner that he was purchasing the property. He put the title to 38 Hotspur Street in Mrs Chalmers’ name without her knowledge or consent. He did not tell her or make her aware of 38 Hotspur Street.The forgery would not have been necessary if Mrs Chalmers knew of it.The flat was rented out between 2002 and 2006 when the disposition in favour of Chris Chalmers is supposed to have been signed. Rent from the property was not going to Rentier Property. The inference must be that the rental income was going to Paul Chalmers himself. After 2006 the rent continued to be paid to Paul Chalmers despite the fact that Chris Chalmers now owned it.

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Chalmers v Chalmers (OH)

313

If 38 Hotspur Street was not a Rentier Property asset whose was it?

A

[81] The evidence points to a conclusion that Paul Chalmers decided to purchase 38 Hotspur Street as a property which would not be part of the assets of the firm of Rentier Property and to distance the firm and himself from ownership of it. He used his wife’s name in order to achieve that end. It is perhaps speculative to determine why that was done but the failure to account for the rental income in the accounts to HMRC may suggest an answer.

[82] The rental income from Hotspur Street went to Paul Chalmers before and after the granting of the disposition in favour of Chris Chalmers in 2006.

That raises the issue as to whether or not the granting of the disposition was in fact in implement of an intention to convey the property to Chris Chalmers or part of a wider deception in which, as Mr Tariq submitted, Paul Chalmers remained the beneficial owner.

[83] In passing I should note that I was surprised at this submission. In the first place it seemed to me to run counter to the pursuer’s case at least as I first understood it. More importantly however Paul Chalmers was not convened as a defender which arguably he ought to have been if the pursuer’s case was that he was the beneficial owner.

B

C

Why was there a disposition to Chris Chalmers in 2006?

[84] There is no doubt that Chris Chalmers colluded in the rental income continuing to go to his father after he became the ostensible owner of the property. I am satisfied that neither of them told the court the full truth about this matter. It may be that part of the reason for the disposition in favour of his son was part of an effort to conceal the source of rental income. On the other hand I am not clear that there was never an intention that Chris Chalmers would not own the capital in the property. He is the owner, subject to these proceedings, of 38 Hotspur Street. It would be difficult for Paul Chalmers to assert a right in the property in the face of what is on the register. He would know that when the disposition was granted in 2006. I note too that he has recently purchased a property for Nicola [sic]. It is not unusual for parents to wish to make provision for their children sometimes by purchasing property for them. I accept that is apparently not the wish of the pursuer in this case.

Decision and reasons

[85] I have found as a fact that 38 Hotspur Street did not form part of the Rentier Property portfolio. It follows that Mrs Chalmers could not have held it in trust for the firm. Accordingly I will repel the defender’s first plea-in-law.

[86] I now turn to the defender’s alternative submission. I am prepared to accept that as a general proposition the decision on whether or not to grant a decree of reduction is a matter of discretion and will depend on the facts in each case. That does not mean however that the decision is one at large and wholly dependent on what might be seen as the equities in the case. In William Dodd v Southern Pacific Personal Loans the pursuer condoned the forgery and was shown to have benefitted from the proceeds. Mr Tariq submitted that if I refused to grant reduction the court would in effect be endorsing a fraud.

Although he did not cite the case some support for that approach comes in the speech of Lord Hatherley in Lockyer v Ferrymanat p.39 where he said, “It is well established . . . that nothing can protect the perpetration of a fraud”.

[87] However I am not persuaded that the matter is quite as simple. If it were the case that, with the pursuer’s knowledge and agreement, 38 Hotspur Street had been purchased and the title put in the pursuer’s name either to be

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2015 S.C.L.R.

held in trust for the firm or in her own right and, subsequently, her signature had been forged on the disposition in favour of her son then it is difficult to conceive of a defence to an action of reduction.

[88] That of course is not what happened. The pursuer did not know of the acquisition of the property. She did not know that it had been put in her name.

She accepted it was not intended as a gift to her. Putting to one side her interest in matrimonial property she had no interest in the property before her signature was forged and the disposition granted in favour of the defender.

The fraud that was perpetrated here was a wider one than simply the forging of a signature.The pursuer was used by Paul Chalmers as a means of concealing his interest in the property.

[89] The closest analogy that I can think of is of someone fraudulently using someone else’s bank account to conceal money transfers. If money was transferred into the account without the account holder knowing about it and was then transferred out again by that person forging the account holder’s signature the account holder would not ordinarily be entitled to the monies that had been in his account at the instance of the fraudster.

[90] If decree of reduction were to be granted then the pursuer would not be restored to the position she was in before her signature was forged. Since then she and her husband have divorced. Reduction of the disposition would restore the pursuer’s real right in the property. However had she had the real right at the time of the divorce it would have formed part of the matrimonial property and fall to have been dealt with at that time. Both the pursuer and her solicitor, Ms Jones, accepted that is what would have occurred. There was however a deliberate decision by the pursuer, advised by Ms Jones, to delay raising this action until after the divorce. I am satisfied that the reason for doing this was so that the pursuer could gain an advantage over her husband and not have to put 38 Hotspur Street into the pot of matrimonial property.

[91] When the pursuer signed the minute of agreement she was aware of the position with regard to Hotspur Street and the action that was open to her.

She decided however in the face of such knowledge to sign the minute of agreement and in so doing settle the division of matrimonial property between her and her husband.

[92] The defender on the other hand is not blameless. I have found that he colluded with his father at least insofar as the payment of rental income after 2006. On the other hand I am not satisfied that he participated in any fraud on his mother. I am satisfied that there was an intention on the part of Paul Chalmers that the property should ultimately go to his son, Chris. The defender is now in occupation of the property and it is his home.

[93] In all the circumstances, particularly having regard to the fact that it was never intended that the pursuer should have any beneficial interest in the property, that she delayed raising this action beyond the signing of the minute of agreement and that the defender did not participate in any fraud on the pursuer I have decided that I should sustain the defender’s second plea-in-law and refuse to grant decree of reduction. I shall repel the defender’s third and fourth pleas-in-law and repel the pursuer’s pleas-in-law. I shall reserve the question of expenses.

For the pursuer: Tariq, instructed by Harper Macleod LLP, Solicitors, Edinburgh.

For the defender: Logan, instructed by Gibson Kerr, Solicitors, Edinburgh.

G

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A SUPREME COURT

11 March 2015

Lord Neuberger (President), Lady Hale (Deputy President) Lord Kerr, Lord Clarke, Lord Wilson, Lord Reed and Lord Hodge NADINE MONTGOMERY

Appellant

against

B

LANARKSHIRE HEALTH BOARD

Respondent

Reparation—Professional negligence—Duty of care—Duty to give advice about treatment—Test to be applied The appellant raised an action for damages on behalf of her son for injuries which he sustained when he was born. She attributed the injuries to negligence on the part of the consultant obstetrician and gynaecologist employed by the board. Two distinct grounds of negligence where advanced. First, it was contended that she ought to have been given advice about the risk of shoulder dystocia which would be involved in vaginal birth, and of the alternative possibility of delivery by elective Caesarean section. Secondly, it was contended that the doctor had negligently failed to perform a Caesarean section in response to abnormalities indicated by cardiotocograph traces.

The Lord Ordinary rejected both grounds of fault on the basis of expert evidence of medical practice following the approach laid down by the authorities. He also concluded that even if the appellant had been given advice about the serious harm to her baby it would make no difference as she would not have elected to have had her baby delivered by Caesarean section. The decision was upheld by the Inner House. The appellant appealed to the Supreme Court focusing the appeal on the first ground of fault. She invited the court to depart from the decision of the House of Lords in Sidaway v Board of Governance of the Bethhem Royal Hospital and the Maudsley Hospital.

The court was also invited to reverse the findings of the Lord Ordinary in relation to causation, either on the basis that his treatment of the evidence was plainly wrong, or on the basis that, instead of applying a conventional test of ‘but for’ causation he should instead have applied the approach adopted in the case of Chester v Afshar.

The appellant suffered from diabetes and as a result her pregnancy was regarded as high risk. In particular there is a danger that the shoulders of a baby of a person who has diabetes may be the widest part of the body and create difficulty in passing through the mother’s pelvis. The difficulty can be resolved by what is known as “McRoberts” manoeuvre or a “Zavanelli” manoeuvre. The physical manoeuvres and manipulations required to free a baby can cause it to suffer a broken shoulder or an avulsion of the brachial plexus. The appellant’s child suffered Erb’s palsy as a result of the procedure.

The appellant was not told about the risks of her experiencing mechanical problems during labour or the risk of shoulder dystocia which was a high risk.

The doctor was of the opinion that the risk of the problem for the baby was very small but she felt that if a patient was told about it the patient would be inclined to ask for a Caesarean section when that was not necessary. In evidence the appellant said that if she had been told of the risk of shoulder dystocia she would have wanted the doctor to explain to her what it meant and what the possible risks of the outcomes could be and if she had considered that it was a significant risk she would have asked the doctor to perform a Caesarean section.

C

D

E

F

G

315

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316 A

B

C

D

E

F

G

4815.indd 316

Montgomery v Lanarkshire Health Board (UKSC) 2015 S.C.L.R.

Held (1) that the analysis of the law by the majority in Sidaway was unsatisfactory insofar as it had treated the doctor’s duty to have advised her patient of the risks of proposed treatment as falling within the scope of the Bolam test and the correct position in relation to the risks of injury involved in treatment could now be seen to have been substantially that adopted in Sidaway by Lord Scarman and the doctor was therefore under a duty to take reasonable care to ensure that the patient was aware of any material risks involved in any recommended treatment, and of any reasonable alternative variant treatments (paras 86, 87); (2) that the test of materiality was whether, in the circumstances of the particular case, a reasonable person in the patient’s position would have been likely to have attached significance to the risk, or the doctor was or should reasonably have been aware that particular patient would have been likely to have attached significance to it, but the doctor was entitled to withhold from the patient information as to a risk if he reasonably considered that its disclosure would have been seriously detrimental to the patient’s health and was also excused from conferring with the patient in circumstances of necessity (paras 87, 88); (3) that in the instant case there was no doubt that it had been incumbent on the doctor to advise the appellant of the risk of shoulder dystocia if she were to have had her baby by the vaginal delivery, and to have discussed with her the alternative of delivery by Caesarean section (para.94); and (4) that the only conclusion that could reasonably have been reached was that, had the doctor advised the appellant of the risk of shoulder dystocia and had discussed with her dispassionately the potential consequences, and the alternative of an elective Caesarean section, the appellant would probably have elected to be delivered of her baby by Caesarean section (para.104); and appeal allowed.

Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital [1985] A.C. 871; [1985] 2 W.L.R. 480; [1985] 1 All E.R. 643 disapproved.

Cases referred to: Airdale NHS Trust v Bland [1993] A.C. 789; [1993] 2 W.L.R. 316; [1993] 1 All E.R. 821 Birch v University College London Hospital NHS Foundation Trust [2008] EWHC 2237 (QB) Bolam v Friern Hospital Management Committee [1957] 1 W.L.R. 582; [1957] 2 All E.R. 118 Bolitho v City and Hackney Health Authority [1998] A.C. 232; [1997] 3 W.L.R. 1151; [1997] 4 All E.R. 771 Chester v Afshar [2004] UKHL 41; [2005] 1 A.C. 134; [2004] 3 W.L.R. 927; [2004] 4 All E.R. 587 Donoghue v Stevenson, 1932 S.L.T. 520 Glass v United Kingdom (2004) E.H.R.R. 341 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 H (Minors) v J & CM Smith (Whiteinch) Ltd (H.L.) 1990 S.C.L.R. 796; 1990 S.C. (H.L.) 63; 1990 S.L.T. 663 Hunter v Hanley, 1955 S.C. 200; 1955 S.L.T. 213 Jones v North West Strategic Health Authority [2010] EWHC 178 (QB); [2010] Med. L.R. 90 McColl v Strathclyde Regional Council, 1983 S.C. 225; 1983 S.L.T. 616 McGraddie v McGraddie [2013] UKSC 58; (S.C.) 2014 S.C.L.R. 109; 2014 S.C. (U.K.S.C.) 12; 2013 S.L.T. 1212 Maynard v West Midlands Regional Health Authority [1984] 1 W.L.R. 634; [1985] 1 All E.R. 635 Pearce v United Bristol Healthcare NHS Trust [1999] P.I.Q.R. P53

01/07/15 8:07 PM

2015 S.C.L.R. Montgomery v Lanarkshire Health Board (UKSC)

317

Rees v Darlington Memorial Hospital NHS Trust, [2003] UKHL 52; [2004] 1 A.C. 309; [2003] 3 W.L.R. 1091; [2003] 4 All E.R. 987 Reibl v Hughes, [1980] 2 S.C.R. 880 Rogers v Whitaker, (1992) 175 C.L.R. 179 Rosenberg v Percival, (2001) 2005 C.L.R. 434 S (An Infant) v S, [1972] A.C. 24; [1970] 3 W.L.R. 366; [1970] 3 All E.R. 107 St George’s Healthcare NHS Trust v S, [1999] Fam. 26 Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital, [1985] A.C. 871; [1985] 2 W.L.R. 480; [1985] 1 All E.R. 643 Thomas v Thomas, 1947 S.C. (H.L.) 45 Tysiac v Poland, [2007] ECHR 219; (2007) 45 E.H.R.R. 947 Wyatt v Curtis [2003] EWCA Civ 1779.

A

B

On 11 March 2015 the following opinions were issued. The full circumstances of the case can be found in the opinion issued by Lord Kerr and Lord Reed (with whom Lord Neuberger, Lord Clarke, Lord Wilson and Lord Hodge agreed.

C

LORD KERR AND LORD REED Introduction

1. Nadine Montgomery gave birth to a baby boy on 1 October 1999 at Bellshill Maternity Hospital, Lanarkshire. As a result of complications during the delivery, the baby was born with severe disabilities. In these proceedings Mrs Montgomery seeks damages on behalf of her son for the injuries which he sustained. She attributes those injuries to negligence on the part of Dr Dina McLellan, a consultant obstetrician and gynaecologist employed by Lanarkshire Health Board, who was responsible for Mrs Montgomery’s care during her pregnancy and labour. She also delivered the baby.

2. Before the Court of Session, two distinct grounds of negligence were advanced on behalf of Mrs Montgomery. The first concerned her antenatal care. It was contended that she ought to have been given advice about the risk of shoulder dystocia (the inability of the baby’s shoulders to pass through the pelvis) which would be involved in vaginal birth, and of the alternative possibility of delivery by elective caesarean section. The second branch of the case concerned the management of labour. It was contended that Dr McLellan had negligently failed to perform a caesarean section in response to abnormalities indicated by cardiotocograph (“CTG”) traces.

3. The Lord Ordinary, Lord Bannatyne, rejected both grounds of fault: [2010] CSOH 104. In relation to the first ground, he based his decision primarily on expert evidence of medical practice, following the approach laid down by the majority in Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital. He also concluded that, even if Mrs Montgomery had been given advice about the risk of serious harm to her baby as a consequence of shoulder dystocia, it would have made no difference in any event, since she would not have elected to have her baby delivered by caesarean section. That decision was upheld by the Inner House (Lord Eassie, Lord Hardie and Lord Emslie): [2013] CSIH 3; 2013 S.C. 245.

4. The appeal to this court has focused on the first ground of fault. The court has been invited to depart from the decision of the House of Lords in Sidaway and to re-consider the duty of a doctor towards a patient in relation to advice about treatment. The court has also been invited to reverse the findings of the Lord Ordinary in relation to causation, either on the basis that

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his treatment of the evidence was plainly wrong, or on the basis that, instead of applying a conventional test of “but for” causation, he should instead have applied the approach adopted in the case of Chester v Afshar.

5. Before considering those issues, we shall explain in greater detail the relevant facts and the approach adopted by the courts below.

The facts

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6. Mrs Montgomery studied molecular biology at Glasgow University and graduated with a BSc. She then worked for a pharmaceutical company as a hospital specialist. She was described by the Lord Ordinary as “a clearly highly intelligent person”. Her mother and sister are both general medical practitioners.

7. In 1999 Mrs Montgomery was expecting her first baby. She is of small stature, being just over five feet in height. She suffers from insulin dependent diabetes mellitus. Women suffering from diabetes are likely to have babies that are larger than normal, and there can be a particular concentration of weight on the babies’ shoulders. Because of her diabetes, Mrs Montgomery’s was regarded as a high-risk pregnancy requiring intensive monitoring. She therefore attended the combined obstetric and diabetic clinic at Bellshill Maternity Hospital, under the care of Dr McLellan, throughout her pregnancy.

8. The widest part of a baby’s body is usually the head. If the head successfully descends through the birth canal, in a normal birth the rest of the body will descend uneventfully. Since the widest part of the body of a baby whose mother is diabetic may be the shoulders the head may descend but the shoulders can be too wide to pass through the mother’s pelvis without medical intervention. This phenomenon, known as shoulder dystocia, is the prime concern in diabetic pregnancies which proceed to labour. It was described by Dr Philip Owen, an expert witness who gave evidence on behalf of the Board, as “a major obstetric emergency associated with a short and long term neonatal and maternal morbidity [and] an associated neonatal mortality”.

9. That evidence is consistent with guidance issued by the Royal College of Obstetricians and Gynaecologists, which states that there can be a high perinatal mortality and morbidity associated with the condition, even when it is managed appropriately. Maternal morbidity is also increased: in 11 per cent of cases of shoulder dystocia there is postpartum haemorrhage, and in 3.8 per cent fourth-degree perineal tears. The guidance advises that help should be summoned immediately when shoulder dystocia occurs. When the mother is in hospital this should include assistance from midwives, an obstetrician, a paediatric resuscitation team and an anaesthetist.

10. According to the evidence in this case, about 70 per cent of cases of shoulder dystocia can be resolved by what is known as a “McRoberts”’ manoeuvre. This involves two midwives or nurses taking hold of the mother’s legs and forcing her knees up towards her shoulders, so as to widen the pelvic inlet by means of hyperflexion. An attempt can also be made to manoeuvre the baby by suprapubic pressure. This procedure involves the doctor making a fist with both hands and applying pressure above the mother’s pubis, in order to dislodge the baby’s shoulder and push the baby down into the pelvis. Another procedure which may be attempted is a “Zavanelli” manoeuvre. This involves pushing the baby’s head back into the birth canal, to the uterus, so as to be able to perform an emergency caesarean section. Another possible procedure is a symphysiotomy. This is a surgical procedure which involves cutting through the pubic symphysis (the joint uniting the pubic bones), so as to allow the two halves of the pelvis to be separated.

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11. According to Dr McLellan’s evidence, in some cases the mother may be entirely unaware that shoulder dystocia has occurred. It is clear, however, that when shoulder dystocia happens and the mother knows of it, dealing with it is, at least, an unpleasant and frightening experience for her. It also gives rise to a variety of risks to her health.

