William Sturgeon V. Andrew Frazer Gallagher
| Jurisdiction | Scotland |
| Judge | Lord Emslie |
| Date | 06 November 2002 |
| Docket Number | A2785/01 |
| Court | Court of Session |
| Published date | 06 November 2002 |
| OUTER HOUSE, COURT OF SESSION | |
| A2785/01
| OPINION OF LORD EMSLIE in the cause WILLIAM STURGEON Pursuer; against ANDREW FRAZER GALLAGHER Defender: ________________ |
Pursuer: Jones, Q.C., Young; Balfour & Manson (for Levy and McRae)
Defender: Ferguson, Q.C., Higgins; Bishops
6 November 2002
Introduction
[1]In this action the pursuer, who runs a farming business in partnership with his wife, sues for damages in respect of disabling injuries sustained when he was knocked down by the defender's car in 1994. Liability is admitted. In the amended Closed Record of September 2002, the damages sought include (i) a claim for loss of earnings, measured as a percentage of the diminished profits of the farming partnership consequent upon the pursuer's disability (pages 8A - 10C/D); (ii) a further claim for reimbursement of extra expenditure "equal to" a percentage of the outlays previously averred in connection with the partnership's loss of profits (page 10D); and (iii) claims in respect of certain relatives' services under Section 8 of the Administration of Justice Act 1982 (pages 13A - 14B).
[2]By interlocutor of 22 October 1997, the case was sent to the procedure roll on the defender's first plea-in-law. Against the background of a late offer by the pursuer of a proof before answer, I have now heard a debate in which counsel for the defender challenged the relevancy and specification of two distinct aspects of the foregoing averments of loss. In the first place, counsel took issue with the relevancy and specification of item (ii) above, namely the final clause of the following sentence appearing at page 10D of the amended Closed Record:
"Since the accident, [the pursuer] has suffered a loss of income equal to 80% of the partnership's fall in profits and he has incurred extra expenditure equal to 80% of the outlays hereinbefore condescended on."
In the second place, while counsel had no quarrel with the first part of item (iii) above, that is, the claim in respect of nursing and domestic services provided to the pursuer by various members of his family, they challenged the relevancy of the pursuer's further claim in respect of the work carried by his son on the farm since the accident in return for a wage of £50 per week.
The Claim for Extra Expenditure
[3]On the authority of Vaughan v Greater Glasgow Passenger Transport Executive 1984 S.C. 32, counsel for the defender accepted the relevancy of the pursuer's claim for loss of earnings as averred at pages 8A - 10C/D of the amended Closed Record. In particular, it was accepted that, as the former driving force within the farming partnership, the pursuer could legitimately quantify his post-accident loss of earnings by reference to the appropriate percentage of the loss of profit suffered by the partnership in consequence of his disability. After describing (at pages 8A - 9B) how the farming business was affected in the period following the accident, the pursuer's averments continue (at pages 9B - 10D) as follows:
"As a direct consequence of the pursuer's inability to work, the partnership operating the firms at Tunnoch and Auchenwynd has suffered a loss of income and has incurred increased expenditure. It has not been possible to maintain livestock numbers with the result that there has been a loss of income from livestock sales. The loss of the pursuer's expertise as a stockman has resulted in reduced prices being obtained for the cattle. This loss from livestock sales commenced in 1999 and is likely to continue each year. This loss is reasonably estimated at £5,466 per annum. There has also been a loss of income from milk sales due to lower yields. It is reasonably estimated that the loss of income from milk sales for year ends 1995-2000 amounts to about £31,051 and that the loss of income will continue at about £9,647 per annum. The farming partnership has also incurred additional business expenses as a result of the pursuer's accident. An employee has been hired at a cost of about £2,856 per annum to operate the contracting business. Additional repairs and maintenance costs in respect of buildings, machinery and fencing have arisen due to the inability of the pursuer to carry out such work. The total additional cost of repair for year ends 1995-2000 is reasonably estimated at £33,704 and these costs will continue at approximately £5,617 per annum. The partnership's overdraft has increased substantially since the accident due to the lower income receipts and higher expenditure. The additional bank charges incurred in the period 1995-2000 is £22,912 and such additional expenditure continues at approximately £6,725 per annum. The partnership has also incurred items of capital expenditure to enable the pursuer to continue providing some input in the business. A four wheel bike was purchased in 1994 at a cost of £3,300. A cordless telephone was purchased in 1994 at a cost of £99 to enable the pursuer to have ready contact with his wife in the event of an emergency. When purchasing a new tractor, the partnership required to purchase a larger tractor to ensure that it could be used by the pursuer. The additional cost of the tractor was about £6,000. These capital items will require to be replaced approximately every 4 years. The pursuer farmed in partnership with his wife. His wife's involvement was mainly for taxation reasons. The pursuer estimates that, prior to the accident, he provided services to the partnership amounting to about 80% of the total of services provided by him and his wife. His income from the partnership was 80% of its net profit. Since the accident, he has suffered a loss of income equal to 80% of the partnership's fall in profits and he has incurred extra expenditure equal to 80% of the outlays hereinbefore condescended on."
[4]Put shortly, counsel for the defender complained that since the averred heads of increased expenditure by the partnership must (along with the averred losses of income) form part of the calculation of the firm's loss of profit, and consequently of the pursuer's claim for lost earnings, the pursuer could not relevantly maintain a further claim in respect of the same heads of extra expenditure. Moreover, in face of what had gone before, it was not clear from the averment at page 10D how "he" (the pursuer) had incurred this extra expenditure. Alternatively, if (as appeared to be implied) the "outlays" referred to were in any way different from the "extra expenditure" condescended on, the defender was in the dark as to what these might comprise and would suffer material prejudice in preparing for a proof.
[5]In response, counsel for the pursuer confirmed that the extra expenditure in question went no further than the heads itemised at pages 9D - 10C, but nevertheless maintained that the averment at page 10D was sufficiently relevant and specific to warrant probation alongside the preceding claim for loss of earnings. The precise basis of this additional claim was not, however, explained in the course of the debate. At one point, junior counsel for the pursuer intimated a wish to "clarify the matter" by substituting "income" for "profits" in the critical sentence at page 10D, but his senior subsequently declined to move such an amendment, perhaps recognising that this might adversely affect the relevancy of the pursuer's loss of earnings claim which had not hitherto been under challenge.
[6]On this issue I have reached the conclusion, without much hesitation, that the pursuer's averment at page 10D regarding extra expenditure incurred by him is neither relevant nor sufficiently specific to warrant probation. Even accepting that the "outlays" mentioned there do not go beyond the various items of partnership expenditure averred at pages 9D - 10B, I still have difficulty in understanding how these outlays can be brought into account twice or, failing that, what extra expenditure can have been incurred by the pursuer himself "equal to 80%" of their value. In my view it is not without significance that a clarifying amendment for the pursuer, along the lines discussed above, was in contemplation during the debate. In all the circumstances, I propose to exclude the disputed averment at page 10D from probation. However, before doing so, I shall (with the agreement of parties) put the case out By Order to enable the pursuer, if so advised, to attempt a cure without incurring the delay and expense of a reclaiming motion.
The Claim under Section 8
[7]For the defender, it was submitted that Section 8 of the 1982 Act, properly construed, covered services in the nature of physical care and support rendered to the injured party as an individual. Accordingly, the present claim in respect of farming labour rendered by the pursuer's son to the partnership for a wage was irrelevant and should be...
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