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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> McClelland v. Stuart Building Services [2003] ScotCS 18 (28 January 2003) URL: http://www.bailii.org/scot/cases/ScotCS/2003/18.html Cite as: [2003] ScotCS 18

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McClelland v. Stuart Building Services [2003] ScotCS 18 (28 January 2003)

OUTER HOUSE, COURT OF SESSION
A2074/99	OPINION OF T.G. COUTTS, Q.C. sitting as a Temporary Judge in the cause DAVID McCLELLAND Pursuer; against STUART BUILDING SERVICES Defenders:   ________________

 

 

Pursuer: Davidson; Campbell Smith, W.S.

Defenders: Crawford; Aitken Nairn, W.S.

28 January 2003

1. The pursuer sustained an injury in an accident on 9 November 1996 in the course of his employment with the defenders. He instructed solicitors in Perth and on 19 December 1996 they wrote a letter intimating a claim. They wrote to "Stuart Building Services Limited". On 23 April 1997 the insurers of the present defenders wrote to those solicitors in relation to the accident. They said that their investigations were complete and they repudiated liability. In bold type at the head of their letter the insurers stated: "Our insured - Stuart Building Services". The said solicitors failed to consider that the insurers thereby indicated clearly to them who their insured was and, consequently, who the employer of the pursuer was. The solicitors instructed Edinburgh correspondents to raise an action. That action was raised against two defenders, R & G Farming, the farm at which the pursuer was working and "Stewart Building Services Limited", giving as the address of those second defenders the same address as that of the present second defenders. That action was served on 8 November 1999, one day before the expiry of the triennium. In a chronology of events, produced and incorporated by the pursuer into his pleadings brevitatis causa it was stated that the summons was signetted on 8 March 1999. A letter from the Edinburgh agents then acting, Messrs Ketchen & Stevens, W.S. to Messrs Campbell Smith & Co., was also produced and referred to. That letter said that Ketchen & Stevens were instructed immediately prior to the expiry of the triennium. The case was thereafter sisted on 7 December 1999. The sist was recalled on 25 April 2000 on the unopposed motion of the then first defenders. On 30 August 2000 defences on behalf of the second defenders were allowed to be received late. On 21 November the pursuer abandoned his action against the first defenders and on 1 December 2000 sought leave to amend the summons and obtained warrant to serve that summons on Stuart Building Services.
2. Meantime, Messrs Ketchen & Stevens' instructions were withdrawn and Messrs Campbell Smith took over. It was not until the stage of defences being lodged by the limited company that those acting for the pursuer appreciated which legal entity his employers were. It appeared that they had originally consulted a telephone book, obtained a name, that of the limited company, and had proceeded thereafter with no further investigation thus ignoring the clear indication from the insurers about their insured.
3. Accordingly the action was not served upon the present, proper, defenders until 20 December 2000 despite their agents agreeing to accept service on 30 November 2000. From that narration it is apparent that the case is time-barred in terms of the Prescription and Limitation (Scotland) Act 1973. That was accepted by counsel for the pursuer.
4. Counsel for the pursuer stated to the court that it was accepted that with reasonable diligence the pursuer and his advisers could have raised proceedings within the triennium against the correct defender. The action against the present defender was time-barred. He sought however to persuade the court that the question to be determined was whether the errors which admittedly had been made were excusable or inexcusable and if excusable he sought to persuade the court to exercise its unfettered discretion in terms of section 19A of the Prescription and Limitation (Scotland) Act 1973. That provides that the court may, if it seems to it equitable to do so, allow (the pursuer) to bring the action. The defenders, at Procedure Roll, claimed that the pursuer had neither relevant nor specific averments which would entitle him to the exercise of that discretion. The pursuer sought a proof before answer on the whole case, or a preliminary proof, on the matter of section 19A.
5. The applicable general law was not disputed. In particular, it was not disputed that the discretion of the court was unfettered and that it was for the pursuer to provide averments to persuade the court that, in the circumstances, it was equitable to allow the action to proceed; see Donald v Rutherford 1984 S.L.T. 70 and Forsyth v A F Stoddart & Co Limited 1985 S.L.T. 51. Acts and omissions on the part of the pursuer's agents are the responsibility of the pursuer and if the expiry of the time-bar was due to the negligence of the legal adviser and there was a prima facie case against the adviser then the court would be reluctant to exercise its discretion. Prejudice to the pursuer and prejudice to the defender must exist in any case involving section 19A. Reference was made to Stephen v North of Scotland Water Authority 1999 S.L.T. 342; and also to Murray v National Association of Round Tables of Great Britain and Ireland, 2002 S.L.T. 204, as a case of mistaken identity.