12. Shoulder dystocia also presents risks to the baby. The physical manoeuvres and manipulations required to free the baby can cause it to suffer a broken shoulder or an avulsion of the brachial plexus—the nerve roots which connect the baby’s arm to the spinal cord. An injury of the latter type may be transient or it may, as in the present case, result in permanent disability, leaving the child with a useless arm. The risk of a brachial plexus injury, in cases of shoulder dystocia involving diabetic mothers, is about 0.2 per cent. In a very small percentage of cases of shoulder dystocia, the umbilical cord becomes trapped against the mother’s pelvis. If, in consequence, the cord becomes occluded, this can cause the baby to suffer from prolonged hypoxia, resulting in cerebral palsy or death. The risk of this happening is less than 0.1 per cent.

13. Mrs Montgomery was told that she was having a larger than usual baby.

But she was not told about the risks of her experiencing mechanical problems during labour. In particular she was not told about the risk of shoulder dystocia. It is agreed that that risk was 9–10 per cent in the case of diabetic mothers. Unsurprisingly, Dr McLellan accepted that this was a high risk. But, despite the risk, she said that her practice was not to spend a lot of time, or indeed any time at all, discussing potential risks of shoulder dystocia. She explained that this was because, in her estimation, the risk of a grave problem for the baby resulting from shoulder dystocia was very small. She considered, therefore, that if the condition was mentioned, “most women will actually say, ‘I’d rather have a caesarean section’ ”. She went on to say that: “if you were to mention shoulder dystocia to every [diabetic] patient, if you were to mention to any mother who faces labour that there is a very small risk of the baby dying in labour, then everyone would ask for a caesarean section, and it’s not in the maternal interests for women to have caesarean sections”.

14. During her fortnightly attendances at the clinic, Mrs Montgomery underwent ultrasound examinations to assess foetal size and growth. The final ultrasound examination was on 15 September 1999, at 36 weeks gestation. Dr McLellan decided that Mrs Montgomery should not have a further ultrasound examination at 38 weeks, because she felt that Mrs Montgomery was becoming anxious as a result of the information revealed by the scans about the size of her baby. That sense of anxiety related to her ability to deliver the baby vaginally.

15. Based on the 36-week ultrasound, Dr McLellan estimated that the foetal weight at birth would be 3.9 kilograms. She made that estimate on the assumption that the baby would be born at 38 weeks. This is important because Dr McLellan gave evidence that, if she had thought that the baby’s weight was likely to be greater than 4 kilograms, she would have offered Mrs Montgomery a caesarean section. In keeping with general practice Dr McLellan would customarily offer a caesarean section to diabetic mothers where the estimated birth weight is 4.5 kilograms. She decided to reduce that threshold to 4 kilograms in Mrs Montgomery’s case because of her small stature.

16. As Dr McLellan was aware, estimating birth weight by ultrasound has a margin of error of plus or minus 10 per cent. But she decided to leave this

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out of account, stating that “if you do that you would be sectioning virtually all diabetics”. By the time of the 36-week examination, Dr McLellan had already made arrangements for Mrs Montgomery’s labour to be induced at 38 weeks and five days. She accepted in evidence that she should have estimated the baby’s birth weight as at 38 weeks and five days, rather than 38 weeks, and that the estimated birth weight would then have been over 4 kilograms which was, of course, beyond the threshold that she herself had set. In the event, the baby was born on the planned date and weighed 4.25 kilograms.

17. At the 36-week appointment, Dr McLellan noted that Mrs Montgomery was “worried about [the] size of [the] baby”. In her evidence, she accepted that Mrs Montgomery had expressed concern at that appointment about the size of the foetus and about the risk that the baby might be too big to be delivered vaginally. Dr McLellan also accepted that it was possible that Mrs Montgomery had expressed similar concerns previously. Certainly, she said, such concerns had been mentioned more than once. She stated that Mrs Montgomery had not asked her “specifically about exact risks”. Had Mrs Montgomery done so, Dr McLellan said that she would have advised her about the risk of shoulder dystocia, and also about the risk of cephalopelvic disproportion (the baby’s head becoming stuck). In the absence of such specific questioning, Dr McLellan had not mentioned the risk of shoulder dystocia, because, as we have already observed, it was her view that the risk of serious injury to the baby was very slight. In accordance with her practice in cases where she felt (in her words) that it was “fair to allow somebody to deliver vaginally”, Dr McLellan advised Mrs Montgomery that she would be able to deliver vaginally, and that if difficulties were encountered during labour then recourse would be had to a caesarean section. Mrs Montgomery accepted that advice. But if she had requested an elective caesarean section, she would have been given one.

18. Mrs Montgomery said in evidence that if she had been told of the risk of shoulder dystocia, she would have wanted Dr McLellan to explain to her what it meant and what the possible risks of the outcomes could be. If she had considered that it was a significant risk to her (and, in light of what she had subsequently learned, she would have assessed it as such) she would have asked the doctor to perform a caesarean section.

19. As we have explained, Dr McLellan gave evidence that diabetic patients who had been advised of the risk of shoulder dystocia would invariably choose the alternative of delivery by caesarean section. She also gave evidence that Mrs Montgomery in particular would have made such an election: “since I felt the risk of her baby having a significant enough shoulder dystocia to cause even a nerve palsy or severe hypoxic damage to the baby was low I didn’t raise it with her, and had I raised it with her then yes, she would have no doubt requested a caesarean section, as would any diabetic today.”

20. Mrs Montgomery’s labour was induced by the administration of hormones, as Dr McLellan had planned. After several hours, labour became arrested.

The strength of the contractions was then augmented by the administration of further hormones over a further period of several hours, so as to overcome whatever was delaying progress towards vaginal delivery. When the baby’s head nevertheless failed to descend naturally, Dr McLellan used forceps. At 5.45 pm the baby’s shoulder became impacted at a point when half of his head was outside the perineum.

21. Dr McLellan had never dealt with that situation before. She described it as very stressful for Mrs Montgomery and for all the staff in theatre, including

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herself. Mr Peter Stewart, an expert witness led in support of Mrs Montgomery’s case, described the situation as every obstetrician’s nightmare. An anaesthetist gave Mrs Montgomery a general anaesthetic so as to enable the Zavanelli manoeuvre (ie, pushing the baby back into the uterus, in order to perform an emergency caesarean section) to be attempted. Dr McLellan decided however that she had no other option but to try to complete the delivery. She pulled the baby’s head with “significant traction” to complete the delivery of the head. In order to release the shoulders, she attempted to perform a symphysiotomy, and succeeded to some extent in cutting through the joint. No scalpels with fixed blades were available, however, and the blades she used became detached before the division of the joint had been completed. Eventually, “with just a huge adrenalin surge”, Dr McLellan succeeded in pulling the baby free, and delivery was achieved at 5.57 pm.

22. During the 12 minutes between the baby’s head appearing and the delivery, the umbilical cord was completely or partially occluded, depriving him of oxygen. After his birth, he was diagnosed as suffering from cerebral palsy of a dyskinetic type, which had been caused by the deprivation of oxygen.

He also suffered a brachial plexus injury resulting in Erb’s palsy (ie, paralysis of the arm). All four of his limbs are affected by the cerebral palsy. If Mrs Montgomery had had an elective caesarean section her son would have been born uninjured.

23. Mr Stewart gave evidence that Dr McLellan’s failure to inform Mrs Montgomery of the risk of shoulder dystocia was contrary to proper medical practice, whether or not Mrs Montgomery had asked about the risks associated with vaginal delivery. In cross-examination, however, counsel for the defender put the following question to him: “And if Dr McLellan had said your baby appears to be on the 95th centile or whatever, so it’s borderline large, it’s the top end of the normal size, its largish . . . We know that you are diabetic. We know you are whatever height you are, we’ve estimated the size as best we can all the way through, there are risks but I don’t think the baby is so big that vaginal delivery is beyond you and I think we should try for vaginal delivery and if anything comes up we will go to caesarean section. Now if that was the general tenor of the discussion, could you criticise that? I know it’s very vague and it’s very difficult because it’s another hypothesis, Mr Stewart and I appreciate that but yes I would . . . are you able to answer that question?”

24. Mr Stewart replied that he was “able to go along with that, with the caveat that you would then say to the patient, ‘Are you happy with that decision?’ ”.

Professor James Neilson, another expert witness led in support of Mrs Montgomery’s case, gave evidence that, if she expressed concerns about the size of her baby, then it was proper practice to discuss the potential problems that could arise because of the baby’s size. That discussion would have included the risk of shoulder dystocia, and the option of an elective caesarean section.

25. Dr Owen gave evidence that what had been said by Dr McLellan was an adequate response to Mrs Montgomery’s expressions of concern about the size of her baby and her ability to deliver vaginally. Another expert witness led on behalf of the Board, Dr Gerald Mason, considered that it was reasonable not to have discussed shoulder dystocia with Mrs Montgomery, as the risks of a serious outcome for the baby were so small. Like Dr McLellan, he considered that, if doctors were to warn women at risk of shoulder dystocia, “you would actually make most women simply request caesarean section”. He accepted however that if a patient asked about risks then the doctor was bound to respond.

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The judgments of the courts below

26. The Lord Ordinary was invited by counsel to accept that Mrs Montgomery should have been informed of the risk of shoulder dystocia if vaginal delivery was proposed and that she should have been advised about the alternative of delivery by caesarean section. He rejected that contention. Following the approach in Sidaway, he decided that whether a doctor’s omission to warn a patient of inherent risks of proposed treatment constituted a breach of the duty of care was normally to be determined by the application of the test in Hunter v Hanley, p.206 or the equivalent Bolam test (Bolam v Friern Hospital Management Committee, p.587). It therefore depended on whether the omission was accepted as proper by a responsible body of medical opinion. In light of the expert evidence given on behalf of the Board (and Dr Stewart’s evidence in cross-examination), which could not be rejected as incapable of standing up to rational analysis (cf, Bolitho v City and Hackney Health Authority, pp.241–243), that test was not met.

27. The Lord Ordinary accepted, following the speech of Lord Bridge in Sidaway, that there might be circumstances, where the proposed treatment involved a substantial risk of grave adverse consequences, in which a judge could conclude, notwithstanding any practice to the contrary, that a patient’s right to decide whether to consent to the treatment was so obvious that no prudent medical practitioner could fail to warn of the risk, save in an emergency or where there was some other cogent clinical reason for non-disclosure. The Lord Ordinary was referred to the way in which the matter had been put by Lord Woolf MR in Pearce v United Bristol Healthcare NHS Trust, para.21: was there a significant risk which would affect the judgement of a reasonable patient? That did not, in the Lord Ordinary’s judgment, alter the test in Sidaway because he considered that, in order to be significant, a risk must be a substantial risk of grave adverse consequences.

28. The circumstances of the present case did not in his view fall within the scope of that exception. Although there was a significant risk of shoulder dystocia, that did not in itself require a warning, since “in the vast majority of . . . cases . . . shoulder dystocia was dealt with by simple procedures and the chance of a severe injury to the baby was tiny”. The Lord Ordinary declined to follow the approach adopted in Jones v North West Strategic Health Authority, a case on similar facts where it had been held that the risk of shoulder dystocia was in itself sufficiently serious for the expectant mother to be entitled to be informed.

29. The Lord Ordinary also accepted, again following the speech of Lord Bridge in Sidaway, that a doctor must, when questioned specifically by a patient about risks involved in a particular treatment proposed, answer truthfully and as fully as the questioner requires. He held however that there had been no breach of that duty. He rejected Mrs Montgomery’s evidence that she had asked Dr McLellan about the risks inherent in vaginal delivery and about other options. He accepted that Mrs Montgomery had raised concerns with Dr McLellan about her ability to deliver such a large baby vaginally: indeed, that was not in dispute. But the expression of such concerns did not in his opinion result in any duty to explain the risks involved. In order for a duty to explain the risks to arise, Mrs Montgomery would have had to have “raised questions of specific risks” involved in vaginal delivery.

30. In her appeal to the Inner House of the Court of Session, Mrs Montgomery again argued that she ought to have been informed of the risk of shoulder dystocia, and should have been offered and advised about the alternative of delivery by caesarean section. The reclaiming motion was refused for reasons set out in an opinion delivered by Lord Eassie.

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31. Lord Eassie rejected the argument that there had been, in recent judicial authority (in particular, Pearce v United Bristol Healthcare NHS Trust), a departure from the approach adopted in Sidaway, so as to require a medical practitioner to inform the patient of any significant risk which would affect the judgement of a reasonable patient. The decision in Sidaway was understood

by Lord Eassie as normally requiring only of a doctor, in advising a patient of risks, to follow the practice of a responsible body of medical practitioners. He accepted, in the light of the opinion of Lord Bridge in Sidaway, and the later case of Bolitho v City and Hackney Health Authority, that there might be exceptional cases in which the court should not regard as determinative medical practice as to what should be conveyed to the patient where the risk was so obviously substantial that the court could say that no practitioner could reasonably omit to warn the patient. This was not such a case, however. The relevant risk was not the possibility of shoulder dystocia occurring but the much smaller risk of a grave adverse outcome.

32. The second limb of Mrs Montgomery’s case in relation to the advice that she should have received was founded, as we have explained, on the observation of Lord Bridge in Sidaway that when questioned specifically by a patient about risks, it is the doctor’s duty to answer truthfully and as fully as the questioner requires. The Lord Ordinary had rejected Mrs Montgomery’s evidence that she had repeatedly asked Dr McLellan about the risks of vaginal delivery. But it was argued on her behalf that her undisputed expression to her doctor of concerns about the size of her baby, and her ability to deliver the baby vaginally, was in substance a request for information about the risks involved in her delivering the baby vaginally, and was equally apt to trigger a duty to advise of the risks.

33.This argument was also rejected. Lord Eassie stated that, “communication of general anxieties or concerns, in a manner which does not clearly call for the full and honest disclosure of factual information in reply, falls short of qualifying under Lord Bridge’s observation”. Mrs Montgomery’s concerns had been of a general nature only. Unlike specific questioning, general concerns set no obvious parameters for a required response. “Too much in the way of information . . . may only serve to confuse or alarm the patient, and it is therefore very much a question for the experienced practitioner to decide, in accordance with normal and proper practice, where the line should be drawn in a given case”.

34. Since the Lord Ordinary and the Extra Division both found that Dr McLellan owed no duty to Mrs Montgomery to advise her of any risk associated with vaginal delivery, the question of how Mrs Montgomery might have reacted, if she had been advised of the risks, did not arise. Both the Lord Ordinary and the Extra Division nevertheless dealt with the matter. The relevant question, as they saw it, was whether Mrs Montgomery had established that, had she been advised of the very small risks of grave adverse consequences arising from shoulder dystocia, she would have chosen to have a caesarean section and thus avoided the injury to the baby.

35. The Lord Ordinary described the evidence in relation to this matter as being in fairly short compass, and said that, “it is as follows”. He then quoted the passage in Mrs Montgomery’s evidence which we have narrated at para.18.

Mrs Montgomery was not challenged on this evidence. Notwithstanding that, the Lord Ordinary did not accept her evidence. He considered that because: (1) the risk of a grave adverse outcome from shoulder dystocia was “minimal”; (2) the risks of an elective caesarean section would also have been explained to her; (3) Dr McLellan would have continued to advocate a vaginal delivery;

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and (4) Mrs Montgomery said in evidence that she was “not arrogant enough to demand a caesarean section” when it had not been offered to her, she would not have elected to have that procedure, even if she knew of the risks of shoulder dystocia.

36. Before the Extra Division, counsel pointed out that the Lord Ordinary had purported to narrate the entire evidence bearing on this issue, but had omitted any reference to the evidence given by Dr McLellan that had she raised the risk of shoulder dystocia with Mrs Montgomery, “then yes, she would have no doubt requested a caesarean section, as would any diabetic today”. Lord Eassie considered however that this evidence was given in the context of a discussion about “professional practice in the matter of advising of the risks of shoulder dystocia, rather than a focused consideration of the likely attitude and response of the pursuer as a particular individual”. The fact that the Lord Ordinary did not refer to this evidence did not, in Lord Eassie’s view, betoken a failure to take into account material and significant evidence.

As Lord Simonds had observed in Thomas v Thomas, p.61, an appellate court was “entitled and bound, unless there is compelling reason to the contrary, to assume that (the trial judge) has taken the whole of the evidence into his consideration”.

37. An alternative argument was advanced on behalf of Mrs Montgomery on the issue of causation. It was submitted that the response which the patient would have given to advice about risks, had she received it, should not be determinative. It was sufficient that a risk of grave adverse consequences, of which there was ex hypothesi a duty to advise, had in fact materialised. This submission was based on the House of Lords decision in Chester v Afshar. That was a case where the patient had undergone elective surgery which carried a small risk of cauda equina syndrome, about which she had not been advised.

She developed the condition. The judge at first instance found that, had the claimant been advised of the risk, as she ought to have been, she would have sought advice on alternatives and the operation would not have taken place when it did. She might have agreed to surgery at a future date, in which event the operation would have involved the same small risk of cauda equina syndrome. The House of Lords held by a majority that causation was established.

38. The Lord Ordinary declined to apply the approach adopted in Chester v Afshar, on the basis that the instant case was materially different on its facts.

Lord Eassie also distinguished Chester from the present case. The birth of a baby could not be deferred: one was “not in the area of truly elective surgery”.

Moreover, there was a specific, positive finding that Mrs Montgomery would not have elected to undergo a caesarean section if she had been warned about the risk of shoulder dystocia.

Sidaway [v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital]

39. In Maynard v West Midlands Regional Health Authority, p.638, the House of Lords approved the dictum of Lord President Clyde in Hunter v Hanley, p.205, that the true test for establishing negligence in diagnosis or treatment on the part of a doctor is whether she has been proved to be guilty of such failure as no doctor of ordinary skill would be guilty of if acting with ordinary care. Lord Scarman, in a speech with which the other members of the House agreed, stated: “A case which is based on an allegation that a fully considered decision of two consultants in the field of their special skill was negligent clearly presents certain difficulties of proof. It is not enough to show that there is

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a body of competent professional opinion which considers that theirs was a wrong decision, if there also exists a body of professional opinion, equally competent, which supports the decision as reasonable in the circumstances.

It is not enough to show that subsequent events show that the operation need never have been performed, if at the time the decision to operate was taken it was reasonable in the sense that a responsible body of medical opinion would have accepted it as proper.”

40. In that part of his speech, Lord Scarman followed the approach adopted in Bolam v Friern Hospital Management Committee, a case concerned with advice as well as with diagnosis and treatment, where McNair J directed the jury that a doctor was not guilty of negligence if she had acted in accordance with a practice accepted as proper by a responsible body of medical practitioners skilled in that particular art. The question whether the same approach should be applied (as it had been, in Bolam itself) in relation to a failure to advise a patient of risks involved in treatment was considered by the House of Lords in Sidaway which was, of course, decided in 1985, two years after the Maynard decision.

