Promontoria (Henrico) Ltd v Friel
| Jurisdiction | Scotland |
| Judge | Lord Ericht |
| Judgment Date | 10 December 2019 |
| Neutral Citation | [2020] CSIH 1 |
| Docket Number | No 13 |
| Court | Court of Session (Inner House) |
| Date | 10 December 2019 |
[2020] CSIH 1
First Division
Lord Ericht
Clyde v Clyde 1958 SC 343; 1958 SLT 256
Graham v Graham (1847) 10 D 45
Japan Leasing (Europe) plc v Weir's Tr (No 2) 1998 SC 543; 1998 SLT 973
Robertson v Council of the Law Society of Scotland [2015] CSIH 95; 2016 SLT 103
Scottish and Universal Newspapers Ltd v Gherson's Trs 1987 SC 27; 1988 SLT 109
Walker v Nisbet 1915 SC 639; 1915 1 SLT 293
Winchester v Smith (1863) 1 M 685
Carloway (Lord), “Court of Session” in Stair Memorial Encyclopaedia: The Laws of Scotland (Reissue, Butterworths/Law Society of Scotland, Edinburgh, 2007), para 122(4)
Dickson, WG, A Treatise on the Law of Evidence in Scotland (3rd Grierson ed, T & T Clark, Edinburgh, 1887), paras 236, 237, 1340
Gloag, WM, The Law of Contract: A treatise on the principles of contract in the law of Scotland (2nd ed, W Green, Edinburgh, 1929), p 717
Macfadyen, DJD, Court of Session Practice (Bloomsbury Professional, Haywards Heath, 2005), Div F, para 451
President (Lord) (Carloway), Practice Note (No 1 of 2017): Commercial Actions (Court of Session, Edinburgh, March 2017), para 18 (Online: www.scotcourts.gov.uk/docs/default-source/rules-and-practice/practice-notes/court-of-session/court-of-session---practice-note---number-1-of-2017-(commercial-actions).pdf?sfvrsn=4 (15 February 2020))
Scottish Law Commission, Law of Evidence (Memorandum no 46, September 1980), vol 1, para A.03 (Online: www.scotlawcom.gov.uk/files/5013/1463/0615/cm46-1.pdf (15 February 2020))
Scottish Law Commission, Report on Corroboration, Hearsay and Related Matters in Civil Proceedings (Scot Law Com no 100, 1986), paras 1.3, 3.71 (Online: www.scotlawcom.gov.uk/files/3912/8015/1551/26-07-2010_1439_424.pdf (15 February 2020))
Process — Proof of tenor — Casus amissionis — Copy document produced and strong evidence of its execution and tenor led — Evidence of unsuccessful search for principal — Whether sufficient evidence of casus amissionis
Evidence — Admissibility — Copy document — Copy document certified by firm of solicitors in the firm name — Whether copy required to be certified by a natural person — Civil Evidence (Scotland) Act 1988 (cap 32), sec 6
Promontoria (Henrico) ltd brought an action under the commercial cause rules (Act of Sederunt (Rules of the Court of Session 1994) 1994 (SI 1994/1443 (S 69)), Ch 47) in the Court of Session. The pursuer sought to prove the tenor of a personal guarantee executed by the defender in favour of a bank. The pursuer averred that the bank's interest in the personal guarantee had been assigned to it. The cause called before the commercial judge (Lord Ericht) for proof, after which the commercial judge granted decree in favour of the pursuer ([2019] CSOH 2). The defender reclaimed.
The Civil Evidence (Scotland) Act 1988 (cap 32), sec 6, provides, “a copy of a document, purporting to be authenticated by a person responsible for the making of the copy, shall, unless the court otherwise directs, be– (a) deemed a true copy; and (b) treated … as if it were the document itself.”
The pursuers raised an action to prove the tenor of a personal guarantee which had been executed by the defender in favour of a bank. The pursuers averred that the bank's interest in the personal guarantee had been assigned to them. The principal guarantee had gone missing and a copy, which was certified by a firm of solicitors, was produced. At proof, the pursuer led evidence from the solicitor who had witnessed the defender signing the principal guarantee and from a bank employee who spoke to the efforts made to find the principal. The defender accepted that he had signed a guarantee but stated that his liability was for a lower sum than that in the copy guarantee produced. The Lord Ordinary granted decree in favour of the pursuers. The defender reclaimed.
The defender argued that the casus amissionis (the circumstance of the loss) had not been proved and that the copy document was inadmissible as it had not been certified by a natural person or by the person who made the copy.
The pursuers contended that, where there was strong evidence of the execution of the guarantee and its tenor, only slight proof of casus amissionis was required. The copy was admissible as it did not require to be certified by a natural person.
