Burnett v Menzies Dougal WS
| Jurisdiction | Scotland |
| Judgment Date | 24 August 2005 |
| Neutral Citation | [2005] CSIH 67 |
| Date | 24 August 2005 |
| Docket Number | No 4 |
| Court | Court of Session (Inner House) |
Court of Session Inner House Extra Division
Lord Macfadyen, Lord Abernethy, Lord Kingarth
Process - Pleadings - Relevancy - "Believed and averred" - Whether pursuer had relevantly averred failures in duty and causation of loss
Solicitors - Professional negligence - Whether pursuer had relevantly averred failures in duty and causation of loss
In about 1991 the pursuer and her fiancé instructed the defenders to act for them in the purchase of a house. Before settlement of the transaction took place, the pursuer and her fiancé agreed that title was to be taken in the proportions four-fifths to the pursuer and one-fifth to her fiancé. There was to be a 'side agreement' providing that if they separated and the house was sold, each was to be entitled in those proportions to the proceeds of sale after deduction of the expenses of sale but before repayment of the mortgage, and that the pursuer's fiancé was to be responsible for payment of the mortgage. The pursuer's fiancé gave a handwritten note of the agreement to the defenders and advised the pursuer that he would instruct them to carry out the transaction in accordance with it. The title was taken in the agreed proportions, but no minute of agreement was prepared. The parties married in 1998 and separated in 1999. The pursuer's husband refused to agree to any settlement which provided him with less than one-fifth of the gross value of the house. On the advice of her solicitors, the pursuer negotiated a settlement on that basis. She then required to repay the mortgage herself.
The pursuer raised an action against the defenders claiming damages in the amount of the outstanding mortgage. The primary ground of fault was that they had failed in their duty to carry out instructions, as conveyed to them in the handwritten note, by failing to prepare and have executed a minute of agreement implementing its terms. The pursuer averred that she did not know exactly what had been said by her fiancé and the defenders about the note, but it was "believed and averred" that her fiancé had instructed the defenders to implement it The secondary ground of fault was that a solicitor of ordinary skill acting with ordinary care would have sought specific instructions from the pursuer before departing from the written instructions in the note. After procedure roll debate, the Lord Ordinary sustained the defenders' plea to the relevancy and dismissed the action. He held that the use of "believed and averred" was inappropriate, because a definite averment of the instructions given to the defenders in connection with the execution of a minute of agreement was necessary, and thus an essential substratum of fact in the pursuer's case was absent. The Lord Ordinary also held that the pursuer's averments of loss were irrelevant, and amounted to no more than that she had bought off a litigated dispute with her husband by payment of the outstanding mortgage. The pursuer reclaimed. She argued that it was sufficient to aver facts and circumstances capable of supporting the inference that the defenders had been so instructed, and that she had fulfilled that requirement by making full averments of the surrounding circumstances. She also argued that the secondary case of fault was independent of the first and did not depend on the defenders having been instructed to implement the handwritten note, but merely on their receipt of it. She sought to amend the pleadings in that regard. In respect of causation of loss, she argued that it was sufficient for the purpose of relevancy that she had acted on professional advice in negotiating a settlement with her husband. The defenders argued that the pursuer had not averred primary facts from which the inference desiderated could be made, and should not be allowed to amend the secondary case because there were no relevant averments of loss in relation to that case. They also argued that the pursuer's averments of causation of loss were irrelevant.
Held that: (1) there is no category of fact which cannot be pled using the formula "believed and averred", provided there are also averments of primary fact which are capable of supporting the inference made, and in the present case the pursuer had averred sufficient primary facts which were capable of doing so (paras 16-18); (2) the pursuer's averments of loss were relevant in respect of both the primary and the secondary case of fault, so that it was appropriate to allow the amendment (para 22); (3) the question of causation of loss ought not to be decided until after evidence had been led, because the assessment of whether negligence had caused loss, and if so how that loss ought to be quantified, were matters which depended on the facts and circumstances of the particular case and the application of general principles of law to those facts (para 26); and reclaiming motion granted, and proof before answer allowed.
Verona Burnett brought an action for damages for professional negligence against Menzies Dougal WS and the partners thereof. After procedure roll discussion on 27 June 2003 the temporary judge (RF Macdonald QC) sustained the defenders' plea to the relevancy and on 24 February 2004 dismissed the action. The pursuer reclaimed.