41. In Sidaway’s case this question was approached by the members of the House in different ways, but with a measure of overlap. At one end of the spectrum was Lord Diplock, who considered that any alleged breach of a doctor’s duty of care towards his patient, whether it related to diagnosis, treatment or advice, should be determined by applying the Bolam test: “The merit of the Bolam test is that the criterion of the duty of care owed by a doctor to his patient is whether he has acted in accordance with a practice accepted as proper by a body of responsible and skilled medical opinion. . . . To decide what risks the existence of which a patient should be voluntarily warned and the terms in which such warning, if any, should be given, having regard to the effect that the warning may have, is as much an exercise of professional skill and judgment as any other part of the doctor’s comprehensive duty of care to the individual patient, and expert medical evidence on this matter should be treated in just the same way. The Bolam test should be applied” (pp.893, 895).

42. Lord Diplock provided some reassurance to members of the judiciary: “But when it comes to warning about risks, the kind of training and experience that a judge will have undergone at the Bar makes it natural for him to say (correctly) it is my right to decide whether any particular thing is done to my body, and I want to be fully informed of any risks there may be involved of which I am not already aware from my general knowledge as a highly educated man of experience, so that I may form my own judgment as to whether to refuse the advised treatment or not.

“No doubt if the patient in fact manifested this attitude by means of questioning, the doctor would tell him whatever it was the patient wanted to know. . .” (p.895).

There was on the other hand no obligation to provide patients with unsolicited information about risks: “The only effect that mention of risks can have on the patient’s mind, if it has any at all, can be in the direction of deterring the patient from undergoing the treatment which in the expert opinion of the doctor it is in the patient’s interest to undergo” (p. 895).

43. At the other end of the spectrum was the speech of Lord Scarman, who took as his starting-point “the patient’s right to make his own decision, which

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may be seen as a basic human right protected by the common law” (p 882).

From that starting-point, he inferred: “If, therefore, the failure to warn a patient of the risks inherent in the operation which is recommended does constitute a failure to respect the patient’s right to make his own decision, I can see no reason in principle why, if the risk materialises and injury or damage is caused, the law should not recognise and enforce a right in the patient to compensation by way of damages” (pp.884–885).

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44. In other words, if (1) the patient suffers damage, (2) as a result of an undisclosed risk, (3) which would have been disclosed by a doctor exercising reasonable care to respect her patient’s right to decide whether to incur the risk, and (4) the patient would have avoided the injury if the risk had been disclosed, then the patient will in principle have a cause of action based on negligence.

45. Lord Scarman pointed out that the decision whether to consent to the treatment proposed did not depend solely on medical considerations: “The doctor’s concern is with health and the relief of pain. These are the medical objectives. But a patient may well have in mind circumstances, objectives, and values which he may reasonably not make known to the doctor but which may lead him to a different decision from that suggested by a purely medical opinion” (pp.885–886).

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46. This is an important point. The relative importance attached by patients to quality as against length of life, or to physical appearance or bodily integrity as against the relief of pain, will vary from one patient to another. Countless other examples could be given of the ways in which the views or circumstances of an individual patient may affect their attitude towards a proposed form of treatment and the reasonable alternatives. The doctor cannot form an objective, “medical” view of these matters, and is therefore not in a position to take the “right” decision as a matter of clinical judgment.

47. In Lord Scarman’s view, if one considered the scope of the doctor’s duty by beginning with the right of the patient to make her own decision whether she would or would not undergo the treatment proposed, it followed that the doctor was under a duty to inform the patient of the material risks inherent in the treatment. A risk was material, for these purposes, if a reasonably prudent patient in the situation of the patient would think it significant. The doctor could however avoid liability for injury resulting from the occurrence of an undisclosed risk if she could show that she reasonably believed that communication to the patient of the existence of the risk would be detrimental to the health (including the mental health) of her patient.

48. It followed from that approach that medical evidence would normally be required in order to establish the magnitude of a risk and the seriousness of the possible injury if it should occur. Medical evidence would also be necessary to assist the court to decide whether a doctor who withheld information because of a concern about its effect upon the patient’s health was justified in that assessment. The determination of the scope of the doctor’s duty, and the question whether she had acted in breach of her duty, were however ultimately legal rather than medical in character.

49. Lord Scarman summarised his conclusions as follows (pp.889–890): “To the extent that I have indicated I think that English law must recognise a duty of the doctor to warn his patient of risk inherent in the treatment which he is proposing: and especially so, if the treatment be surgery. The critical limitation is that the duty is confined to material risk.

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The test of materiality is whether in the circumstances of the particular case the court is satisfied that a reasonable person in the patient’s position would be likely to attach significance to the risk. Even if the risk be material, the doctor will not be liable if upon a reasonable assessment of his patient’s condition he takes the view that a warning would be detrimental to his patient’s health.”

50. Lord Bridge of Harwich, with whom Lord Keith of Kinkel agreed, accepted that a conscious adult patient of sound mind is entitled to decide for herself whether or not she will submit to a particular course of treatment proposed by the doctor. He recognised the logical force of the North American doctrine of informed consent, but regarded it as impractical in application. Like Lord Diplock, he emphasised patients’ lack of medical knowledge, their vulnerability to making irrational judgments, and the role of “clinical judgment” in assessing how best to communicate to the patient the significant factors necessary to enable the patient to make an informed decision (p.899).

51. Lord Bridge was also unwilling to accept without qualification the distinction drawn by the Supreme Court of Canada, in Reibl v Hughes, between cases where the question is whether the doctor treated the patient in accordance with acceptable professional standards and cases concerned with the patient’s right to know what risks are involved in undergoing treatment. In Lord Bridge’s view, “a decision what degree of disclosure of risks is best calculated to assist a particular patient to make a rational choice as to whether or not to undergo a particular treatment must primarily be a matter of clinical judgment” (p.900). It followed that the question whether non-disclosure of risks was a breach of the doctor’s duty of care was an issue “to be decided primarily on the basis of expert medical evidence, applying the Bolam test” (p.900; emphasis supplied).

52. Nevertheless, his Lordship qualified his adherence to the Bolam test in this context in a way which narrowed the gap between his position and that of Lord Scarman: “But even in a case where, as here, no expert witness in the relevant medical field condemns the non-disclosure as being in conflict with accepted and responsible medical practice, I am of opinion that the judge might in certain circumstances come to the conclusion that disclosure of a particular risk was so obviously necessary to an informed choice on the part of the patient that no reasonably prudent medical man would fail to make it. The kind of case I have in mind would be an operation involving a substantial risk of grave adverse consequences, as, for example, the 10 per cent risk of a stroke from the operation which was the subject of the Canadian case of Reibl v Hughes, 114 DLR (3d) 1. In such a case, in the absence of some cogent clinical reason why the patient should not be informed, a doctor, recognising and respecting his patient’s right of decision, could hardly fail to appreciate the necessity for an appropriate warning” (p.900).

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the passage quoted, that the standard is that of a doctor who recognises and respects his patient’s right of decision and is exercising reasonable care (ie, is “reasonably prudent”). Reading the passage as a whole, therefore, the question for the judge is whether disclosure of a risk was so obviously necessary to an informed choice on the part of the patient that no doctor who recognised and respected his patient’s right of decision and was exercising reasonable care would fail to make it. So understood, Lord Bridge might be thought to arrive at a position not far distant from that of Lord Scarman.

54. Lord Bridge also said (at p.898): “I should perhaps add at this point, although the issue does not strictly arise in this appeal, that, when questioned specifically by a patient of apparently sound mind about risks involved in a particular treatment proposed, the doctor’s duty must, in my opinion, be to answer both truthfully and as fully as the questioner requires.”

55. Lord Templeman implicitly rejected the Bolam test, and approached the issue on the basis of an orthodox common law analysis. He noted, like Lord Diplock and Lord Bridge, the imbalance between the knowledge and objectivity of the doctor and the ignorance and subjectivity of the patient, but accepted that it was the right of the patient to decide whether or not to submit to treatment recommended by the doctor, and even to make an unbalanced and irrational judgment (p.904). In contract, it followed from the patient’s right to decide whether to accept proposed treatment that “the doctor impliedly contracts to provide information which is adequate to enable the patient to reach a balanced judgment, subject always to the doctor’s own obligation to say and do nothing which the doctor is satisfied will be harmful to the patient” (p.904). The obligation of the doctor “to have regard to the best interests of the patient but at the same time to make available to the patient sufficient information to enable the patient to reach a balanced judgment” (pp.904– 905) also arose as a matter of a duty of care. Lord Templeman’s formulation of the doctor’s duty was, like Lord Scarman’s, not confined to the disclosure of risks: the discussion of “the possible methods of treatment” (p.904), and therefore of reasonable alternatives to the treatment recommended, is also necessary if the patient is to reach a balanced judgment.

56. Lord Templeman thus arrived, by a different route, at an outcome not very different from that of Lord Scarman. Although Lord Scarman drew on the language of human rights, his reasoning was in substance the same as Lord Templeman’s: the doctor’s duty of care followed from the patient’s right to decide whether to undergo the treatment recommended.

57. It would therefore be wrong to regard Sidaway as an unqualified endorsement of the application of the Bolam test to the giving of advice about treatment. Only Lord Diplock adopted that position. On his approach, the only situation, other than one covered by the Bolam test, in which a doctor would be under a duty to provide information to a patient would be in response to questioning by the patient.

58. The significance attached in Sidaway to a patient’s failure to question the doctor is however profoundly unsatisfactory. In the first place, as Sedley LJ commented in Wyatt v Curtis, there is something unreal about placing the onus of asking upon a patient who may not know that there is anything to ask about. It is indeed a reversal of logic: the more a patient knows about the risks she faces, the easier it is for her to ask specific questions about those risks, so as to impose on her doctor a duty to provide information; but it is those who lack such knowledge, and who are in consequence unable to pose such

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questions and instead express their anxiety in more general terms, who are in the greatest need of information. Ironically, the ignorance which such patients seek to have dispelled disqualifies them from obtaining the information they desire. Secondly, this approach leads to the drawing of excessively fine distinctions between questioning, on the one hand, and expressions of concern falling short of questioning, on the other hand: a problem illustrated by the present case. Thirdly, an approach which requires the patient to question the doctor disregards the social and psychological realities of the relationship between a patient and her doctor, whether in the time-pressured setting of a GP’s surgery, or in the setting of a hospital. Few patients do not feel intimidated or inhibited to some degree.

59. There is also a logical difficulty inherent in this exception to the Bolam test, as the High Court of Australia pointed out in Rogers v Whitaker, pp.486–487. Why should the patient’s asking a question make any difference in negligence, if medical opinion determines whether the duty of care requires that the risk should be disclosed? The patient’s desire for the information, even if made known to the doctor, does not alter medical opinion. The exception, in other words, is logically destructive of the supposed rule. Medical opinion might of course accept that the information should be disclosed in response to questioning, but there would then be no exception to the Bolam test.

60. Lord Bridge’s other qualification of the Bolam test achieves an uneasy compromise, describing the issue as one to be decided “primarily” by applying the Bolam test, but allowing the judge to decide “that disclosure of a particular risk was so obviously necessary to an informed choice on the part of the patient that no reasonably prudent medical man would fail to make it”, the reasonably prudent medical man being “a doctor, recognising and respecting his patient’s right of decision”.

61. Superficially, this resembles the qualification of the Bolam test subsequently stated by Lord Browne-Wilkinson in Bolitho v City and Hackney Health Authority, p.243: that notwithstanding the views of medical experts, the court may conclude that their opinion is incapable of withstanding logical analysis. Lord Browne-Wilkinson however expressly confined his observations to cases of diagnosis and treatment, as distinct from disclosure of risk. In cases of the former kind, the court is concerned with matters of medical skill and judgement, and does not usually find a doctor guilty of negligence if she has followed a practice accepted as proper by a responsible body of doctors skilled in the relevant field. That is however subject to Lord Browne-Wilkinson’s qualification where the court is satisfied that the professional practice in question does not meet a reasonable standard of care. In cases concerned with advice, on the other hand, the application of the Bolam test is predicated on the view that the advice to be given to the patient is an aspect of treatment, falling within the scope of clinical judgement. The “informed choice” qualification rests on a fundamentally different premise: it is predicated on the view that the patient is entitled to be told of risks where that is necessary for her to make an informed decision whether to incur them.

62. The inherent instability of Lord Bridge’s qualification of the Bolam test has been reflected in a tendency among some judges to construe it restrictively, as in the present case, by focusing on the particular words used by Lord Bridge when describing the kind of case he had in mind (“a substantial risk of grave adverse consequences”), and even on the particular example he gave (which involved a 10 per cent risk of a stroke), rather than on the principle which the example was intended to illustrate.

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The subsequent case law

63. In the present case, as in earlier cases, the Court of Session applied the Bolam test, subject to the qualifications derived from Lord Bridge’s speech. In England and Wales, on the other hand, although Sidaway’s case remains binding, lower courts have tacitly ceased to apply the Bolam test in relation to the advice given by doctors to their patients, and have effectively adopted the approach of Lord Scarman.

64. The case of Pearce v United Bristol Healthcare NHS Trust is particularly significant in this context. The case concerned an expectant mother whose baby had gone over term. Her consultant obstetrician took the view that the appropriate course was for her to have a normal delivery when nature took its course, rather than a caesarean section at an earlier date, and advised her accordingly. In the event, the baby died in utero. The question was whether the mother ought to have been warned of that risk. In a judgment with which Roch and Mummery LJJ agreed, Lord Woolf MR said (para.21): “In a case where it is being alleged that a plaintiff has been deprived of the opportunity to make a proper decision as to what course he or she should take in relation to treatment, it seems to me to be the law, as indicated in the cases to which I have just referred, that if there is a significant risk which would affect the judgment of a reasonable patient, then in the normal course it is the responsibility of a doctor to inform the patient of that significant risk, if the information is needed so that the patient can determine for him or herself as to what course he or she should adopt.”

65. In support of that approach, the Master of the Rolls referred in particular to the passage from Lord Bridge’s speech in Sidaway which we have quoted at para.52. In Lord Bridge’s formulation, as we have explained, the question for the judge was whether disclosure of a risk was so obviously necessary to an informed choice on the part of the patient that no doctor who recognised and respected his patient’s right of decision and was exercising reasonable care would fail to make it. In our view, the Master of the Rolls was correct to consider that “a significant risk which would affect the judgment of a reasonable patient” would meet that test. Lord Woolf’s approach is also consistent with that adopted in Sidaway by Lord Templeman (“information which is adequate to enable the patient to reach a balanced judgment”), as well as with the test favoured by Lord Scarman (“that a reasonable person in the patient’s position would be likely to attach significance to the risk”). It does not, on the other hand, have anything to do with the Bolam test.

66. The Extra Division correctly pointed out in the present case that Lord Woolf spoke of a “significant” risk, whereas Lord Bridge, when describing the kind of case he had in mind, had referred to a “substantial” risk. Insofar as “significant” and “substantial” have different shades of meaning, “significant” is the more apt adjective. Lord Bridge accepted that a risk had to be disclosed where it was “obviously necessary to an informed choice”; and the relevance of a risk to the patient’s decision does not depend solely upon its magnitude, or upon a medical assessment of its significance.

67. The point is illustrated by the case of Wyatt v Curtis, which concerned the risk of around 1 per cent that chickenpox during pregnancy might result in significant brain damage. The Court of Appeal applied the law as stated in Pearce, observing that it was no less binding on the court than Sidaway. Sedley LJ stated: “Lord Woolf’s formulation refines Lord Bridge’s test by recognising that what is substantial and what is grave are questions on which the doctor’s

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and the patient’s perception may differ, and in relation to which the doctor must therefore have regard to what may be the patient’s perception. To the doctor, a chance in a hundred that the patient’s chickenpox may produce an abnormality in the foetus may well be an insubstantial chance, and an abnormality may in any case not be grave. To the patient, a new risk which (as I read the judge’s appraisal of the expert evidence) doubles, or at least enhances, the background risk of a potentially catastrophic abnormality may well be both substantial and grave, or at least sufficiently real for her to want to make an informed decision about it” (para.16).

A

68. It is also relevant to note the judgments in Chester v Afshar. The case was concerned with causation, but it contains relevant observations in relation to the duty of a doctor to advise a patient of risks involved in proposed treatment.

Lord Bingham of Cornhill said that the doctor in question had been under a duty to warn the patient of a small (1–2 per cent) risk that the proposed operation might lead to a seriously adverse result. The rationale of the duty, he said, was “to enable adult patients of sound mind to make for themselves decisions intimately affecting their own lives and bodies” (para.5). Lord Steyn cited with approval para.21 of Lord Woolf MR’s judgment in Pearce. Lord Walker of Gestingthorpe referred to a duty to advise the patient, a warning of risks being an aspect of the advice (para.92). He also observed at para.92 that during the 20 years which had elapsed since Sidaway’s case, the importance of personal autonomy had been more and more widely recognised. He added at para.98 that, in making a decision which might have a profound effect on her health and well-being, a patient was entitled to information and advice about possible alternative or variant treatments.

69. In more recent case law the English courts have generally treated Lord Woolf MR’s statement in Pearce as the standard formulation of the duty to disclose information to patients, although some unease has on occasion been expressed about the difficulty of reconciling that approach with the speeches of Lord Diplock and Lord Bridge in Sidaway’s case (see, for example, Birch v University College London Hospital NHS Foundation Trust). Significantly, the guidance issued by the Department of Health and the General Medical Council has treated Chester v Afshar as the leading authority.

B

Comparative law

70. The court has been referred to case law from a number of other major common law jurisdictions. It is unnecessary to discuss it in detail. It is sufficient to note that the Supreme Court of Canada has adhered in its more recent case law to the approach adopted in Reibl v Hughes, and that its approach to the duty of care has been followed elsewhere, for example by the High Court of Australia in Rogers v Whitaker and subsequent cases.

71. The judgment of Mason CJ, Brennan, Dawson, Toohey and McHugh JJ in Rogers vWhitaker identifies the basic flaw involved in approaching all aspects of a doctor’s duty of care in the same way: “Whether a medical practitioner carries out a particular form of treatment in accordance with the appropriate standard of care is a question in the resolution of which responsible professional opinion will have an influential, often a decisive, role to play; whether the patient has been given all the relevant information to choose between undergoing and not undergoing the treatment is a question of a different order. Generally speaking, it is not a question the answer to which depends upon medical standards or practices. Except in those cases where there is a particular danger that the provision of all relevant information will harm an unusually nervous,

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disturbed or volatile patient, no special medical skill is involved in disclosing the information, including the risks attending the proposed treatment” (pp.489–490: original emphasis).

