Apollo Engineering Ltd v James Scott Ltd

Heard on 13 May 2013

Lord Hope (with whom Lord Clarke and Lord Carnwath agree)

From time to time cases come before the courts that try the patience of even the most phlegmatic of judges. This, I fear, is one of them. On the one side there is an articulate and determined litigant who suffers from an implacable belief that his case has not been dealt with justly and, because he has run out of money, cannot afford to be represented. On the other is an opposing party for whom these proceedings have been dragging on for far too long and which has little or no prospect of recovering any of its expenses. One may regret the situation in which that party finds itself. But our basic common law rule that a party is entitled to a fair hearing applies not only to those whom the court finds it easy to deal with, but to everyone. That is the standard the judges who have dealt with this case in the Court of Session set for themselves at each stage in the proceedings, as their carefully reasoned opinions amply demonstrate. So, had it not been for an order that they made because they regarded the proceedings as incapable of achieving anything of value, the case would not have been open to consideration by the Supreme Court at all. As it is, the course they took has raised the possibility which this court cannot ignore that the interlocutor which they pronounced may, after all, be appealable.

Mr and Mrs Politakis are the directors and the only shareholders of Apollo Engineering Ltd ("Apollo"). They wish to appeal to this court against two interlocutors that were pronounced in a case that was stated for the opinion of the Court of Session under section 3 of the Administration of Justice (Scotland) Act 1972 ("the 1972 Act") on 28 September 2007. The case had been stated on the application of Apollo before section 3 of the 1972 Act was repealed by paragraph 1 of Schedule 2 to the Arbitration (Scotland) Act 2010. The arbitration proceedings to which the stated case related arose out of a contractual dispute between Apollo and James Scott Ltd about pipe construction work which Apollo had been carrying out for James Scott Ltd in 1990 at Coulport. James Scott Ltd are the respondents to these proceedings.

On 18 January 2012 an Extra Division of the Inner House (Lady Paton and Lords Reed and Bracadale) refused a motion enrolled by Mr Politakis in his own name, as Apollo had run out of funds and could no longer afford legal representation: [2012] CSIH 4. He had asked the court to make an order under article 6 of the European Convention on Human Rights which would allow him to represent the company. He was invited to make submissions on his own behalf, and he did so both orally and in writing. The court held that it was well established by the authorities that Scots law does not permit a company to be represented by a director or an employee of the company. It can be represented only by an advocate or a solicitor with a right of audience: Equity and Law Life Assurance Society v Tritonia Ltd 1943 SC (HL) 88; Secretary of State for Business, Enterprise and Regulatory Reform v UK Bankruptcy Ltd 2011 SC 115. The Extra Division also held by a majority (Lord Reed and Lord Bracadale differing in this respect from Lady Paton) that, as the issues in the case were complex and it was unlikely that the appeal could be presented effectively by anyone without legal qualifications, article 6 did not require that Mr Politakis's motion should be granted. As he was not suitably qualified, this would not provide the company with an effective right of access to the court: Airey v Ireland (1979) 2 EHRR 305.

On 27 November 2012 the Extra Division (Lady Paton and Lords Menzies and Bracadale) pronounced a further interlocutor which dealt, among other things, with an opposed motion which had been enrolled by James Scott Ltd for the stated case to be dismissed: [2012] CSIH 88. It was in these terms:

"The Lords, having resumed consideration of the cause, refuse Mr Politakis leave to appeal to the Supreme Court; refuse the motion enrolled by Mr Politakis in June 2011 and amended on 18 April 2012 to sist himself in room and place of Apollo Engineering Limited; refuse the alternative motion to sist himself as a party to the court and arbitration proceedings; find Apollo Engineering Limited liable to the respondents James Scott Limited in the expenses of the two day hearing held on 7 and 8 July 2011, said expenses to be paid out of the sum held as caution for Apollo Engineering Limited by the Accountant of Court; remit an account thereof, when lodged, to the Auditor of Court to tax; dismiss the Stated Case and decern; reserve meantime any question of expenses in that process insofar as not already dealt with."