The cause called before an Extra Division, comprising Lord Macfadyen, Lord Abernethy and Lord Kingarth, for a hearing on the summar roll, on 2 June 2005.
Cases referred to:
Berry v Berry (No 2) 1989 SLT 292
Brown v Redpath Brown & Co Ltd 1963 SLT 219
County Personnel (Employment Agency) Ltd v Alan R Pulver & CoWLRUNK [1987] 1 WLR 916; [1987] 1 All ER 289
Crawford v BruceUNK 1992 SLT 524; 1992 SCLR 565
DSG Retail Ltd v Poundstretcher Ltd, 19 December 2003, unreported
Johnston v Robson 1995 SLT (Sh Ct) 26
Leslie v Leslie 1983 SLT 186
McCrone v Macbeth Currie & Co 1968 SLT (Notes) 24
Pilkington v WoodELRWLRUNK [1953] Ch 770; [1953] 3 WLR 522; [1953] 2 All ER 810
Ralston v Jackson 1994 SLT 771
Scrimgeour v Scrimgeour 1988 SLT 590
Shaw v Renton & Fisher Ltd 1977 SLT (Notes) 60
Stobo Ltd v Morrisons (Gowns) LtdSC 1949 SC 184; 1949 SLT 193
Strathmore Group Ltd v Credit Lyonnais 1994 SLT 1023
Upper Crathes Fishings Ltd v Bailey's ExecutorsSC 1991 SC 30; 1991 SLT 747
Textbooks etc. referred to:
Macphail, ID, Sheriff Court Practice (2nd ed, Scottish Universities Law Institute/W Green, Edinburgh, 1998), para 9.54
At advising, on 24 august 2005, the opinion of the Court was delivered by Lord Macfadyen-
Opinion of the Court-
[1] This is an action of damages for professional negligence against a firm of solicitors. The defenders' first plea in law is to the effect that the pursuer's averments are irrelevant and lacking in specification. After a hearing on the procedure roll, the Lord Ordinary, by interlocutor dated 24 February 2004, sustained that plea and dismissed the action. The pursuer has reclaimed against that interlocutor.
[2] It is common ground that in about February 1997 the pursuer and one Alistair Burnett, who had agreed to be married, decided to purchase a house at 46 Swanston Avenue, Edinburgh. They instructed the defenders to act on their behalf in the purchase. The defenders accepted their instructions. The partner in the defenders with whom they dealt was Mr Gordon Lockerbie, who is now deceased. On 6 February 1997 Mr Lockerbie submitted an offer for the house. The offer was accepted. The purchase price was £90,000.
[3] In art 3 of the condescendence, the pursuer avers that after the offer was accepted but before the transaction was settled she and Mr Burnett had certain discussions about the funding of the purchase. She avers (reclaiming print, p 6E):
'It was agreed that the bulk of the purchase price would be contributed by the pursuer. Mr Burnett was to contribute a small proportion of the price, and the balance was to come from a secured loan which Mr Burnett was to service. The pursuer was concerned to protect the investment which she was to make in the purchase of the house in the event that she and Mr Burnett subsequently separated. It was accordingly agreed between the pursuer and Mr Burnett that instructions would be given to Mr Lockerbie that certain arrangements should be made to protect the pursuer's investment. Those instructions were set out in a handwritten note of instructions prepared by Mr Burnett. … In terms of the handwritten note of instructions, title was to be taken in the proportions four fifths to the pursuer and one fifth to Mr Burnett. There was to be a "side agreement" providing that in the event of the parties separating and the house being sold, the pursuer was to be entitled to four fifths of the proceeds of sale after deduction of the expenses of sale but before repayment of any secured loan. Mr Burnett was to be entitled to the remaining one fifth of the proceeds of sale. Mr Burnett was to be responsible for repayment of the loan from his one fifth share. He was to be responsible for any shortfall between his one fifth share and the amount required to repay the loan, and entitled to any surplus after repayment. The handwritten note of instructions was given by Mr Burnett to Mr Lockerbie on or around 18th February 1997. Prior to delivery of the handwritten note Mr Burnett told the pursuer that he would issue instructions to Mr Lockerbie that the transaction should be...
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