72. The High Court of Australia in Rogers also reformulated the test of the materiality of a risk so as to encompass the situation in which, as the doctor knows or ought to know, the actual patient would be likely to attach greater significance to a risk than the hypothetical reasonable patient might do: “a risk is material if, in the circumstances of the particular case, a reasonable person in the patient’s position, if warned of the risk, would be likely to attach significance to it or if the medical practitioner is or should reasonably be aware that the particular patient, if warned of the risk, would be likely to attach significance to it” (p.490).

73. That is undoubtedly right: the doctor’s duty of care takes its precise content from the needs, concerns and circumstances of the individual patient, to the extent that they are or ought to be known to the doctor. In Rogers v Whitaker itself, for example, the risk was of blindness in one eye; but the plaintiff was already blind in the other eye, giving the risk a greater significance than it would otherwise have had. In addition, she had asked anxiously about risks.

Expressions of concern by the patient, as well as specific questions, are plainly relevant. As Gummow J observed in Rosenberg v Percival, p.459, courts should not be too quick to discard the second limb (ie, the possibility that the medical practitioner was or ought reasonably to have been aware that the particular patient, if warned of the risk, would be likely to attach significance to it) merely because it emerges that the patient did not ask certain kinds of questions.

Conclusions on the duty of disclosure

74. The Hippocratic Corpus advises physicians to reveal nothing to the patient of her present or future condition, “for many patients through this cause have taken a turn for the worse” (Decorum, XVI). Around two millennia later, in Sidaway’s case Lord Templeman said that “the provision of too much information may prejudice the attainment of the objective of restoring the patient’s health” (p.904); and similar observations were made by Lord Diplock and Lord Bridge. On that view, if the optimisation of the patient’s health is treated as an overriding objective, then it is unsurprising that the disclosure of information to a patient should be regarded as an aspect of medical care, and that the extent to which disclosure is appropriate should therefore be treated as a matter of clinical judgement, the appropriate standards being set by the medical profession.

75. Since Sidaway, however, it has become increasingly clear that the paradigm of the doctor–patient relationship implicit in the speeches in that case has ceased to reflect the reality and complexity of the way in which healthcare services are provided, or the way in which the providers and recipients of such services view their relationship. One development, which is particularly significant in the present context, is that patients are now widely regarded as persons holding rights, rather than as the passive recipients of the care of the medical profession. They are also widely treated as consumers exercising choices: a viewpoint which has underpinned some of the developments in the provision of healthcare services. In addition, a wider range of healthcare professionals now provide treatment and advice of one kind or another to members of the public, either as individuals, or as members of a team drawn from different professional backgrounds (with the consequence that, although this judgment is concerned particularly with doctors, it is also

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relevant, mutatis mutandis, to other healthcare providers). The treatment which they can offer is now understood to depend not only upon their clinical judgement, but upon bureaucratic decisions as to such matters as resource allocation, cost-containment and hospital administration: decisions which are taken by non-medical professionals. Such decisions are generally understood within a framework of institutional rather than personal responsibilities, and are in principle susceptible to challenge under public law rather than, or in addition to, the law of delict or tort.

76. Other changes in society, and in the provision of healthcare services, should also be borne in mind. One which is particularly relevant in the present context is that it has become far easier, and far more common, for members of the public to obtain information about symptoms, investigations, treatment options, risks and side-effects via such media as the internet (where, although the information available is of variable quality, reliable sources of information can readily be found), patient support groups, and leaflets issued by healthcare institutions. The labelling of pharmaceutical products and the provision of information sheets is a further example, which is of particular significance because it is required by laws premised on the ability of the citizen to comprehend the information provided. It would therefore be a mistake to view patients as uninformed, incapable of understanding medical matters, or wholly dependent upon a flow of information from doctors. The idea that patients were medically uninformed and incapable of understanding medical matters was always a questionable generalisation, as Lord Diplock implicitly acknowledged by making an exception for highly educated men of experience.

To make it the default assumption on which the law is to be based is now manifestly untenable.

77. These developments in society are reflected in professional practice.

The court has been referred in particular to the guidance given to doctors by the General Medical Council, who participated as interveners in the present appeal. One of the documents currently in force (Good Medical Practice (2013)) states, under the heading “The duties of a doctor registered with the General Medical Council”: “Work in partnership with patients. Listen to, and respond to, their concerns and preferences. Give patients the information they want or need in a way they can understand. Respect patients’ right to reach decisions with you about their treatment and care.”

78. Another current document (Consent: patients and doctors making decisions together (2008)) describes a basic model of partnership between doctor and patient: “The doctor explains the options to the patient, setting out the potential benefits, risks, burdens and side effects of each option, including the option to have no treatment. The doctor may recommend a particular option which they believe to be best for the patient, but they must not put pressure on the patient to accept their advice. The patient weighs up the potential benefits, risks and burdens of the various options as well as any non-clinical issues that are relevant to them. The patient decides whether to accept any of the options and, if so, which one” (para.5).

In relation to risks, in particular, the document advises that the doctor must tell patients if treatment might result in a serious adverse outcome, even if the risk is very small, and should also tell patients about less serious complications if they occur frequently (para.32). The submissions on behalf of the General Medical Council acknowledged, in relation to these documents, that an

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approach based upon the informed involvement of patients in their treatment, rather than their being passive and potentially reluctant recipients, can have therapeutic benefits, and is regarded as an integral aspect of professionalism in treatment.

79. Earlier editions of these documents (Good Medical Practice (1998), and Seeking patients’ consent: The ethical considerations (1998)), in force at the time of the events with which this case is concerned, were broadly to similar effect. No reference was made to them however in the proceedings before the Court of Session.

80. In addition to these developments in society and in medical practice, there have also been developments in the law. Under the stimulus of the Human Rights Act 1998, the courts have become increasingly conscious of the extent to which the common law reflects fundamental values. As Lord Scarman pointed out in Sidaway’s case, these include the value of selfdetermination (see, for example, S (An Infant) v S, p.43 per Lord Reid; McColl v Strathclyde Regional Council, p.241; Airedale NHS Trust v Bland, p.864 per Lord Goff of Chieveley). As well as underlying aspects of the common law, that value also underlies the right to respect for private life protected by art.8 of the European Convention on Human Rights. The resulting duty to involve the patient in decisions relating to her treatment has been recognised in judgments of the European Court of Human Rights, such as Glass v United Kingdom and Tysiac v Poland, as well as in a number of decisions of courts in the UK. The same value is also reflected more specifically in other international instruments: see, in particular, art.5 of the Convention for the Protection of Human Rights and Dignity of the Human Being with regard to the Application of Biology and Medicine: Convention on Human Rights and Biomedicine, concluded by the Member States of the Council of Europe, other states and the European Community at Oviedo on 4 April 1997.

81. The social and legal developments which we have mentioned point away from a model of the relationship between the doctor and the patient based upon medical paternalism. They also point away from a model based upon a view of the patient as being entirely dependent on information provided by the doctor. What they point towards is an approach to the law which, instead of treating patients as placing themselves in the hands of their doctors (and then being prone to sue their doctors in the event of a disappointing outcome), treats them so far as possible as adults who are capable of understanding that medical treatment is uncertain of success and may involve risks, accepting responsibility for the taking of risks affecting their own lives, and living with the consequences of their choices.

82. In the law of negligence, this approach entails a duty on the part of doctors to take reasonable care to ensure that a patient is aware of material risks of injury that are inherent in treatment. This can be understood, within the traditional framework of negligence, as a duty of care to avoid exposing a person to a risk of injury which she would otherwise have avoided, but it is also the counterpart of the patient’s entitlement to decide whether or not to incur that risk. The existence of that entitlement, and the fact that its exercise does not depend exclusively on medical considerations, are important. They point to a fundamental distinction between, on the one hand, the doctor’s role when considering possible investigatory or treatment options and, on the other, her role in discussing with the patient any recommended treatment and possible alternatives, and the risks of injury which may be involved.

83. The former role is an exercise of professional skill and judgment: what risks of injury are involved in an operation, for example, is a matter falling

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within the expertise of members of the medical profession. But it is a non sequitur to conclude that the question whether a risk of injury, or the availability of an alternative form of treatment, ought to be discussed with the patient is also a matter of purely professional judgment. The doctor’s advisory role cannot be regarded as solely an exercise of medical skill without leaving out of account the patient’s entitlement to decide on the risks to her health which she is willing to run (a decision which may be influenced by non-medical considerations). Responsibility for determining the nature and extent of a person’s rights rests with the courts, not with the medical professions.

84. Furthermore, because the extent to which a doctor may be inclined to discuss risks with a patient is not determined by medical learning or experience, the application of the Bolam test to this question is liable to result in the sanctioning of differences in practice which are attributable not to divergent schools of thought in medical science, but merely to divergent attitudes among doctors as to the degree of respect owed to their patients.

85. A person can of course decide that she does not wish to be informed of risks of injury (just as a person may choose to ignore the information leaflet enclosed with her medicine); and a doctor is not obliged to discuss the risks inherent in treatment with a person who makes it clear that she would prefer not to discuss the matter. Deciding whether a person is so disinclined may involve the doctor making a judgment; but it is not a judgment which is dependent on medical expertise. It is also true that the doctor must necessarily make a judgment as to how best to explain the risks to the patient, and that providing an effective explanation may require skill. But the skill and judgment required are not of the kind with which the Bolam test is concerned; and the need for that kind of skill and judgment does not entail that the question whether to explain the risks at all is normally a matter for the judgment of the doctor. That is not to say that the doctor is required to make disclosures to her patient if, in the reasonable exercise of medical judgment, she considers that it would be detrimental to the health of her patient to do so; but the “therapeutic exception”, as it has been called, cannot provide the basis of the general rule.

86. It follows that the analysis of the law by the majority in Sidaway is unsatisfactory, insofar as it treated the doctor’s duty to advise her patient of the risks of proposed treatment as falling within the scope of the Bolam test, subject to two qualifications of that general principle, neither of which is fundamentally consistent with that test. It is unsurprising that courts have found difficulty in the subsequent application of Sidaway, and that the courts in England and Wales have in reality departed from it; a position which was effectively endorsed, particularly by Lord Steyn, in Chester v Afshar. There is no reason to perpetuate the application of the Bolam test in this context any longer.

87. The correct position, in relation to the risks of injury involved in treatment, can now be seen to be substantially that adopted in Sidaway by Lord Scarman, and by Lord Woolf MR in Pearce, subject to the refinement made by the High Court of Australia in Rogers v Whitaker, which we have discussed at paras 7[1]–73. An adult person of sound mind is entitled to decide which, if any, of the available forms of treatment to undergo, and her consent must be obtained before treatment interfering with her bodily integrity is undertaken. The doctor is therefore under a duty to take reasonable care to ensure that the patient is aware of any material risks involved in any recommended treatment, and of any reasonable alternative or variant treatments. The test of materiality is whether, in the circumstances of the particular case, a reasonable person in the patient’s position would be likely to

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attach significance to the risk, or the doctor is or should reasonably be aware that the particular patient would be likely to attach significance to it.

88. The doctor is however entitled to withhold from the patient information as to a risk if he reasonably considers that its disclosure would be seriously detrimental to the patient’s health. The doctor is also excused from conferring with the patient in circumstances of necessity, as for example where the patient requires treatment urgently but is unconscious or otherwise unable to make a decision. It is unnecessary for the purposes of this case to consider in detail the scope of those exceptions.

89. Three further points should be made. First, it follows from this approach that the assessment of whether a risk is material cannot be reduced to percentages. The significance of a given risk is likely to reflect a variety of factors besides its magnitude: for example, the nature of the risk, the effect which its occurrence would have upon the life of the patient, the importance to the patient of the benefits sought to be achieved by the treatment, the alternatives available, and the risks involved in those alternatives.The assessment is therefore fact-sensitive, and sensitive also to the characteristics of the patient.

90. Secondly, the doctor’s advisory role involves dialogue, the aim of which is to ensure that the patient understands the seriousness of her condition, and the anticipated benefits and risks of the proposed treatment and any reasonable alternatives, so that she is then in a position to make an informed decision.

This role will only be performed effectively if the information provided is comprehensible. The doctor’s duty is not therefore fulfilled by bombarding the patient with technical information which she cannot reasonably be expected to grasp, let alone by routinely demanding her signature on a consent form.

91. Thirdly, it is important that the therapeutic exception should not be abused. It is a limited exception to the general principle that the patient should make the decision whether to undergo a proposed course of treatment: it is not intended to subvert that principle by enabling the doctor to prevent the patient from making an informed choice where she is liable to make a choice which the doctor considers to be contrary to her best interests.

92. There are, of course, arguments which can be advanced against this approach: for example, that some patients would rather trust their doctors than be informed of all the ways in which their treatment might go wrong; that it is impossible to discuss the risks associated with a medical procedure within the time typically available for a healthcare consultation; that the requirements imposed are liable to result in defensive practices and an increase in litigation; and that the outcome of such litigation may be less predictable.

93. The first of these points has been addressed in para.85 above. In relation to the second, the guidance issued by the General Medical Council has long required a broadly similar approach. It is nevertheless necessary to impose legal obligations, so that even those doctors who have less skill or inclination for communication, or who are more hurried, are obliged to pause and engage in the discussion which the law requires. This may not be welcomed by some healthcare providers; but the reasoning of the House of Lords in Donoghue v Stevenson was no doubt received in a similar way by the manufacturers of bottled drinks. The approach which we have described has long been operated in other jurisdictions, where healthcare practice presumably adjusted to its requirements. In relation to the third point, insofar as the law contributes to the incidence of litigation, an approach which results in patients being aware that the outcome of treatment is uncertain and potentially dangerous, and in their taking responsibility for the ultimate choice to undergo that treatment,

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may be less likely to encourage recriminations and litigation, in the event of an adverse outcome, than an approach which requires patients to rely on their doctors to determine whether a risk inherent in a particular form of treatment should be incurred. In relation to the fourth point, we would accept that a departure from the Bolam test will reduce the predictability of the outcome of litigation, given the difficulty of overcoming that test in contested proceedings.

It appears to us however that a degree of unpredictability can be tolerated as the consequence of protecting patients from exposure to risks of injury which they would otherwise have chosen to avoid. The more fundamental response to such points, however, is that respect for the dignity of patients requires no less.

A

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The disclosure of risks in the present case

94. Approaching the present case on this basis, there can be no doubt that it was incumbent on Dr McLellan to advise Mrs Montgomery of the risk of shoulder dystocia if she were to have her baby by vaginal delivery, and to discuss with her the alternative of delivery by caesarean section. The Court of Session focused upon the consequent risk that the baby might suffer a grave injury, a risk which was relatively small. The risk of shoulder dystocia, on the other hand, was substantial: on the evidence, around 9–10 per cent. Applying the approach which we have described, the exercise of reasonable care undoubtedly required that it should be disclosed. Quite apart from the risk of injury to the baby (a risk of about 1 in 500 of a brachial plexus injury, and a much smaller risk of a more severe injury, such as cerebral palsy, or death), it is apparent from the evidence (summarised at paras 8–12 and 21 above) that shoulder dystocia is itself a major obstetric emergency, requiring procedures which may be traumatic for the mother, and involving significant risks to her health. No woman would, for example, be likely to face the possibility of a fourth-degree tear, a Zavanelli manoeuvre or a symphysiotomy with equanimity. The contrast of the risk involved in an elective caesarean section, for the mother extremely small and for the baby virtually non-existent, is stark and illustrates clearly the need for Mrs Montgomery to be advised of the possibility, because of her particular circumstances, of shoulder dystocia.

This conclusion is reinforced by Dr McLellan’s own evidence (summarised at paras 13 and 19 above), that she was aware that the risk of shoulder dystocia was likely to affect the decision of a patient in Mrs Montgomery’s position, and that Mrs Montgomery herself was anxious about her ability to deliver the baby vaginally.

95. There is no question in this case of Dr McLellan’s being entitled to withhold information about the risk because its disclosure would be harmful to her patient’s health. Although her evidence indicates that it was her policy to withhold information about the risk of shoulder dystocia from her patients because they would otherwise request caesarean sections, the “therapeutic exception” is not intended to enable doctors to prevent their patients from taking an informed decision. Rather, it is the doctor’s responsibility to explain to her patient why she considers that one of the available treatment options is medically preferable to the others, having taken care to ensure that her patient is aware of the considerations for and against each of them.

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Causation

96. As we have explained, the Lord Ordinary found that, even if Mrs Montgomery had been informed of the risk of shoulder dystocia and had been told of the alternative of a caesarean section, she would not have elected to undergo that procedure. That finding was upheld by the Extra Division.

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97.This court has reiterated in a number of recent cases, including McGraddie v McGraddie and Henderson v Foxworth Investments Ltd, that appellate courts should exercise restraint in reversing findings of fact made at first instance. As was said in Henderson’s case at para.67: “in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified”.

It is in addition only in comparatively rare cases that this court interferes with concurrent findings of fact by lower courts. As Lord Jauncey of Tullichettle explained in H v J & C M Smith (Whiteinch) Ltd, p.82: “Where there are concurrent findings of fact in the courts below generally this House will interfere with those findings only where it can be shown that both courts were clearly wrong.”

98. As has been observed in the Australian case law, the issue of causation, where an undisclosed risk has materialised, is closely tied to the identification of the particular risk which ought to have been disclosed. In the present case, the Lord Ordinary focused on the risk of a severe injury to the baby, and said, in relation to causation: “I have already said that the real risk of grave consequences arising should shoulder dystocia occur were very small indeed. Given the very small risks the first question must be for the court: has the pursuer established on the basis of the ‘but for’ test, a link between the failure to advise her of said risks and damage to the child. Or to put the matter another way, has the pursuer established that had she been advised of the said risks she would have chosen a caesarean section and thus avoided the damage to the child?” (emphasis supplied).

99. As we have explained, the Lord Ordinary described the evidence in relation to that matter as being in short compass, and said that “it is as follows”. He then quoted the passage in Mrs Montgomery’s evidence which we have narrated at para.18. Having rejected that evidence as unreliable, he accordingly found that causation had not been established.

100. Like the Lord Ordinary, the Extra Division approached the question of causation on the basis that the relevant issue was, “what (Mrs Montgomery) would have done if advised of the risk of grave consequences arising should shoulder dystocia occur”, rather than what she would have done if advised of the risk of shoulder dystocia, and of the potential consequences of that complication. As we have explained, counsel pointed out that the Lord Ordinary had purported to narrate the entire evidence bearing on the issue, but had omitted any reference to the evidence given by Dr McLellan that had she raised the risk of shoulder dystocia with Mrs Montgomery, “then yes, she would have no doubt requested a caesarean section, as would any diabetic today” (para.19 above). The Extra Division observed that that evidence had been given in the context of a discussion about professional practice in relation to advising of the risks of shoulder dystocia, rather than a focused consideration of the likely attitude and response of Mrs Montgomery.