That interlocutor, leaving aside the orders about expenses, fell into three parts. First, Mr Politakis was refused leave to appeal to this court against the interlocutor of 18 January 2012 refusing his application to represent his company. Second, his attempts to sist himself as a party to the proceedings were rejected. That would have enabled him to represent himself, as a natural person is entitled to present his own case. But he was not a party to the arbitration or to the contract with James Scott Ltd, so there were no grounds for regarding him as entitled to be sisted in these proceedings in his own name. Mr Politakis has not sought leave from the Inner House to appeal against this part of the interlocutor. Third, the stated case was dismissed, so the proceedings in the stated case were brought to an end. The Extra Division did not give its opinion on the questions in the case, on which it had not heard any argument. It was of the opinion that, since at any future hearing Apollo would be unrepresented, it would be fruitless for it to permit the stated case proceedings to continue: [2012] SCIH 88, para 40. There has been no application for leave to appeal against that part of the interlocutor either.

The circumstances in which it is competent to appeal to the Supreme Court against a judgment of the Court of Session are set out in section 40 of the Court of Session Act 1988 ("the 1988 Act") which, so far as relevant to this case, provides:

"(1) Subject to the provisions of any other Act restricting or excluding an appeal to the Supreme Court and of sections 27(5) and 32(5) of this Act, it shall be competent to appeal from the Inner House to the Supreme Court –

(a) without the leave of the Inner House, against a judgment on the whole merits of the cause, or against an interlocutory judgment where there is a difference of opinion among the judges or where the interlocutory judgment is one sustaining a dilatory defence and dismissing the action;

(b) with the leave of the Inner House, against any interlocutory judgment other than one falling within paragraph (a) above.

(4) On an appeal under this section all the prior interlocutors in the cause shall be submitted to the review of the Supreme Court."

The answer to the question whether it is competent to appeal to this court against the interlocutors of 18 January 2012 and 27 November 2012 is not as straightforward as it might have been if the Court of Session had proceeded to answer the questions in the stated case. In John G McGregor (Contractors) Ltd v Grampian Regional Council 1991 SC (HL) 1 it was held that an opinion of the court upon questions of law given on consideration of a case stated under provisions such as those in section 3 of the 1972 Act did not constitute a "judgment" within the meaning of section 40(1) of the 1988 Act. The House dismissed Grampian Regional Council's petition of appeal as incompetent. But the facts here are different, as the Extra Division did not give its opinion on the questions of law that were before it in the stated case.

In this situation two questions arise. The first is whether, having regard to the terms of section 3 of the 1972 Act, the decision in McGregor applies to this case at all. Apollo is not seeking to appeal against any opinion. Its appeal is directed to the fact that the stated case has been dismissed. The second is whether, if the appeal is not incompetent for the reasons given in McGregor, that part of the interlocutor of 27 November 2012 which dismissed the stated case was a "judgment" against which an appeal to this court is competent under section 40(1) of the 1988 Act without the leave of the Inner House of the Court of Session. The Supreme Court directed that these two questions should be the subject of an oral hearing as to the competency of an appeal against that interlocutor. Mr Politakis was given permission, in the exceptional circumstances of this case, to represent Apollo at the hearing. The court was also assisted by submissions made by Mr Andrew Young QC, who had been appointed at the court's request as an advocate to the court by the Dean of Faculty.

Mr Politakis made it clear that he also wished to appeal against the interlocutor of 18 January 2012. But it is plain that this was an interlocutory judgment within the meaning of section 40(1) of the 1988 Act for which the leave of the Inner House was required to appeal against it, and the Inner House has refused his application for leave to appeal. It could be submitted to the review of this court under section 40(4) as one of the prior interlocutors in the cause. But that can only happen if an appeal is competently before this court under section 40(1) in the first place, and if it is...