Held that: (1) there could be no suggestion that the guarantee had been destroyed in order to end its effect, and sufficient casus amissionis had been proved as the principal was likely to have been mislaid in the bank's repositories (paras 40–44); (2) a firm or limited liability partnership could authenticate a copy document by signing it in the firm name and the certificate did not require to state that the signatory was responsible for making the copy. No separate proof was required in the absence of a challenge. Where a certified copy of a document was produced, a party could request the court to ‘otherwise direct’ and the challenging party ought to seek such direction in advance of proof and give reasons for doing so (paras 45–48); (3) in the interests of clarity and efficiency in a commercial case, a pursuer was entitled to produce only such parts of a document as were necessary to prove its case. On the evidence, the pursuer had clearly proved the terms of the assignation (paras 49–51); and reclaiming motion refused.
Observed that where a party wished to challenge the authenticity of a copy document in a commercial action, that should be made clear to the court at the preliminary and procedural hearings, and averring that the document was referred to for its terms was not sufficient for that purpose (paras 36, 37).
Scottish and Universal Newspapers Ltd v Gherson's Trs 1987 SC 27 commented upon.
The cause called before the First Division, comprising the Lord President (Carloway), Lord Brodie and Lord Malcolm, for a hearing on the summar roll, on 10 December 2019.
Eo die, the court refused the appeal for the reasons set forth in the opinion of the Court which was subsequently delivered by the Lord President (Carloway)—
Opinion of the Court—
[1] This is a reclaiming motion, arising in the context of an action of proving the tenor, against the interlocutor of the commercial judge dated 8 January 2019 ([2019] CSOH 2). The judge: (i) found and declared that on 28 November 2008 the defender executed a personal guarantee in favour of the Clydesdale Bank plc in respect of debts due by Glen TV Rentals Ltd up to a maximum of £800,000; and (ii) decerned against the defender for that sum in favour of the bank's assignees, namely the pursuers.
[2] The defender maintains that the commercial judge erred in holding that: (a) the pursuers had adequately proved the casus amissionis (the circumstance of the loss) of the principal guarantee; (b) a certified copy assignation, which the pursuers had produced, was admissible in terms of sec 6 of the Civil Evidence (Scotland) Act 1988 (cap 32); and (c) the copy produced proved that the benefit of any guarantee had been validly assigned to the pursuers.
[3] The case raises a broader issue in relation to the proof of documents, especially in the commercial court; in particular where there has been no challenge to the authenticity of a copy in advance of a proof.
[4] In November 2008 the defender and his daughter were directors and shareholders of Glen TV. On 23 March 2007, Glen TV had entered into a loan agreement with the bank. The pursuers averred, and the commercial judge ultimately found, that, in terms of a written guarantee dated 28 November 2008, the defender had guaranteed payment to the bank of all sums due to them by Glen TV up to a maximum of £800,000. The averments had explained how the principal guarantee had been lost. These averments were met with an admission that the defender had granted a guarantee and continued: ‘The document produced as the Guarantee is referred to for its terms, beyond which no admission is made’. This was followed by a number of calls relating to the pursuers' and the bank's preservation of, and searches for, the principal. On 29 July 2011, Glen TV and the bank had entered into a further agreement; this time for overdraft facilities.
[5] By letter of 28 October 2014, the bank demanded re-payment of, inter alios, the overdraft, which was then standing at about £57,000, by 5 November 2014. That sum not having been repaid, on 7 November 2014 the bank wrote a letter stating that, repayment of the overdraft and other sums not having been made, an ‘Event of Default’ had occurred in terms of the 2007 agreement. This meant that the bank were entitled to demand immediate repayment of all sums due.
[6] A total of £1,180,403.61 was certified as due on behalf of the bank by a manager of their parent company, namely the National Australia Bank Ltd. On 20 March 2015, a petition was presented by HM Revenue and Customs seeking orders to wind up Glen TV. On 2 April 2015, administrators were appointed.
[7] On or about 7 July 2015, the pursuers wrote to the defender, giving him notice of an assignation of the guarantee by the bank to them, and demanding payment of the maximum £800,000.
[8] The pursuers had lodged a photocopy of what they had averred to be the guarantee. The backing or cover sheet described the document as a guarantee by the defender to the bank for £800,000 relative to Glen TV. The first page set out the guarantee in those terms. There then followed 11 more pages before a signature page, which carried a warning about the need to take independent legal advice. The signature page contained a completed pro forma testing clause which stated that it had been signed by ‘Mr James Friel’. This was accompanied by a signature which read ‘James Friel’. The document was signed by a witness who was named in the testing clause as ‘Pamela...
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