101. That particular piece of evidence did not however stand alone. It was consistent with the evidence given by Dr McLellan to the effect that diabetic

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women in general would request an elective caesarean section if made aware of the risk of shoulder dystocia (para.13 above). Her position was that it was precisely because most women would elect to have a caesarean section if informed of the risk of shoulder dystocia (contrary, in her view, to their best interests), that she withheld that information from them. That was also consistent with the evidence of the Board’s expert witness, Dr Gerald Mason, that if doctors were to warn women at risk of shoulder dystocia, “you would actually make most women simply request caesarean section” (para.25 above).

102. The Lord Ordinary’s failure to refer to any of this evidence does not in our view fall within the scope of Lord Simonds’s dictum in Thomas v Thomas, p.61, that an appellate court is “entitled and bound, unless there is compelling reason to the contrary, to assume that (the trial judge) has taken the whole of the evidence into his consideration”. That is an important observation, but it is subject to the qualification, “unless there is compelling reason to the contrary”.

In the present case, the Lord Ordinary not only failed to refer to any of this evidence, but also made the positive statement that “The evidence in relation to the (issue of causation) is in fairly short compass. It is as follows . . .” before quoting only the passage from the evidence of Mrs Montgomery. The apparent implication of that statement was that there was no other relevant evidence.

Those circumstances constitute a compelling reason for concluding that there was a failure by the Lord Ordinary to consider relevant evidence; a failure which also affected the decision of the Extra Division.

103. More fundamentally, however, the consequence of our holding that there was a duty to advise Mrs Montgomery of the risk of shoulder dystocia, and to discuss with her the potential implications and the options open to her, is that the issue of causation has to be considered on a different footing from that on which it was approached by the Lord Ordinary and the Extra Division. They had in mind the supposed reaction of Mrs Montgomery if she had been advised of the minimal risk of a grave consequence. The question should properly have been addressed as to Mrs Montgomery’s likely reaction if she had been told of the risk of shoulder dystocia. On that question, we have Dr McLellan’s unequivocal view that Mrs Montgomery would have elected to have a caesarean section. The question of causation must also be considered on the hypothesis of a discussion which is conducted without the patient’s being pressurised to accept her doctor’s recommendation. In these circumstances, there is really no basis on which to conclude that Mrs Montgomery, if she had been advised of the risk of shoulder dystocia, would have chosen to proceed with a vaginal delivery.

104. Approaching the issue of causation in that way, we have therefore concluded that the evidence points clearly in one direction. We have mentioned the passages in the evidence of Mrs Montgomery, Dr McLellan and Dr Mason in which the likely response of Mrs Montgomery, or of women in her position in general, if advised of the risk of shoulder dystocia, was discussed. We have also mentioned Dr McLellan’s evidence that Mrs Montgomery had been anxious about her ability to deliver the baby vaginally, and had expressed her concerns to Dr McLellan more than once. Although the Lord Ordinary expressed serious reservations about the extent to which Mrs Montgomery’s evidence had been affected by hindsight, he had no such misgivings about Dr McLellan: she was found to be “an impressive witness” in relation to the informed consent aspect of the case, and her evidence was “credible and reliable”. In the light of that assessment, and having regard to her evidence in particular, the only conclusion that we can reasonably reach is that, had she advised Mrs Montgomery of the risk of shoulder dystocia and discussed with her dispassionately the potential consequences, and the alternative of an

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elective caesarean section, Mrs Montgomery would probably have elected to be delivered of her baby by caesarean section. It is not in dispute that the baby would then have been born unharmed.

105. It is unnecessary in these circumstances to consider whether, if Mrs Montgomery could not establish “but for” causation, she might nevertheless establish causation on some other basis in the light of Chester v Afshar.

Conclusion

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106. For these reasons, we would allow the appeal.

LADY HALE 107. In the third (2010) edition of their leading work on Principles of Medical Law, Andrew Grubb, Judith Laing and Jean McHale confidently announced that a detailed analysis of the different speeches of the House of Lords in Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital was no longer necessary. A combination of the 2008 Guidance provided by the General Medical Council, the decision of the Court of Appeal in Pearce v United Bristol Healthcare NHS Trust and the decision of the House of Lords in Chester v Afshar meant that it could now be stated “with a reasonable degree of confidence” that the need for informed consent was firmly part of English law (para.8.70). This case has provided us with the opportunity, not only to confirm that confident statement, but also to make it clear that the same principles apply in Scotland.

108. It is now well recognised that the interest which the law of negligence protects is a person’s interest in their own physical and psychiatric integrity, an important feature of which is their autonomy, their freedom to decide what shall and shall not be done with their body (the unwanted pregnancy cases are an example: see Rees v Darlington Memorial Hospital NHS Trust). Thus, as Jonathan Herring puts it in Medical Law and Ethics (2012, 4th edn), p.170); “the issue is not whether enough information was given to ensure consent to the procedure, but whether there was enough information given so that the doctor was not acting negligently and giving due protection to the patient’s right of autonomy”.

109. An important consequence of this is that it is not possible to consider a particular medical procedure in isolation from its alternatives. Most decisions about medical care are not simple yes/no answers. There are choices to be made, arguments for and against each of the options to be considered, and sufficient information must be given so that this can be done: see the approach of the General Medical Council in Consent: patients and doctors making decisions together (2008), para.5, quoted by Lord Kerr and Lord Reed at para.77 and approved by them at paras 83–85.

110. Pregnancy is a particularly powerful illustration. Once a woman is pregnant, the foetus has somehow to be delivered. Leaving it inside her is not an option. The principal choice is between vaginal delivery and caesarean section. One is, of course, the normal and “natural” way of giving birth; the other used to be a way of saving the baby’s life at the expense of the mother’s.

Now, the risks to both mother and child from a caesarean section are so low that the National Institute for Health and Clinical Excellence (NICE clinical guideline 132 (new 2011), (para.1.2.9.5)) clearly states that: “For women requesting a CS, if after discussion and offer of support (including perinatal mental health support for women with anxiety about childbirth), a vaginal birth is still not an acceptable option, offer a planned CS.”

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111. That is not necessarily to say that the doctors have to volunteer the pros and cons of each option in every case, but they clearly should do so in any case where either the mother or the child is at heightened risk from a vaginal delivery. In this day and age, we are not only concerned about risks to the baby. We are equally, if not more, concerned about risks to the mother. And those include the risks associated with giving birth, as well as any after-effects.

One of the problems in this case was that for too long the focus was on the risks to the baby, without also taking into account what the mother might face in the process of giving birth.

112. It was well recognised in 1999 that an insulin-dependent diabetic mother could have a larger than average baby. This brings with it a 9–10 per cent risk of “mechanical problems” in labour, either that the baby’s head will fail to descend or, worse still, that it will descend but the baby’s shoulders will be too broad to follow the head through the birth canal and will therefore get stuck. Desperate manoeuvres are then required to deliver the baby. As the Royal College of Obstetricians and Gynaecologists state in their Guideline No 42 on Shoulder Dystocia (2005): “There can be a high perinatal mortality and morbidity associated with the condition, even when it is managed appropriately. Maternal morbidity is also increased, particularly postpartum haemorrhage (11 per cent) and fourth-degree perineal tears (3.8 per cent), and their incidence remains unchanged by the manoeuvres required to effect delivery.”

No one suggests that this was not equally well known in 1999. The risk of permanent injury to the baby is less than the risk of injury to the mother, but it includes a very small risk of catastrophic injury resulting from the deprivation of oxygen during delivery, as occurred in this case.

113. These are risks which any reasonable mother would wish to take into account in deciding whether to opt for a vaginal delivery or a caesarean section.

No doubt in doing so she would take serious account of her doctor’s estimation of the likelihood of these risks emerging in her case. But it is not difficult to understand why the medical evidence in this case was that, if offered a caesarean section, any insulin dependent pregnant woman would take it. What could be the benefits of vaginal delivery which would outweigh avoiding the risks to both mother and child?

114. We do not have a full transcript of the evidence, but in the extracts we do have Dr McLellan referred to explaining to a mother who requested a caesarean section “why it may not be in the mother’s best interest” and later expressed the view that “it’s not in the maternal interests for women to have caesarean sections”. Whatever Dr McLellan may have had in mind, this does not look like a purely medical judgment. It looks like a judgment that vaginal delivery is in some way morally preferable to a caesarean section: so much so that it justifies depriving the pregnant woman of the information needed for her to make a free choice in the matter. Giving birth vaginally is indeed a unique and wonderful experience, but it has not been suggested that it inevitably leads to a closer and better relationship between mother and child than does a caesarean section.

115. In any event, once the argument departs from purely medical considerations and involves value judgments of this sort, it becomes clear, as Lord Kerr and Lord Reed conclude at para.85, that the Bolam test, of conduct supported by a responsible body of medical opinion, becomes quite inapposite.

A patient is entitled to take into account her own values, her own assessment of the comparative merits of giving birth in the “natural” and traditional way

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and of giving birth by caesarean section, whatever medical opinion may say, alongside the medical evaluation of the risks to herself and her baby. She may place great value on giving birth in the natural way and be prepared to take the risks to herself and her baby which this entails. The medical profession must respect her choice, unless she lacks the legal capacity to decide (St George’s Healthcare NHS Trust v S). There is no good reason why the same should not apply in reverse, if she is prepared to forgo the joys of natural childbirth in order to avoid some not insignificant risks to herself or her baby. She cannot force her doctor to offer treatment which he or she considers futile or inappropriate. But she is at least entitled to the information which will enable her to take a proper part in that decision.

116. As NICE (2011) puts it, “Pregnant women should be offered evidencebased information and support to enable them to make informed decisions about their care and treatment” (para.1.1.1.1). Gone are the days when it was thought that, on becoming pregnant, a woman lost, not only her capacity, but also her right to act as a genuinely autonomous human being.

117. These additional observations, dealing with the specific example of pregnancy and childbirth, are merely a footnote to the comprehensive judgment of Lord Kerr and Lord Reed, with which I entirely agree. Were anyone to be able to detect a difference between us, I would instantly defer to their way of putting it. I would allow this appeal.

For the appellant: Badenoch QC, MacAulay QC, Sutherland, instructed by Balfour + Manson LLP, Solicitors, Edinburgh.

For the respondent: Anderson QC, Mackenzie, instructed by NHS National Services Scotland, Central Legal Office.

For the interveners (General Medical Council): Smith QC, instructed by GMC Legal.

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A Notes INNER HOUSE Lord Eassie, Lady Paton and Lord Bracadale ANTHONY PHEE v JAMES GORDON AND NIDDRY CASTLE GOLF CLUB

B

Expenses—Interest—Whether interest due on expenses—Whether exceptional circumstances exist In an action of reparation for personal injury the Lord Ordinary found both of the defenders liable to the pursuer and apportioned the liability of expenses and principal sum in the proportions of 70 per cent to the first defender and 30 per cent to the second defenders. He also awarded expenses. Both defenders reclaimed. The first defender challenged the apportionment of responsibility among the defenders and the Division upheld the first defender’s challenge to the apportionment of liability among the defenders to the extent that it reduced the liability of the first defender to 2 per cent. The pursuer sought expenses against both defenders in the Inner House only and asked the court to award interest at the official rate on the expenses. The motion was opposed in relation to the application for an award of interest. The pursuer sought interest for a period before the court, at either first instance or appellate level had made any finding as to expenses. Secondly in the case of the Inner House expenses the date from which interest was to run was explained as being the earliest date on which those acting for the pursuer could reasonably have enrolled a motion for expenses following the advising of the case in the Inner House although the pursuer did not in fact do so.

In holding that the pursuer’s motion for interest on expenses could not be seen as an entitlement to interest allowed by the common law relating to the payment of interest on principle sums and that the factors suggested by the pursuer did not come anywhere near the nature of exceptional circumstances and refusing the motion seeking interest on the expenses prior to the date of their decerniture for their payment the court issued the following opinion which was delivered by Lord Eassie on 3 June 2014.

LORD EASSIE [1] Following the hearing of a proof before answer in this action of reparation for personal injury, the Lord Ordinary advised the case on 4 November 2011.

He found both of the defenders liable to the pursuer and apportioned the liability of the defenders inter se in the proportions of 70 per cent to the first defender and 30 per cent to the second defenders. On 16 November 2011 he pronounced an interlocutor which, inter alia, decerned against the defenders jointly and severally for payment to the pursuer of an agreed sum of damages and which found the defenders liable to contribute to the principal sum interest and expenses in the proportions which we have just mentioned. He also pronounced two interlocutors decerning against the respective defenders for payment to the pursuer of the expenses as taxed by the Auditor of Court.

[2] Both defenders reclaimed. Put briefly, both challenged the Lord Ordinary’s findings that there had been negligence on their respective parts and that there had been no contributory negligence on the part of the pursuer; and the first defender challenged the apportionment of responsibility among

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the defenders inter se. In the event, the Extra Division which heard the reclaiming motion refused the reclaiming motion insofar as challenging the defenders’ joint and several liability to the pursuer and the absence of a finding of contributory negligence on the pursuer’s part. But the Division upheld the first defender’s challenge to the apportionment of liability among the defenders to the extent that it reduced the liability of the first defender to 20 per cent of the joint and several liability to the pursuer and increased that of the second defender to 80 per cent. The interlocutor pronounced on 14 March 2013 by the Division reads: “The Lords, having resumed consideration of the defenders’ respective motions for review of the Lord Ordinary’s interlocutor of 16 November 2011 . . . allow the first defender’s reclaiming motion to the extent of apportioning the agreed damages in the proportions of 20 per cent on the first defender and 80 per cent on the second defenders, and quoad ultra, refuse the reclaiming motions, adhere to the said interlocutor and continue the cause on the question of expenses.”

[3] Thereafter, and without any motion having been made in the Inner House for the expenses of the reclaiming motion, the second defenders initiated appeal proceedings in the Supreme Court of the UK which, we were told, were abandoned by the second defenders on 7 June 2013.

[4] Following that abandonment, motions for expenses were enrolled by the pursuer and the first defender. The pursuer sought expenses (seemingly against both defenders) in the Inner House only “in respect that expenses in relation to the Outer House Hearing (sic) were dealt with in (the Lord Ordinary’s) interlocutor of 16 December 2011 (sic)”. The motion enrolled by the pursuer then continued by asking the court “to award interest at the judicial rate on expenses from 16 November 2011 until payment”. Thereafter the motion sought judicial sanction for an additional fee to the pursuer’s solicitors in terms of Rule of Court 42.14. The first defender also enrolled a motion seeking expenses from the second defenders in relation to the proceedings both before the Outer House and the Inner House subsequent to the date of a judicial tender, lodged on 23 September 2011, respecting the defenders’ liabilities inter se as respects any award of damages and expenses which might be made to the pursuer.

[5] Those motions were opposed only to the extent that both defenders opposed the allowance of an additional fee under Rule 42.14; and, importantly for present purposes, the pursuer’s motion “insofar as it seeks an award of interest at the judicial rate on expenses from 16 November 2011 until payment”.

[6] The motions were considered by the court on 20 November 2013 when the court dealt with, and granted, (a) the motions for expenses so far as not opposed and (b) the opposed motion for an additional fee. However, because of the need to proceed with the substantive business set down for the summar roll on that date, the disputed branch of the pursuer’s motion seeking interest on expenses required to be deferred to a later date. On 20 November 2013 the court decerned against the first and second defenders jointly and severally for payment to the pursuers of the expenses for which the defenders had been found liable by the interlocutor of even date as the same shall be taxed by the Auditor of Court.

[7] We have now heard the discussion on the remaining branch of the pursuer’s motion for expenses, namely that concerned with the pursuer’s claim to interest on the taxed expenses. Counsel for the pursuer tendered a

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written note of submissions in which he refined the terms of that limb of the motion as enrolled as now being a motion for: “(1) an order for payment by the defenders to the pursuer of the expenses incurred in the Inner House with interest at 8 per cent per annum from March 18, 2013.

(2) an order for payment by the defenders to the pursuer of the expenses incurred in the Outer House together with interest at 8 per cent per annum from November 4, 2011.”

A

It may be noted that, as we have just set out, expenses as such have already been dealt with. The Lord Ordinary awarded the Outer House expenses to the pursuer in his interlocutor of 16 November 2011 and the Division which heard the reclaiming motion affirmed that aspect of the interlocutor. The Inner House expenses were awarded on 20 November 2013. (We also understand the principal sums of expenses recently to have been agreed and paid to the pursuer.) So we treat the refinement as confined solely to the question of the claim for interest, particularly the dates from which the interest sought should run.

[8] Two comments may be made respecting those dates. First, in both branches interest is sought for a period before the court, at either first instance or appellate level, had made any finding as to expenses, or any decerniture for payment.

Secondly, in the case of the Inner House expenses, the date of 18 March 2013 was explained by counsel for the pursuer as being the earliest date on which those acting for the pursuer could reasonably have enrolled a motion for expenses following the advising of the case in the Inner House on 14 March 2013.

However, it may be observed that those acting for the pursuer did not do so.

[9] With that introduction, we turn to the merits of the claim for interest on the expenses in question. Subject to a qualification to which we shall revert, it is the settled practice of this court, and also the sheriff courts, that interest is not allowed on awards of expenses prior to decerniture for their payment.

This, in our view, is consistent with the common law on liability for interest.

The locus classicus of that law is to be found in Carmichael v Caledonian Railway, (1870) 8 M. (H.L.) 119 per Lord Westbury at p.131, namely that, apart from contract, a party will only be liable to pay interest on money if the principal sum has been wrongfully withheld and not paid on the day when it ought to have been paid. The continuing governance of that rule or principle of common law was affirmed by the House of Lords in Wisely v John Fulton (Plumbers) Ltd, [(HL) 2000 S.C.L.R. 693;] 2000 S.C. (H.L.) 95 [; 2000 S.L.T. 494]—see in particular the speech of Lord Hope of Craighead at [p.695;] p.98.

[10] The common law rule that—apart from contract—it is necessary that the debt be wrongfully withheld embraces the important principle that, in the case of an illiquid or unascertained claim, such as a claim for damages (and thus also expenses of litigation), the party responsible for meeting the claim is entitled to have it ascertained and fixed by a judicial process. Only when the liability has thus been reduced to a precise figure, and decree for its payment pronounced, can payment be said to be wrongfully withheld. Accordingly at common law interest on such a claim runs only from the date of decree for payment of the ascertained liability. The decision in Dalmahoy & Wood v Magistrates of Brechin (1859) 21 D. 210, to which we were referred, is consistent with, and illustrative of, that approach.

