Smith v Middleton
| Jurisdiction | Scotland |
| Judgment Date | 10 December 1971 |
| Date | 10 December 1971 |
| Docket Number | No. 4. |
| Court | Court of Session (Outer House) |
OUTER HOUSE.
Lord Emslie.
DamagesInterestAward of damages to widow and children in respect of death of husband and fatherCompetency of awarding interest from date earlier than decreePrinciples on which interest to be awardedInterest on Damages (Scotland) Acts, 1958 (6 and 7 Eliz. II, cap. 61) and 1971 (cap. 31), secs. 1 (1) and (1A).
Law ReformInterest on damagesDifficulty in operating statutory provisions in relation to jury awardWhether jury should state elements of award.
The Interest on Damages (Scotland) Act, 1971, enacts by sec. 1 that for subsec. (1) of sec. 1 of the Interest on Damages (Scotland) Act, 1958, there shall be substituted, inter alia, the following:"(1) Where a court pronounces an interlocutor decerning for payment by any person of a sum of money as damages, the interlocutor may include decree for payment by that person of interest, at such rate or rates as may be specified in the interlocutor, on the whole or any part of that sum for the whole or any part of the period between the date when the right of action arose and the date of the interlocutor. (1A) Where a court pronounces an interlocutor decerning for payment of a sum which consists of or includes damages or solatium in respect of personal injuries sustained by the pursuer or any other person, then (without prejudice to the exercise of the power conferred by subsection (1) of this section in relation to any part of that sum which does not represent such damages or solatium) the court shall exercise that power so as to include in that sum interest on those damages and on that solatium or on such part of each as the court considers appropriate, unless the court is satisfied that there are reasons special to the case why no interest should be given in respect thereof."
In an action of damages at the instance of the widow and children of a deceased victim of an accident the Lord Ordinary awarded to each pursuer a sum of damages in respect of loss of support and solatium. In opposing a motion by the pursuers for interest at seven per cent per annum on the whole of each sum from the date of the deceased's death to the date of the decree awarding damages, the defenders contended that the wording of subsec. (1A) indicated that it was not intended to apply to family claims, and that in any event it conferred a discretion which must be exercised on a selective and discriminating basis.
Held by Lord Emslie (Ordinary) (1), followingGray v. North British Steel Foundry Ltd., 1969 S.C. 231, that an action by a widow and children for damages arising out of the death of a husband and father was one in respect of personal injuries sustained by them, and that consequently subsec. (1A)applied to the awards to the pursuers and, in the absence of special reasons, made it mandatory on the court to exercise its power to award interest; (2) that the new subsec. (1), read along with subsec. (1A), conferred on the court a discretionary power which must be exercised in a selective and discriminating manner, so that interest might be awarded on the whole or any part of a sum of damages, and on different parts at different rates for different periods; (3) that interest should be awarded upon such parts of a whole sum of damages as had been withheld from a pursuer through the normal delays of his particular litigation; and (4) that, in exercising its power under subsec. (1A), the court should grant decree for a sum of damages, assessed on accepted principles, together with an additional sum representing interest at specified rates for specified periods, ending with the date of the decree, on such parts of the sum of damages as should bear interest, so that the damages awarded would consist of the total of the two sums; and that interest would run on that total from the date of the decree until payment.
Further held, accordingly, that in the case of each pursuer's sum of damages interest should be awarded on the part of the loss of support element which was referable to the period from the date of the deceased's death to the date of the decree for damages at three per cent per annum (being half the average of the rates prescribed by the court for interest on awards of damages during that period), and on the part of the solatium element referable to the same period at six per cent per annum.
Macrae v. Reed and Mallik Ltd., 1961 S.C. 68,followed, except quoad interest on solatium.
Observed that the application of sec. 1 of the 1971 Act to jury awards might involve great difficulty unless juries were to be required to state the component elements of their awards.
Mrs Jane Hamilton or Smith, as an individual and as tutrix and administratrix-at-law of her younger child, Ronald M'Donald Smith, and John M'Lellan Smith (her elder child) brought an action of damagescognitionis causa tantum against Mrs Robina White Petrie or Middleton, as widow and sole personal representative of William Gray Middleton, in respect of the death of Ronald M'Donald Smith, husband of the first pursuer and father of the two children. Smith and Middleton had sustained fatal injuries in a road accident, Smith having been a passenger in a car driven by Middleton.
The following narrative is taken from the opinion of the Lord Ordinary (Emslie): "In this action of damages the pursuers, the widow and the two sons of her marriage to Ronald M'Donald Smith, were found entitled to damages from the defender, by the negligence of whose husband Mr Smith was killed in an accident which took place on 28th November 1968. The summons was signeted on 11th March 1970 and the proof in this action, and in another action arising out of the same accident, began on 22nd June 1971. By interlocutor dated 2nd August 1971 I awarded, in name of damages estimated in accordance with the usual principles, the sum of 7569 to the widow, the sum of 1950 to the elder son, and the sum of 2450 to the younger son.1 Having regard to the terms of the Interest on Damages (Scotland) Act, 1971 (cap. 31), section 1, I also awarded to each member of the family the sum, if any, which might fall to be added to her or his sum of damages as the result of that enactment. I took this course because it appeared to me that the section to which I have referred might, in this case, require me to make some addition to each of these sums of damages; and, since I had heard no argument upon the section, I arranged to have the case put out for hearing upon the effect which should be given to it in each of the three awards. This hearing has now taken place."
On 10th December 1971 the Lord Ordinary decerned against the defender for the addition to each award of a sum representing interest at three per cent per annum on the part of the loss of support element attributable to the period from 28th November 1968 (the date of death of the deceased) and 2nd August 1971 (the date of the interlocutor awarding damages),
and at six per cent per annum on the part of the solatium element attributable to the same periodLORD EMSLIE'S OPINION.[His Lordship gave the narrative quoted supra, and continued]
Before dealing with the arguments which have been presented to me, it is desirable to set out the law as to interest on damages before 12th May 1971, the date on which the Interest on Damages (Scotland) Act, 1971, was passed.
At common law the general rule was that, in actions of reparation, interest was awarded on sums of damages only from the date of the final decree. In special circumstances, of course, such as improper delay on the part of a defender in the conduct of litigation, the court's power to award interest from an earlier date was undoubted. This appears clearly from the opinions of their Lordships of the Second Division in the case of Macrae v. Reed and Mallik Ltd.SC, 1961 S.C. 68. The reason for this rule was that it was only at the date of final decree that the illiquid claim for damages was quantified and made liquid. As appears further from the opinions of the Lord Justice-Clerk, Lord Mackintosh and Lord Strachan in Macrae, the rule was regarded as being in consonance with the accepted principles as to interest laid down thus by Lord Westbury in Carmichael v. Caledonian Railway Co., (1870) 8 Macph. (H.L.) 119 (at p. 131): "Interest can be demanded only in virtue of a contract, express or implied, or by virtue of the principal sum of money having been wrongly withheld, and not paid on the day when it ought to have been paid."
An innovation upon the common law rule was made by the passing of the Interest on Damages (Scotland) Act, 1958. Section 1 (1) of that Act was then in the following terms: "Where the court having jurisdiction in any action for damages pronounces an interlocutor decerning for payment by any person of a sum of money as damages, the interlocutor may, if the circumstances warrant such a course, include decree for payment by that person of interest on the sum or any part thereof at such rate as may be specified in the interlocutor, from such date...
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