6. The defenders argued that they had not been brought into the case as defenders until over a year after the expiry of the triennium. That the wrong defenders had been sued, a limited company and not the employing partnership was, it was submitted, entirely the fault of the pursuer's solicitors who had erred in their instructions at the time of service of the summons.
7. For the pursuer counsel frankly admitted that there had been an error. He attempted to maintain that in some way this error could be excused, claiming that the insurance company involved had not made it clear that the wrong defender was being sued. While not, as I understood him, going so far as to suggest there was some duty on insurers specifically to draw the matter to the attention of the pursuer's solicitors, he sought to find an excuse in the insurer not having told the pursuer's solicitors in terms that they had addressed their letter to the wrong party or not stating that they repudiated liability on the basis that the claim was not made against the pursuer's employers.
8. The mistake of the pursuer's local solicitors is apparent. They did not ascertain correctly from the pursuer who his employers were. Instead of making any sensible enquiry they lit upon an entry in a telephone directory as disclosing the name of his employer as being that of a limited company. They addressed a letter of claim to that company. In response the employer's liability insurers indicated plainly that their insured was the partnership which was in fact the sole trading entity. I was further informed that the word "limited" did not appear on the pursuer's pay slips. It was the solicitors' failure to note who was the correct defender at the early stage of the first reply from the insurers that caused the subsequent difficulties. I am not of the view that that mistake is such as could have been made without a failure to pay proper attention. It is of supreme importance in any action to sue the correct defender. There is a substantial difference between the constitution of a limited liability company and that of a partnership and it is, or may be, vital to both the pursuer and the defenders that the correct defender be convened into process.
9. In the present case, although it was as above noted faintly suggested, there is no question of the conduct on the part of the insurers deceiving the pursuer in relation to the raising of his action as plainly happened in McDyer v The Celtic Football Athletic Company Limited 1999 S.L.T. 2. I pay attention to the fact that in the present case the defenders do not claim any difficulty in investigation. The insurers were able to investigate the circumstances of the pursuer's accident at an early stage. On the other hand the pursuer did not sue his employers and a year and more elapsed after the expiry of the triennium until he attempted to do so. I do not regard it of significance that defences were lodged on the part of the limited company, erroneously sued as Stewart, a matter which would have required amendment in any event, nor do I regard it of compelling significance that the correct defenders, the partnership, will now have escaped any liability they may have had. I do not regard it as helpful to describe that situation as being "a windfall" benefit. The correct defender requires to be sued and it was the wrong legal persona which was convened as defender.
10. I would only add that it did not appear that the pursuer's present Edinburgh solicitors, nor indeed his previous Edinburgh solicitors, could be described as at fault in the events. There was a certain delay to which the court's attention was drawn by counsel for the defenders between the ascertainment of the error in about August 2000 and its purported correction in December 2000, but I would not have regarded that as of materiality.
11. The wrong defender was convened and there does not appear to me to be any excuse for that. It is not, in my view, equitable that a correct defender be substituted for an incorrect defender over four years after the accident, absent any good reason for that occurring. Given the failure to establish who the pursuer's employers were, after the clear indication from the insurers as to who their insured was, and given the fact that the pursuer's pay slips did not indicate that he was employed by a limited liability company, I am not persuaded that on the pursuer's averments there is pled an appropriate case to enable me to exercise my discretion in favour of allowing the action to proceed.
12. I will accordingly sustain the defenders' first and second pleas-in-law and dismiss the action.