[11] Those common law rules have the consequence that no interest is recoverable on losses, such as past loss of earnings, sustained in the period

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between the accrual of the cause of action and the ascertainment of the principal amount of those losses and the granting of decree for payment of the damages. Those consequences led to the intervention by the legislature in the form of the Interest on Damages (Scotland) Act 1958, subsequently amended by the Interest on Damages (Scotland) Act 1971. However, it is in our view clear that the legislature’s intervention on the common law is confined to giving the court a power to include in its interlocutor awarding damages a sum representing interest in respect of losses, for which damages are being awarded, suffered prior to decree. The intervention in the rules of the common law does not extend to giving statutory power to award interest on expenses incurred pendent lite.

[12] In these circumstances the first branch of the reformulated motion seeking interest on the Inner House expenses prior to the date of decerniture is not consonant with the applicable common law rules on liability for the payment of interest. We would add that until 1983, the practice of the court in awarding expenses was to remit the account of expenses, when lodged, to the Auditor of Court “to tax and report”. On receipt of the report the court then decerned for payment of the taxed amount, with interest on that amount from that date. Since 1983, the requirement of a report from the Auditor no longer applies and the court simply decerns for payment of the expenses as taxed. We understand the practice of the extractor, once expenses have been taxed, is to grant extract decree for the taxed amount with interest from the date of the auditor’s report.

[13] Adverting to the second branch of the revised motion which seeks interest on the Outer House expenses from 4 November 2011, it follows that at least as respects the very brief interval between 4 November 2011, when the case was advised by the Lord Ordinary, and the decerniture for expenses by the Lord Ordinary on 16 November 2011, what we have just said also applies.

In practical terms that interval is no doubt de minimis. However, in our view, this branch of the motion encounters another obstacle in the common law rules respecting wrongful withholding.

[14] Again consonantly with the underlying principle that an unascertained liability requires to be judicially ascertained before settlement of that liability may be said to have been wrongfully withheld, the common law rules also hold that such ascertainment is postponed until the final interlocutor in the case. The right of a party to appeal removes the concept of the withholding being wrongful.

That view of the law, expressed by the Lord President (Dunedin) in Roger v J & P Cochrane & Co 1910 S.C. 1, was affirmed by the House of Lords in McGovern v James Nimmo & Co Ltd 1938 S.C. (H.L.) 18 per Lord Atkin at p.29: “It seems to me perfectly clear, from the judgment of Lord President Dunedin in the case of Roger v J & P Cochrane & Co, which has been cited to us, that it is not the practice of the Court of Session, although they affirm the interlocutor, to award interest on the damages from the time at which the interlocutor was originally pronounced; and the reasons given are that the unsuccessful party has a right to appeal, and that the delay is what may be called a lawful delay and not one which would normally induce the Court to make the appellant, who objected to the judgment, the interest during the period of delay. That is what happens in the ordinary case, and for my part I see no reason why this House should not adopt the same the procedure in an ordinary case, nor why it should make a difference when there is a further appeal to the House of Lords. . . .”

Consequently, while, as respects their joint and several liability to the pursuer, the defenders’ exercise of their rights of appeal may have been unsuccessful,

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that does not render failure to pay the Outer House expenses for which payment was decreed by the Lord Ordinary on 16 November 2011 to be a wrongful withholding of payment of those expenses which gives rise to any liability to pay interest on those sums for the interval prior to the final interlocutor of the appellate court.

[15] Accordingly, we do not consider that the pursuer’s motion for interest on expenses can be seen as an entitlement to interest allowed by the common law relating to the payment of interest on principal sums.

[16] Whether in recognition of that position or not, the opening submission of counsel for the pursuer was to the effect that it had been recognised by the court that in exceptional circumstances it might award interest on expenses.

We were referred to the passage at p.505 in Maclaren on Expenses in the Supreme and Sheriff Courts of Scotland (1912). In that passage the author states that “it is now a settled rule of law that in ordinary circumstances interest can only be charged upon the expenses awarded in the case from the date of the final decree”. However, Maclaren goes on to note that “in exceptional circumstances interest has been allowed to run upon expenses prior to decree”. The decisions which Maclaren proceeds to mention largely date from the early 19th century. The basis of the early decisions is sometimes obscure. And the author observes that “in a more recent case”, namely Barclay v Barclay (1850) 22 Jur. 354, a distinction began to be drawn between outlays and professional fees. Those decisions in large measure predate the House of Lords formulation or distillation of the rules on liability for interest expressed in Carmichael v Caledonian Railway Co Ltd in terms of wrongful withholding.

That said, Maclaren summarised matters at p.507 of his work as being: “The foregoing review of the cases shows that the present rule of law is that interest on an account of judicial expenses will only be allowed from the date of decree therefor, except in very special circumstances, and that the latter will only be taken into consideration in dealing with charges for outlay and not with charges for professional work.”

Endorsement of that statement was indicated in the Outer House in Philips v Upper Clyde Shipbuilders, [(O.H.) 1990 S.C.L.R. 478;] 1990 S.L.T. 887 but the Lord Ordinary in that case rejected an attempt to innovate on the settled rules of the common law and the practice of the court.

[17] The basis upon which the pursuer seeks to bring his motion for interest within the scope of the exception envisaged in Maclaren’s conclusion is set out in para.20 of the written note of submissions which counsel helpfully tendered to the court. The factors listed are these: “(1) It (the present litigation0 was one of the few cases that is not settled and runs to proof.

(2) There are relatively large sums involved in terms of expenses.

(3) That the expectation in terms of paying interest has changed in the wake of the Damages (Scotland) Act 1958.

(4) That the agent funded the litigation, effectively making a loan to the client.

(5) The long period of time over which the litigation has continued.

(6) That time was extended by a reclaiming motion of a kind that generally has poor prospects of success.

(7) That the time was also extended by an appeal to the Supreme Court that was later abandoned.”

[18] In our opinion those factors do not come anywhere near the nature of exceptional circumstances of the kind illustrated by the cases to which

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Maclaren refers. The first factor is in our view plainly irrelevant. While the amount of the expenses is no doubt substantial, it cannot be described as extraordinary or unusual. Nor was it suggested that there was any unusual and substantial outlay which the pursuer required to fund. Indeed, notwithstanding Maclaren’s conclusion that the very special circumstances were focused on an outlay or outlays, the pursuer does not direct the claim to interest to any particular outlay, let alone an outlay attended with particular, exceptional circumstances. The third factor is not relevant for the reasons which we have already explained. As respects the remaining factors we make the following comments.

[19] First, while the reclaiming motion—insofar as directed to the defenders’ liability to the pursuer—was not successful, it cannot be described as frivolous or vexatious. Indeed, it was not suggested by counsel for the pursuer that it could be so described. Essentially, he contended that the reclaiming motion was “not attended by great prospects of success”. That is arguably an overpessimistic expression of those prospects. As [counsel], who appeared on behalf of both defending parties, pointed out, in para.43 in fine of its opinion the Division which heard the reclaiming motion observed: “As we have said, we are of the view that the Lord Ordinary was entitled to find fault on (the first defender’s) part. But we consider that some might judge his behaviour as not amounting to negligence when the players were at a distance at which most could be expected to respond appropriately and in a timely manner to a warning shout.”

Correspondingly, we do not consider that it could be said to be frivolous or vexatious to have initiated an appeal to the Supreme Court of the UK. But in any event, the lesser criterion of being in a class in which prospects of success on appeal are “generally poor”, plainly does not constitute an exceptional circumstance.

[20] Secondly, the motion seeks payment of interest to the pursuer, which postulates that the pursuer himself has been out of pocket in the total amount of the respective expenses since the respective dates from which the interest is sought. But, since we were told that the pursuer’s solicitors accepted instructions on a speculative, or “no win no fee”, basis which included the solicitors’ funding outlays, the pursuer is not out of pocket. We were not told whether counsel for the pursuer also acted on a speculative basis but in any event it is not said that the fees to counsel were paid as and when they were incurred. It is therefore not, in our view, correct to say that the solicitors made a loan to the client resulting in his incurring liability for interest. There was no contract of loan. Those acting for the pursuer chose to act speculatively on the basis that, if the pursuer were successful, they would obtain such expenses as were normally recoverable from the defending party. The decision of the pursuer’s solicitors to act on that basis cannot, in our view, constitute an exceptional circumstance justifying the imposition of an exceptional, additional liability on the defending party. But even if the pursuer had himself funded the action, in the absence of some highly exceptional circumstances respecting an outlay, for which a limited recovery of interest might be granted, he would yet be unable to recover interest.

[21] For all these reasons, we consider that the motion seeking interest on the expenses prior to the date of the decerniture for their payment must be refused.

[22] By way of a coda we would observe that, as the court noted at para.25 of its opinion in Farstad Supply AS v Enviroco [2013] CSIH 9; 2013 S.C. 302,

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comprehensive proposals for the reform of the law on payment of interest were put forward comparatively recently by the Scottish Law Commission.

They were the subject of a subsequent consultative bill. But, in the event, the Scottish Government resolved to take the reform proposals no further. The courts must continue to apply the existing law.

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A INNER HOUSE Lord Justice Clerk (Carloway), Lord Menzies and Lord Brodie SCOTTISH MINISTERS v RUSSELL STIRTON and ALEXANDER ANDERSON’S EXECUTOR B

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Expenses—Recovery order—Scale for expenses—Lengthy proof— Incompetent and unreasonable defence—Whether scale of expenses should be agent and client, client paying In an action concerning the civil recovery of the proceeds of unlawful conduct, notably money-laundering, extortion and mortgage fraud, in terms of s.266 of the Proceeds of Claim Act 2002 a recovery order was granted against the reclaimers. The order was granted following 130 days of proof between 2009 and 2011. The reclaimers appealed the award of expenses. Both claimed that the award which was made on the agent and client, client paying scale ought not to be made on that scale. The first reclaimer also argued that his liability ought to have been modified to nil standing his status as an assisted person.

The main evidence in the case before the Lord Ordinary came from a forensic accountant who gave evidence that the first reclaimer’s claim that he had been employed as motor mechanic with a company earning £14,000 per annum was not correct and there was no record of his employment.The Lord Ordinary concluded that property in Glasgow had been acquired with funds obtained by unlawful conduct. The respondents sought an award of expenses on the agent and client, client paying, scale and the Lord Ordinary granted the motion on the basis that the conduct of the defence was incompetent and unreasonable and that the reclaimers thereby cause unnecessary expense and she refused the motion for modification.

Counsel for the first reclaimer argued that it had not been appropriate to attribute the duration of proof wholly to the reclaimer. This had been the effect of the award of expenses on the agent and client, client paying scale. It had been entirely proper for them to put the respondents to their proof.

Counsel for the third reclaimer also argued that it had been unreasonable for the Lord Ordinary to award expenses on the agent and client, client paying scale, in respect of the whole process or even the whole proof. The conduct of the reclaimers and not been the cause of all of the delays at proof. Delays had been caused by ill health, bereavement, and the severe weather. The Lord Ordinary had erred in failing to attach significance to the respondents’ use of the public interest immunity certificates and the fact that the third reclaimer was a party litigant.

Counsel for the respondents argued that the court should be slow to interfere with a Lord Ordinary’s discretion in connection with expenses. In the absence of any failure to follow established principles, or manifest injustice, her decision regarding the appropriate scale of expenses should not be criticised.

In holding that whilst the court might not have reached the same conclusion as the Lord Ordinary the decision on the appropriate scale of expenses was one for the exercise of discretion and that there was no basis upon which to interfere with the Lord Ordinary’s discretion and rejecting the appeal the court issued the following opinion which was delivered by the Lord Justice Clerk on 7 October 2014.

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LORD JUSTICE CLERK

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Introduction

[1] These proceedings concern the civil recovery of the proceeds of unlawful conduct, notably money laundering, extortion and mortgage fraud, in terms of s.266 of the Proceeds of Crime Act 2002. On 14 February 2012, a recovery order was granted against the reclaimers. This included a property owned by the first reclaimer at 3 Kelvin Road, Milngavie. The order was granted following 130 days of proof, between 2009 and 2011, and an opinion of the Lord Ordinary extending to some 300 pages ([2012] CSOH 15). The Lord Ordinary dealt with expenses in a separate opinion ([2012] CSOH 166).

[2] The reclaiming motion was heard in two tranches. At a summar roll hearing on 2 July 2013, the reclaimers made submissions restricted to those grounds of appeal (grounds 1–5, 6(v) and 14 for the first reclaimer; grounds 1–6 for the third reclaimer) that could be advanced without recourse to any transcription of the evidence. The court having rejected those grounds ([2013] CSIH 81), the remaining grounds arose for consideration (para.35).

[3] At a by order hearing on 23 September 2014, the reclaimers abandoned certain of the remaining grounds (grounds 6(i)–(iv), 7–11 and 13 for the first reclaimer; grounds 7–15 for the third reclaimer). Accordingly, only ground 12 and “further” grounds 1 and 2 for the first reclaimer (now argued as “consolidated” grounds 1–3), and ground 16 for the third reclaimer, remained to be addressed. These were debated at a summar roll hearing which took place on 7 October 2014.

[4] The first reclaimer’s substantive ground (ground 12) was that there had been insufficient evidence to justify the conclusion that the property at 3 Kelvin Road had been acquired by unlawful conduct (consolidated ground 1).

The remaining grounds concerned expenses. Both reclaimers contended that the award of expenses in favour of the respondents ought not to have been made on the agent and client, client paying, scale (consolidated ground 2 for the first reclaimer; ground 16 for the third reclaimer). The first reclaimer argued, in addition, that his liability ought to have been modified to nil, standing his status as an assisted person (consolidated ground 3).

Proceedings before the Lord Ordinary

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3 Kelvin Road

[5] The recovery order was sought on the basis that the reclaimers had incurred expenditure, and acquired cash and assets, which could not be attributed to legitimate sources of income. The respondents averred that the first reclaimer’s property at 3 Kelvin Road, had been bought for £40,000 in December 1993.

The first reclaimer had obtained a loan of £36,000 from the Bradford & Bingley Building Society. The source of the balance of £4,000 was unknown.

In his loan application, the first reclaimer had declared a gross income of £14,000 from employment as an auto electrician. This was inconsistent with other accounts of the first reclaimer’s income and employment in 1993. The first reclaimer had no legitimate source of income at the relevant time. He had obtained the loan, and hence the property, by fraud. The first reclaimer answered that he had been employed by West Coast Auto Electrics. He denied the fraud.

[6] The Lord Ordinary heard evidence from a forensic accountant, Neill Thomson, who had analysed the reclaimers’ bank accounts and some of their business books. Mr Thomson spoke to his report, which contained an analysis

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of the source of funding of assets identified as recoverable. The narrative contained in Mr Thomson’s report in respect of 3 Kelvin Road was not disputed. Mr Thomson had had sight of the Bradford & Bingley mortgage file.

The first reclaimer had claimed to be employed as an auto electrician with West of Scotland (cf, West Coast, supra) Auto Electrics, Paisley, earning £14,000 per annum. However, there was no evidence that that business had existed. If it had, Mr Thomson would have expected to find annual tax returns.

There was no record of the first reclaimer’s employment amongst his personal tax records.

[7] Mr Thomson identified two further, and differing, accounts of the first reclaimer’s income and employment in 1993. First, there was an application for a Pearl Assurance endowment policy, which declared that he was a mechanic earning £16,000 per year. There was no vouching for this or any identification of the garage where he might have worked. Secondly, there was a Nationwide Building Society loan application in respect of another property, in Strathblane, which said that he was a self-employed builder earning an annual net profit of £51,479. However, in 2002, the first reclaimer had informed HM Revenue and Customs that he had not begun trading until 1996, and that he had not worked or claimed benefits previously. Mr Thomson concluded that the first reclaimer’s statement of earnings as a self-employed builder was likely to have been fabricated.

[8] The first reclaimer gave evidence that he had indeed been employed by West of Scotland Auto Electrics in 1993. His salary had been about £10,000 per annum at first, increasing to £14,000 plus overtime. The tax records were simply wrong. A Mr Giffin was adduced in support of the first reclaimer’s position. He said that he had worked with the first reclaimer at West of Scotland Auto Electrics in 1993. Mr Giffin had been a part-time bookkeeper.

Workers were paid a basic £10,000 plus overtime. By the time he had left, in February 1994, the basic wage had increased to about £14,000 per year.

[9] Mr Robert Thomson gave evidence. He had also worked with the first reclaimer in 1993. Mr Thomson’s net weekly wage, as an engineer, was usually between £230 and £250, including overtime. The first reclaimer might have been paid more.

[10] In 2002, Mr Macfie, an inspector of taxes, had dealt with a request, from the reclaimers’ accountant, to accept late tax returns on behalf of the first reclaimer. The accountant, namely a Mr Yousaf, did not give evidence. Mr Macfie received tax returns on behalf of the first reclaimer on a “lifestyle” basis for the periods 1996/7 and 2000/01. He had been prepared to agree that tax and penalties in the order of £100,000 would be paid. However, no information had been produced to vouch the income and employment declared in the first reclaimer’s loan applications.

[11] The third reclaimer gave evidence that the first reclaimer had worked as a mechanic in a garage in the west end of Glasgow. He had provided information to HMRC on his behalf, but the figures had been estimates and he could not explain them.

[12] The Lord Ordinary did not accept that the first reclaimer had been employed as an auto electrician at a salary of £14,000 per annum. She accepted that he had done some work for West of Scotland Auto Electrics, but she was not prepared to find that he had been employed at that or any other salary. She said that she had heard no credible evidence about the source of the £4,000 balance. Accordingly, she concluded that the property had been acquired with funds obtained by unlawful conduct.

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[13] The Lord Ordinary’s conclusions were based on her acceptance of the reasoning contained in the report of Mr Thomson. The first reclaimer had not suggested that any parts of Mr Thomson’s report were wrong, or that the report had omitted matters that ought to have been included. In any event, there were no positive averments of any alternative employment history. The Lord Ordinary noted the inconsistencies between the first reclaimer’s declared income and employment in his loan applications for 3 Kelvin Road and the Strathblane property. As he had not given notice of any legitimate alternative source of income, she found that the £4,000 deposit was unaccounted for.

[14] Because of the lack of any evidence of payments of income tax and national insurance, and his own varied claims as to his earnings, the Lord Ordinary found that the first reclaimer had made fraudulent claims to the lenders and obtained the loans by declaring income which he could not vouch.

In addition to the fraud in respect of 3 Kelvin Road, the Lord Ordinary found that the loans for the Strathblane property and another property in Milngavie had also been obtained by fraud.These findings were not ultimately challenged.

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Expenses

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[15] The respondents had sought an award of expenses on the agent and client, client paying, scale on the basis of the conduct of the proof. When the motion was finally heard, following a two-day adjournment because of lack of preparedness, the first reclaimer’s counsel said that “he was not able to make adequate or substantive replies to the submissions made (on behalf of the respondents). He had not had time to prepare.” He moved to have the first reclaimer’s expenses modified (Legal Aid (Scotland) Act 1986, s.18(2)) on the basis that the first reclaimer had no assets, relied on members of his family for support, and did not claim any benefits. “Counsel had nothing further to say.”

The third reclaimer accepted that expenses should follow success, but submitted that liability should be restricted to the first seven weeks of the proof, being the original estimate of time given by the respondents.

[16] The Lord Ordinary granted the respondents’ motion on the basis that “the conduct of the defence . . . was incompetent and unreasonable and that (the reclaimers) thereby caused (the respondents) unnecessary expense”. She refused the first reclaimer’s motion for modification “standing the findings about unlawful conduct involving (the first reclaimer) . . . and the view [she] took of the conduct of the proof”.

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Submissions The reclaimers 3 Kelvin Road

[17] The first reclaimer submitted that the Lord Ordinary had erred in rejecting the evidence of the first reclaimer’s earnings. She had erred in concluding that his declared income had been false. This had not been a case in which there was no evidence underpinning the income declared in the loan application (cf, Olupitan v The Assets Recovery Agency, [2008] Lloyd’s Rep. F.C. 253, Carnwath LJ at para.29). There had been evidence of the first reclaimer’s “connection” with West of Scotland Auto Electrics, and his probable earnings, in 1993. The two former employees, Mr Giffin and Mr Robert Thomson, had given evidence that “he was there”. The Lord Ordinary had not rejected their evidence. She had accepted that the first reclaimer had a connection with West of Scotland Auto Electrics, albeit in a

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capacity that remained uncertain. It was clear that the connection would have given rise to earnings. It was reasonable to infer that he had earned a modest level of income. There had been no evidence of the precise amount earned by the first reclaimer in 1993, but it went too far to require the first reclaimer to prove that the precise amount of his earnings had been £14,000. In doing so, the Lord Ordinary had effectively reversed the burden of proof.

[18] The evidence of Mr Neill Thomson had suggested that the figure declared in 1993 had been legitimate. Had the first reclaimer truly earned the larger sums declared elsewhere, which Mr Thomson had reasoned to have been a fabrication, there would have been no reason for him to declare a lower income in 1993. The Lord Ordinary had had a very uncertain foundation upon which to conclude that the loan secured over 3 Kelvin Road had been obtained by fraud. That conclusion had been “plainly wrong”.

[19] The Lord Ordinary had also erred in concluding that the £4,000 deposit had been derived from unlawful conduct. There had been no evidence of unlawful conduct until 1997, when the reclaimers were linked with the importation of controlled drugs and a handgun. The evidence, in connection with that conduct, had not provided an adequate basis for the Lord Ordinary to infer the earlier occurrence of further unlawful conduct. To a large extent, the proof had related to the reclaimers’ subsequent involvement with Spring Radio Cars, and allegations of extortion, from 2001. There had been no causal connection between that conduct and the £4,000 deposit (cf, Scottish Ministers v Doig, 2007 S.L.T. 313, Lord Drummond Young at para.42; Olupitan v The Assets Recovery Agency, Carnwath LJ at para.30).

[20] The third reclaimer had given evidence that he had thought the deposit was derived from the first reclaimer’s savings. In light of this, and the evidence of the first reclaimer’s earnings in 1993, the Lord Ordinary had not been entitled to infer that the source of the deposit had been unlawful. She had, once again, reversed the burden of proof.

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[21] The first reclaimer did not attempt to reconstruct the detail of the proceedings before the Lord Ordinary. The diet of proof had initially been fixed for seven weeks. The respondents’ case had lasted for a further 11 weeks, and that of the first reclaimer for another 16 days. The first reclaimer had pursued some lines of cross-examination that had been unproductive.

Additional days had been taken up with other matters. However, it had not been appropriate to attribute the duration of the proof wholly to the reclaimers.

This had been the effect of the award of expenses on the agent and client, client paying, scale.

[22] The reclaimers had denied the allegations of extortion, in respect of which a significant body of evidence had been led. The reclaimers had not failed to appreciate the significance of the evidence against them. It had been their position that extortion could not be made out, in the absence of averments of specific threats. It had been entirely proper for them to put the respondents to their proof.

[23] It was not possible to quantify the concerns expressed by the Lord Ordinary in justification of the scale of the award. On any view, the proof had been long and complicated. It was relevant to take account of the fact that the first reclaimer had answered a lengthy notice to admit and had entered into two joint minutes, one of which extended to some 22 pages. The award of party and party expenses, with the additional fee which was afforded to the respondents, would have been sufficient.

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[24] The third reclaimer added that it had been unreasonable for the Lord Ordinary to award expenses on the agent and client, client paying scale, in respect of the whole process, or even the whole of the proof (McKie v Scottish Ministers, 2006 S.C. 528, para.3). A precise calculation had not been undertaken, but the conduct of the reclaimers had not caused all of the delays at proof.

Delays had been caused by ill health, bereavement, and the severe weather of December 2010. In any event, the Lord Ordinary had relied on matters that had not taken up significant court time, had related to the third reclaimer’s legitimate defence, or had amounted to criticisms of the first reclaimer’s counsel.

The Lord Ordinary had erred in failing to attach significance to two matters: first, the respondents’ use of a public interest immunity certificate; and secondly, the third reclaimer’s status as a party litigant. The Lord Ordinary had failed to discriminate between the reclaimers, notwithstanding that she had identified distinct conduct in relation to each of them in support of the general award.

[25] The third reclaimer had been afforded no credit for dealing with the case as a party litigant. He had entered a joint minute, comprising 119 paragraphs of agreed facts over some 22 pages. He made at least 298 admissions in response to a notice to admit.These had been significant factors in restricting the length of the proof, which contradicted any suggestion that he had taken an unreasonable approach to the litigation.

[26] The Lord Ordinary had not attached any comparative value to the delays caused by the third reclaimer and those incurred overall. Where much of the delay had been attributable to other factors, the third reclaimer had effectively been held liable for expenses on an indemnity basis.

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[27] The first reclaimer added that the Lord Ordinary had observed correctly that an award against an assisted person should not exceed the amount that he could reasonably be required to pay (Legal Aid (Scotland) Act 1986, s.18(2)).

She had recognised that the parties’ means were relevant. However, she had failed to consider the first reclaimer’s ability to meet the award. Instead, her decision had been based on her view of the merits of the case and the first reclaimer’s conduct of it (cf, Bell v Inkersall Investments (No 2), 2007 S.C. 823, LJC (Gill) at p.831). Whilst conduct was relevant to the balance to be struck, the parties’ resources remained relevant (Armstrong v Armstrong, 1970 S.C. 161 at p.166). There had been no basis on which to conclude that the first reclaimer would be able to meet the award. The first reclaimer had had to satisfy the court as to his means, but there was no indication that the Lord Ordinary had taken his submissions into account. In the circumstances, the court was bound to remit the matter to the Lord Ordinary for reconsideration (Cullen v Cullen, [(I.H.) 2000 S.C.L.R. 491;] 2000 S.C. 396, LJC (Cullen) at paras 6–8).

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[28] The Lord Ordinary had adopted the correct approach to the evidence.

She had been entitled to make the findings in fact that she did. She had been entitled to draw common-sense inferences from the circumstantial evidence.

Her conclusions, based on such inferences, were as valid as those based on direct evidence.

[29] It would not have been appropriate to have “atomised” the evidence by applying a probabilistic test to each aspect of it. The evidence had to be

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taken as a whole in order to weigh the probabilities in the balance (Karanakaran v Secretary of State for the Home Department, [2000] 3 All E.R. 449 at p.477; Toremar v CGU Bonus, [2009] CSOH 78, Lord Brodie at para.85). It could not be said that the Lord Ordinary’s conclusions were “plainly wrong”, in the sense that no reasonable Lord Ordinary could have reached them (Thomas v Thomas, 1947 S.C. (H.L.) 45; Henderson v Foxworth Investments, [(S.C.) 2014 S.C.L.R. 692;] 2014 S.L.T. 775, Lord Reed at para.58).

[30] The Lord Ordinary had had the benefit of assessing the credibility and reliability of the first reclaimer. She had found him incredible. She had been discriminating and subtle in her analysis. She had been prepared to accept that the first reclaimer had worked in some capacity for West of Scotland Auto Electrics. She had done so notwithstanding that there had been no satisfactory evidence of the first reclaimer’s employment record. In particular, HMRC’s records had contained no reference to his employment in the relevant period.

The first reclaimer had tabled no averments as to the source of the £4,000 deposit. Thus, an objection had been sustained when the third reclaimer had sought to elicit positive evidence from him in this regard.

[31] The respondents had pointed to a number of inconsistencies in the nature of the first reclaimer’s earnings which had required explanation. In other words, the “tactical” burden of proof had shifted. The evidential burden had remained on the respondents to prove that 3 Kelvin Road had been acquired through unlawful conduct. However, the “tactical” burden could shift from time to time. The Lord Ordinary had been entitled to draw inferences adverse to the first reclaimer (Olupitan v The Assets Recovery Agency, Carnwath LJ at para.30; Scottish Ministers v Doig, Lord Drummond Young at para.42). The first reclaimer had been unable to provide any credible explanation for his activities or earnings in 1993. Thus, the Lord Ordinary did not accept that he had earned a legitimate income. That being so, she had been entitled to infer that 3 Kelvin Road had been acquired through unlawful conduct; the lion’s share of which had been the mortgage fraud of £36,000.

[32] In the context of the evidence as a whole, and in particular her finding of fraud in 1993, the Lord Ordinary had been entitled to infer that the £4,000 deposit had been derived from unlawful conduct. The Lord Ordinary had not relied on a single episode of unlawful conduct, in 1997, as the basis for her inference. There had been evidence to suggest that the first reclaimer had been involved in a life of crime, including concern in the supply of drugs and money laundering. In the absence of any record of the source of the £4,000 deposit, the Lord Ordinary had been entitled to infer that the deposit had come from unlawful conduct.

Expenses: scale

F

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[33] The court should be slow to interfere with a Lord Ordinary’s discretionary decision on expenses. The Lord Ordinary had had the benefit of hearing the proof. She had been “immersed in the atmosphere and nuances” of the case, which the appeal court could not begin to replicate or understand (Biogen v Medeva [1997] R.P.C. 1, Lord Hoffmann at p.45).

[34] The Lord Ordinary had founded on around 21 factors which she considered demonstrated conduct leading to unnecessary expense. It would have been impossible for her to embark upon a detailed apportionment of discrete expenses. The Lord Ordinary had, however, discriminated between the reclaimers. She had provided a comprehensive explanation of her findings in respect of the conduct of each reclaimer. Clearly she had been aware that the third reclaimer had represented himself. He had given no indication that

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he had been ill equipped to defend himself, however, until a late motion for an adjournment to apply for legal aid.

[35] In the absence of any failure to follow established principles, or of manifest injustice, the Lord Ordinary’s decision regarding the appropriate scale of expenses could not be criticised. She had properly directed herself on the relevant law (McKie v Scottish Ministers). She had taken account of all relevant factors and not taken account of any irrelevant factors. Her decision had been reasonable and there was nothing to suggest that the court should interfere with it.

A

B

Expenses: modification

[36] No credible or reliable information had been forthcoming in support of the first reclaimer’s motion for modification. Whilst he had claimed to have no assets, and to rely on the support of his family, the Lord Ordinary had found that both reclaimers had an ownership interest in Thomson’s Bar, Springburn.

[37] It was relevant to consider the nature of the dispute. The respondents had sought to recover the first reclaimer’s “ill-gotten gains”. The proof had demonstrated the first reclaimer’s history of declaring his income and its sources as it suited him from time to time. In the absence of a credible or vouched explanation of his means and resources, the public ought not to have to absorb the costs of him doing so.

[38] The Lord Ordinary had directed herself correctly on the critical parts of the motion (Bell v Inkersall Investments (No 2)). She had taken account of the whole circumstances of the case, including the findings of unlawful conduct and the conduct of the proof. The first reclaimer’s applications for living expenses, initially to the extent of £6,960 per month ([2010] CSOH 71), had shown that he and his family had lived well. In the event that the Lord Ordinary had erred, however, the court was not bound to remit the matter for reconsideration (cf Cullen v Cullen, 2000 S.C. 396, LJC (Cullen) at para.5).

C

D

Decision 3 Kelvin Road

[39] In the first tranche of this reclaiming motion, the first reclaimer argued (unsuccessfully) that the Lord Ordinary had not applied the appropriate standard of proof to the respondents’ allegations of unlawful conduct ([2013] CSIH 81, paras 48–50). On that basis, it was submitted that her findings of extortion and fraud had been unwarranted. In the present (second) tranche, the first reclaimer objected to the Lord Ordinary’s approach to the evidence of fraud in two further respects. First, she rejected certain evidence of his income, in 1993, as an auto electrician. Secondly, she inferred, in the absence of evidence to the contrary, that the deposit of £4,000 had been derived from unlawful conduct.

[40] The court is satisfied that there was no credible and reliable evidence before the Lord Ordinary of the first reclaimer’s earned income in 1993. The first reclaimer relied on his own testimony and the evidence of Mr Robert Thomson and Mr Giffin as former employees of West of Scotland Auto Electrics.

Whilst he had claimed to have had an annual income of £14,000, he was not able to produce any documentation in support of his position. Mr Thomson did not know how much the first reclaimer had earned. Neither Mr Thomson nor Mr Giffin was able to confirm the first reclaimer’s income at the material time.

Whilst it may be correct to observe that their evidence was not expressly challenged, that was probably because it was not of significant value. All it

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amounted to was that the first reclaimer did work for West of Scotland Auto Electrics in some capacity in about 1993.

[41] The first reclaimer’s unsubstantiated position was undermined by adminicles of evidence spoken to by other witnesses. Most significant was the evidence of Mr Neill Thomson regarding the inconsistent declarations of the first reclaimer’s income in his loan and endowment policy applications.

The first reclaimer’s interaction with the tax authorities, too, which was spoken to principally by Mr Thomson, Mr Macfie and the third reclaimer, did not support the source or amount of earnings contended for. It is notable that even the name of the alleged employers, referred to variously as “West Coast Auto Electrics”, “West of Scotland Auto Electrics” and “West of Scotland Autos”, was a matter of some doubt.

[42] In the circumstances, the Lord Ordinary’s acceptance of Mr Neill Thomson’s evidence, and her rejection of the vague and varying accounts of the position from the remaining witnesses, including the first reclaimer himself, cannot be faulted. Her finding, that the first reclaimer had falsely declared his income in applying for a loan in respect of 3 Kelvin Road, naturally followed.

[43] There was no credible and reliable evidence before the Lord Ordinary of any legitimate source for the deposit of £4,000. The Lord Ordinary was unable to make any positive findings in respect of the first reclaimer’s income. No other explanation was forthcoming. The question is then whether the Lord Ordinary was entitled to infer, as a consequence, that the deposit was derived from unlawful conduct. Where funds may have been derived from one or more of various forms of unlawful conduct, there is no requirement to identify a direct link with particular unlawful conduct (Proceeds of Crime Act 2002, s.242(2) (b)). That is not to say that, had there been no evidence of unlawful conduct whatsoever, the Lord Ordinary would have been entitled to draw the inference that she did. As the respondents submitted, if somewhat tangentially, the burden was on them to prove that the funds were obtained by, or in return for, unlawful conduct. Where, however, the respondents had led circumstantial evidence raising an inference of unlawful conduct, the onus shifted to the first reclaimer to show that the obvious adverse inference ought not to be drawn (Lewis, Manual of the Law of Evidence (1925) p.242, para.(e)). Thus, it may be said that the burden shifted in the limited sense that the first reclaimer required to dispel any such inference (Walkers, Evidence (3rd edn), para.2.1.2; on terminology in Scotland, however, see also Macphail, Evidence (1987), para.22.01).

[44] The circumstances of the purchase of 3 Kelvin Road must be looked at as a whole. The source of the deposit of £4,000 was unexplained in the context of £36,000 (of the £40,000 purchase price) having been obtained by fraud. Against the totality of evidence in respect of the frauds perpetrated by the first reclaimer in respect of various properties, including 3 Kelvin Road, the Lord Ordinary was entitled to conclude that the deposit of £4,000 called for an explanation as to its source. Against the proved background of unlawful conduct on the part of the first reclaimer generally, and in the absence of an explanation, the only reasonable inference was that the deposit had been derived from unlawful conduct of a similar nature.

[45] For these reasons, the first reclaimer’s criticisms of the Lord Ordinary’s substantive findings in this ground of appeal must be rejected.

Expenses: scale

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[46] The general award of the expenses of process in favour of the respondents is not challenged. It is not a ground of appeal that any particular aspect of the proceedings should have been excluded from the general award. That much

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was reflected in the submissions of the reclaimers, which did not seek to analyse in any great detail the chronology of events that unfolded before the Lord Ordinary. This court is thus concerned only with the scale, and not the scope, of the general award. The question is simply whether the Lord Ordinary was entitled to conclude that the threshold justifying an award of expenses on the agent and client, client paying, scale was met. It is agreed that the Lord Ordinary identified the correct test (McKie v Scottish Ministers). The point is simply whether unreasonable or incompetent conduct on the part of the reclaimers had caused unnecessary expense, such that the sanction of expenses on the agent and client, client paying, scale became appropriate (see Baker Hughes v CGC Contracting International, 2005 1 S.C. 65, Lady Smith at para.18).

[47] Whilst the court might not have reached the same conclusion as the Lord Ordinary, the decision on the appropriate scale of expenses was one for the exercise of her discretion. She had a unique view of the proceedings, and particularly the proof. She formed the view that the way in which both reclaimers had conducted their defences had caused unnecessary expense.

Various examples of objectionable conduct were mentioned. The Lord Ordinary highlighted the “unusual and unsatisfactory” instruction of counsel, close to the diet of proof and without adequate funds for preparation; a state of affairs that was maintained throughout the proof. She cited the fundamental failure of the reclaimers to engage with the questions before the court. She pointed to their insistence on pursuing irrelevant matters throughout the proceedings. She noted that, in putting the respondents to their proof, the reclaimers had failed to provide explanations, or to lead detailed evidence, where properly required. Instead, they had led vague and irrelevant evidence.

They had failed to grasp the significance of the evidence led by the respondents.

Notably, they advanced allegations of a lack of independence on the part of the interim administrator, the civil recovery unit and the court; moving for the Lord Ordinary to decline jurisdiction on many occasions.There were numerous examples of avoidable adjournments of the proof, which had also wasted court time, caused by the conduct of the reclaimers or one or other of them.

[48] The court is satisfied that the Lord Ordinary was entitled to reach the decision to award expenses on the agent and client, client paying, scale for the reasons which she has given. The themes identified, underlying the whole of the proceedings, provided ample foundation for the conclusion that unnecessary expense had been created by the reclaimers’ incompetent and unreasonable conduct. The reclaimers’ persistent undermining of the efficiency of proceedings was amply demonstrated. There being no basis upon which to interfere with the Lord Ordinary’s discretion, this ground of appeal is rejected.

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Expenses: modification

[49] It is not disputed that the Lord Ordinary identified the correct test in considering whether to modify the first reclaimer’s liability in expenses (Legal Aid (Scotland) Act 1986, s.18(2)). The Lord Ordinary had to consider whether the award was reasonable and one which the first reclaimer should be required to pay (Bell v Inkersall Investments (No 2)). It was relevant to take account of all the circumstances, including not only the parties’ means but also their conduct in connection with the dispute. Thus, the Lord Ordinary was entitled to take account, as she did, of both her substantive findings of unlawful conduct and her earlier assessment of the conduct of the proof in her subsequent assessment of the appropriateness of modification.

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[50] It was for the first reclaimer to satisfy the court that modification of his liability was appropriate in all the circumstances. It is evident, from the terms of her decision, that the Lord Ordinary took account of all the information that was presented to her. In particular, she had regard to the first reclaimer’s assertion, and it was no more than that, that he had no assets. That assertion was of little consequence standing the Lord Ordinary’s contrary findings in respect of his interest in Thomson’s Bar, Springburn. In the absence of credible and reliable information regarding the first reclaimer’s means, there is nothing to suggest that a general unmodified award was unreasonable. The Lord Ordinary’s decision is also readily understandable in the context of her significant findings of unlawful conduct on the part of the first reclaimer. In the face of such findings, and the respondents’ consequent and substantial success, there was no apparent basis upon which to hold that it would have been reasonable for the public to fund the whole proceedings.

[51] There being no grounds advanced by the first reclaimer that would justify interfering with the Lord Ordinary’s discretion on this point, this ground of appeal is also rejected.

Expenses: reclaiming motion

[52] The respondents sought the expenses of the reclaiming motion. This was not opposed. The first reclaimer sought modification of the award, yet his position remained as it had been described before the Lord Ordinary. The respondents opposed the motion, principally on the basis of his interest in Thomson’s Bar. In view of the nature of the action, and the quality of information presented in respect of the first reclaimer’s assets, the court is not satisfied that any modification of expenses should be made. For the avoidance of doubt, the award of expenses in respect of the third reclaimer is limited to the extent of the executry estate.

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A INNER HOUSE Lord Brodie BOYD v FORTUNE Process—Reponing note—Summary application—Tenancy deposit scheme—Failure to comply with Rule of Court 40.7(2)—Inadequate medical certificate In a summary application brought in terms of regs 9 and 10 of the Tenancy Deposit Schemes (Scotland) Regulations 2011 the appellant sought to be reponed against the deemed abandonment of his appeal by reason of his failure to comply with the requirements of Rule of Court 40.7(2). The appellant had represented himself at a proof and had given evidence before the sheriff; the appellant had appealed the decision of the sheriff to the sheriff principal. At the hearing before the sheriff principal although the pursuer was in attendance and represented, the defender and current appellant was not.

The appellant put certain information before the sheriff principal by way of email which included a form of medical report from a hospital in Nice date stamped 17 June 2014 as an explanation for his non-attendance. The sheriff principal decided that his failure to appear at the appeal or to be represented was a failure which could not be excused and she dismissed the appeal for want of insistence. The appellant was in France when he marked the appeal and had not arranged representation. He failed to comply with the requirements of Rule of Court 40.7(2) which required him to lodge an appeal print in proper form. The appellant then applied to be reponed but he did not attend the hearing which was fixed by the court and instead emailed a letter said to be from a Doctor confirming he was unfit to travel. The letter accompanying the letter from the doctor indicated that a copy of the document was not to be passed to the respondent.

Counsel for the respondent moved the court to refuse to repone the appellant and treat the appeal as being abandoned because: the grounds in the reponing note were insufficient; the appeal was incompetent; when one contrasted the consequences to the pursuer and respondent against the consequences to the appellant, fairness indicated that the appellant should not be reponed; this was yet another failure to appear by the appellant; and an entirely inadequate document had been put forward in explanation for his non-attendance before the sheriff principal.

In holding that there was absence of good reason for the appellant’s non-attendance and no reason whatsoever for his not instructing representation and treating the application to be reponed as abandoned for want of insistence and therefore to be refused, the court issued the following opinion which was delivered by Lord Brodie on 22 October 2014.

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Introduction

[1] This is a motion by the appellant and defender in an appeal from a decision of the sheriff principal of Lothian and Borders dated 30 July 2014 in a summary application at the instance of Jamie Boyd against Mark Fortune.

The summary application was brought in terms of regs 9 and 10 of the Tenancy Deposit Schemes (Scotland) Regulations 2011 which provide that where a landlord has failed to pay a deposit to the administrator of an approved scheme as required by reg.3 the sheriff must order the landlord to pay the tenant an amount not exceeding three times the amount of the tenancy deposit. In this

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motion the appellant seeks to be reponed against the deemed abandonment of his appeal by reason of his failure to comply with the requirements of Rule of Court 40.7(2).

Procedural history

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[2] The history of the application is that the matter went to proof before the sheriff at Edinburgh and the sheriff made an award in the sum of £1,005. The appellant had represented himself and had given evidence before the sheriff at that proof. He had been served a copy initial writ in the summary application by sheriff officers at an address in Corstorphine. He had lodged answers in response to that initial writ. The sheriff’s decision was appealed by the current appellant to the sheriff principal. At the hearing before the sheriff principal although the pursuer and current respondent was in attendance and represented, the defender and current appellant was not. The appellant put certain information before the sheriff principal by way of email which included a form of medical report from a hospital in Nice date-stamped 17 June 2014 in explanation for his non-attendance. For the reasons narrated in her note dated 30 July 2014 the sheriff principal decided that the appellant’s failure to appear at the appeal or to be represented was a failure which could not be excused. She accordingly dismissed the appeal to her for want of insistence. It is that decision which is now the subject of an appeal to this court.

[3] When the appellant marked an appeal to this court it would appear that he was in France and had not instructed representation. Notwithstanding the terms of Sheriff Court Ordinary Cause Rule 31.3, the appellant printed a copy of the sheriff principal’s interlocutor of 30 July 2014 and marked an appeal on that copy. While a question might arise as to whether or not that constituted strict compliance with the requirements of Ordinary Cause Rule 31.3, the appeal was accepted by the court and nothing now turns on that.

The appellant further lodged a note of appeal to the Court of Session repeating his designation by reference to the Corstorphine address but adding “(domiciled France)”.

[4] The Court of Session received the sheriff court process in respect of the appeal on 19 August 2014. In terms of Rule of Court 40.7(2) the appellant had 28 days after that date to lodge a process in accordance with Rule of Court 4.4, to lodge six copies of a print and to send a copy of the appeal print to the respondent. On 19 August 2014 a letter was sent from the Inner House and Extracts Department of the Court of Session to the appellant at the Corstorphine address, setting out the requirements of the Rules of Court in respect of an appeal. The requirements of Rule of Court 40.7(2) were not complied with by 16 September 2014. Nor have they been complied with since in respect that no appeal print in proper form or full process has been received. Accordingly, the appellant’s appeal was deemed to be abandoned in terms of Rule of Court 40.15(1).

[5] On the appeal having been deemed to have been abandoned, the appellant enrolled a motion in terms of Rule of Court 40.16 to be reponed from the deemed refusal of the appeal. In terms of the rule it is open to a procedural judge to grant such a motion on such conditions as to expenses or otherwise as he thinks fit and that was the application which came before me on 22 October 2014. The respondent was present and represented by counsel[. . . .]. The appellant was not present. Neither was he represented. By way of explanation for the appellant’s failure to appear or be represented there had been sent to the offices of court an email sent on 22 October 2014 at 09:02. The email did not bear the name of any individual but included a

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reference to “4M Limited”, and the Corstorphine address by reference to which the appellant has been designated in the summary application. The email was in these terms: “We have been asked to send in the following: “Email confirming intimation of motion on 20 September 14. Dr letter confirming Mr Fortune still unfit to travel and is still abroad. Mr Fortune had hoped to be able to return prior.

“Please therefore can you arrange (a) to sist the appeal until counsel can be instructed or Mr Fortune can attend, (b) continue (as above) for two months, (c) to grant the motion and enter the appeal in process”.

“The letter goes on to say: “Being a confidential medical document a copy of same may NOT be passed to the pursuer Mr Boyd or his agents”.

There was attached to that email a scanned document in the form of a medical report which has the heading of a particular clinic in the Centre Hospitalier Universitaire de Nice. It identified the appellant by reference to an address in Comely Bank. It bears to be “in soul and conscience”. The document is in precisely the same terms as the medical report which was before the sheriff principal on 30 July 2014. However the document which was before the sheriff principal bore a date-stamp of the clinic dated 17 June 2014 whereas the document which was sent with the email of 22 October 2014 bore the date 20 September 2014.

A

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Submissions of counsel

[6] In these circumstances [counsel for the respondent] moved that I should not continue the application but proceed to refuse to repone the appellant, the result of that being that the appeal would continue to be deemed to be abandoned. He set out five reasons in support of his motion. First, the grounds stated in the reponing note were insufficient. Second, the appeal was in any event incompetent. Third, when one contrasted the consequences for the pursuer and respondent on the one hand against the consequences for the defender and appellant on the other, fairness indicated that the appellant should not be reponed. Fourth, this was yet a further failure to appear by the appellant where the circumstances of his failure to appear were almost identical to the circumstances of his failure to appear before the sheriff principal. The appellant’s conduct did not merit the exercise of discretion in his favour. Fifth, as had been the case before the sheriff principal, an entirely inadequate document had been put forward in explanation for the appellant’s non-attendance. His non-attendance should not be excused and he should be taken to have failed to insist in his application to be reponed.

D

E

Issues and decision

[7] Despite the absence of any identifiable individual author of the email sent on 22 October 2014 at 09:02 I considered that it had to be understood as a communication made on behalf of the appellant making an application to repone the appellant notwithstanding his absence and thereafter to sist the appeal. Implicit may have been a motion to continue the application to repone to a future date in the event that I was not persuaded to repone the appellant immediately. Accordingly, having regard to the position adopted on behalf of the respondent by [counsel for the respondent], the first issue arising was whether I should entertain the application to be reponed or, alternatively, hold it to have been abandoned for want of insistence. That required me to consider the medical report bearing the date stamp of 20 September 2014 with a view

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to determining whether the appellant had put forward a sufficient explanation for his failure to attend or be represented. That being so I felt unable to comply with the direction in the email not to pass a copy of the medical report to the respondent’s representative and accordingly I arranged for a copy to be made available to [counsel for the respondent]. I did so for the following reasons.

First, because I could not give consideration to what I took to be a representation on behalf of the appellant without reading the medical report and, having done so, a fair determination of the issue as to whether the appellant had put forward a sufficient basis to excuse his failure to attend or instruct representation on his behalf required that there be disclosed to [counsel for the respondent], what was being put forward on the appellant’s behalf. [Counsel for the respondent], had to be given the opportunity to make any criticisms of the terms of the medical report which he thought appropriate. Second, nothing appears in the medical report specifying presenting symptoms beyond “chest and head pains” or describing the results of examination or making a diagnosis or indicating proposed treatment beyond “rest and relaxation”. Accordingly, disclosure of the contents of the report for the purposes of determining the appellant’s application intruded only very marginally upon the appellant’s privacy. Third, the medical report was in exactly the same terms as the document which had been before the sheriff principal and which is summarised and quoted from in paras 16 and 17 of her note dated 30 July 2014.

[8] Having considered the terms of the medical report and having heard [counsel for the respondent], I was persuaded that the application to be reponed should be refused for non-insistence. Had I not been so persuaded I would have refused the application as being without merit.

[9] I turn first to the medical report. It is entirely inadequate to explain the appellant’s failure either to attend in person on 22 October 2014 or to instruct representation on his behalf. There is the matter of date. I accepted that a date-stamp had been affixed to the report on 20 September 2014 by someone at the Nice hospital. However, there is nothing in the report to suggest that it relates to circumstances later than 13 January (presumably 2014). The report states that the appellant “is not fit to attend court until further prognosis is determined and his condition improves”. Clearly there is scope for a further prognosis being determined and the appellant’s condition improving between 13 January and 22 October or between 17 June (when the date stamp was previously attached to what appears to be exactly the same report as submitted to the sheriff principal) and 22 October or between 20 September and 22 October.

[10] Then there is the matter of the content of the report. It is entirely inspecific as to presenting symptoms, diagnosis, treatment and prognosis. It is therefore devoid of content which would allow any assessment of the position by the court.

It is not for the author of a report to determine the issue of fitness to attend court; that is a matter for the court, but even if it were a matter for the author of the report the report simply does not address fitness to instruct representation. It would appear from the steps that the appellant has taken in respect of the appeal, as narrated above, that he is capable of communicating with those in Edinburgh wherever his present whereabouts and whatever his state of health.

[11] Finally in relation to the medical report, it bears what looks to be a signature but the document gives no indication whatsoever of whose signature it is. It may be a clinician. It may be an administrator. It may be someone else associated with the Nice hospital. What is critical is that the court simply cannot know who it is that is claiming that the appellant is unfit to attend court “in soul and conscience”; whose soul, whose conscience?

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[12] In the absence of good reason for the appellant’s non-attendance and in the absence of any reason whatsoever for his not instructing representation in circumstances which include the same situation as having occurred before the sheriff principal, notwithstanding the terms of the email sent on the appellant’s behalf on 22 October at 09.02, I saw it as appropriate to treat the application to be reponed as abandoned for want of insistence and therefore to be refused.

[13] Had I not treated the application as abandoned, I would have refused it on its merits as disclosed by the material before me. It appeared to me that the points that [counsel for the respondent] made were sound. The reasons put forward in support of the application to be reponed are inspecific and ask more questions than they answer. This is what is attached to the motion sheet: “The motion is required due to the Royal Mail failing to deliver to the defender papers in relation the time frame. [Three f]ormal complaints over the previous month have been lodged with Royal Mail (The Gyle Sorting Centre) in relation mail not being delivered or going missing.

“The defender whilst travelling abroad was made aware the documentation was submitted. The defender had in the first instance lodged all paperwork with the original interlocutor when marking it for appeal and thus presumed the sheriff clerk had forwarded this to the court.”

As [counsel for the respondent] submitted, it is simply not apparent what are the relevant dates or the relevant documents and how any of this related to the requirements of the Rules of Court. There is no explanation for the basis of any presumptions made by the appellant. It is by no means clear how what appears attached to the motion sheet relates to what the court was invited to take from the medical report as to the appellant’s whereabouts and ability to travel.

[14] [Counsel for the respondent], submitted that in any event the appeal was incompetent. He had two bases for that: first, that where an appeal was not insisted upon in the court below, it could not then be insisted upon in a higher court—Manchester and County Bank Ltd v Moore, 1909 S.C. 246; [(1908) 16 S.L.T. 595] and second, no cause not exceeding £5,000 in value exclusive of interest and expenses shall be subject to review by the Court of Session – Sheriff Courts (Scotland) Act 1907, s.7, as amended. I was not persuaded that Manchester and County Bank Ltd was precisely in point. There, the appellant in the Court of Session had abandoned his appeal to the sheriff and consented to dismissal. Here, the appellant’s complaint is that the sheriff principal had not continued the appeal hearing. He was taken to have abandoned his appeal by virtue of non-insistence but he did not do so expressly in foro, as had occurred in Manchester and County Bank Ltd. However, it appeared to me that [counsel for the respondent], was on stronger ground with s.7 of the 1907 Act. Fuller argument would be required before coming to a confident decision that the section has the result of keeping within the privative jurisdiction of the sheriff court all matters brought by way of summary application where the only remedy sought is pecuniary and the sum sued for is less than £5,000. However, it seemed to me that it was strongly arguable that s.7 has the effect contended for by [counsel for the respondent]. I would see that as a factor mitigating against allowing the appellant to be reponed. As far as consequence for the parties were concerned, [counsel for the respondent] pointed to the respondent having already been put to significant inconvenience by the appellant’s failure properly to engage with the legal process. He would be faced by further inconvenience were the appellant to be reponed. The

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Boyd v Fortune (IH) (Notes)

2015 S.C.L.R.

consequences for the appellant in having his appeal dismissed, on the other hand, are purely financial. I saw force in this, [counsel for the respondent’s] third reason, although it rather ran into his fourth reason which related to the conduct of the appellant and I therefore considered them together. Whereas the respondent had followed all procedural requirements and been represented at all significant diets, the appellant had not. I did not suppose that to be due to any lack of sophistication on the part of the appellant. The sheriff principal describes him as a “repeat litigant in these courts” who is “well aware of the need to be present or instruct a solicitor”. The terms of the answers which I take the appellant to have prepared in response to the initial writ in the summary application, would suggest an understanding of the nature of litigation. In these circumstances I see it is appropriate to regard the appellant not only as someone who has not properly engaged with the court process but as someone who has chosen not to so engage. For that conclusion it is unnecessary to go beyond the circumstances which emerged on 22 October 2014, although the circumstances surrounding the hearing before the sheriff principal and the casual approach to the procedural requirements of the appeal to this court would point in the same direction. It was only at 09.02 on 22 October when the court received an email (and not an email directly from the appellant) indicating that the appellant would not be attending and was not represented. That is not the conduct of a conscientious and engaged litigant. The appellant had presumably had the medical report on which he proposed to rely stamped on 20 September 2014. The motion to repone was enrolled on 22 September 2014. Again this constitutes a factor to which I would have had regard in the exercise of my discretion. I granted [counsel for the respondent’s] motion on behalf of the respondent for the expenses of the appeal.

E

F

G

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SCLR 3 2015.indd 2

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Damages — Contributory negligence—Provocation Rennie’s Guardian v Morrison (OH)

251

June 2015 2015 S.C.C.R. 251−366

Process— Reponing note—Inadequate medical certificate Boyd v Fortune (IH) 361

Reduction— Expenses— Forged signature—Discretion Interest Chalmers v Chalmers (OH) 299 Phee v Gordon (IH) 343

Natural justice— Fair trial AD, Appellant (IH) 286

Scottish Civil Law Reports

Reparation— Scale Professional negligence—Duty of care—Duty to Scottish Ministers v Stirton (IH) 350 give advice about treatment Montgomery v Lanarkshire Health Husband and wife— 315 Divorce—Capital sum—Fair sharing Board (UKSC) Parker v Parker (OH) 259

2015 S.C.C.R. 251–366

Scottish Civil Law Reports Edited by Sheriff Michael J Fletcher AD, Appellant (IH) Boyd v Fortune (IH) (Notes) Chalmers v Chalmers (OH) Montgomery v Lanarkshire Health Board (UKSC) Parker v Parker (OH)

SCLR 3 2015.indd 1

286 361 299 315 259

Phee v Gordon (IH) (Notes) 343 Rennie’s Guardian v Morrison (OH) 251 Scottish Ministers v Stirton (IH) (Notes) 350

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