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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 26
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A523/03
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OPINION OF
LORD DRUMMOND YOUNG
in the cause
PEACOCK GROUP PLC
Pursuers;
against
RAILSTON LIMITED
Defenders;
and
WILLIAM MURCHLAND
& CO
LIMITED
Third Party:
ญญญญญญญญญญญญญญญญญ________________
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Pursuers: Bowen; Simpson & Marwick
Defenders: Cowie; Balfour & Manson
Third Party: Haldane; Dundas & Wilson CS
9 February 2007
[1] The
pursuers have raised an action against the defenders in which they seek damages
of ฃ76,968 for breach of contract. The
pursuers' averments, in summary, are as follows. The pursuers carry on business as retailers
of clothing, footwear and leisurewear. They
occupy a unit in a shopping centre at Portland Gate in Kilmanock. In January 2000 they entered into a contract
with the defenders for certain shopfitting works at those premises. Part of the works consisted of plumbing,
which was subcontracted by the defenders to the third party. In the course of the works the third party
installed a particular type of connector between sections of plastic and copper
water pipe in the staff lavatory on the first floor. The fitting on the connector for attachment
to the copper pipe consisted of a rubber insert, a metal gripper ring with
teeth to grip the copper pipe, and a plastic spacer to keep the gripper ring in
position. The correct installation of
the connector on to the copper pipe requires that the fitting be tightened by a
wrench or similar hand tool. It is
averred that when installing the connector the third party failed to tighten
the fitting correctly. On 6 July 2001 the connector failed when it became detached from the
copper pipe. As a result water at mains
pressure escaped from the pipe and poured through the ceiling on to the ground
floor retail area. The building itself,
fixtures, fittings and stock were saturated.
It is averred that on examination after the flood the copper pipe had no
gripper ring marks where it had been in contact with the fitting for the
connector; had the fitting been tightened correctly by the third party the
copper pipe would have had such marks to indicate that the gripper ring was in
full contact with the pipe. The pursuers
rely on an implied term in their contract with the defenders that the defenders
would use the skill and care reasonably to be expected of shopfitters of
ordinary competence, and allege a breach of that duty as a result of defective
work by the third party.
[2] The
defenders deny the pursuers' averments, but make an esto case that, if the plumbing work was installed as averred by
the pursuers, the third parties were at fault.
Averments of fault are made against the third party which broadly
correspond to those made by the pursuers against the defenders. The third party denies that it was at
fault. It avers that the plumbing work
was performed over a period of seven to ten days in August 2001, eleven months
prior to the flood. The connector that
was installed was a particular form of compression stop tap, which was
approximately 25 mm in diameter. It is
said that the manufacturer's instructions for the installation of fittings
between 16 and 50 mm did not require the use of a wrench. The third party followed the manufacturer's
instructions. Even if that were wrong,
however, the failure would have been obvious when the water main was turned on,
as the stop tap would have leaked immediately or within 24 hours at the
most. It is said that a wrongly
installed stop tap could not have withheld water pressure for eleven months
after installation before failing.
[3] The
summons was signetted in February 2003.
On 8 July 2003 three productions, nos. 6/1
to 6/3 of process, were lodged on behalf of the pursuers. These comprised a section of copper pipe, the
pipe joint fitting recovered from the pursuers' premises, and a new pipe
fitting kit. It is obvious from the
pleadings alone that the section of copper pipe and pipe joint fitting were
important items of real evidence. According
to the inventory of process those productions were borrowed out of process on 11 November 2003; the relative receipt indicated the borrower as the
pursuers' agents. Since then the
productions have not been returned to process, and attempts to find them, by
the pursuers' agents in particular, have been unsuccessful.
[4] Prior
to the disappearance of the productions the pursuers' agents had commissioned
an expert report from Burgoynes, consulting engineers. The representatives of Burgoynes who prepared
the report had access to the productions and took photographs of them, and the
report proceeded to a significant extent on the basis of the state of the pipe
and fitting. Thus the report includes,
at paragraph 4.2, a section headed "Detailed inspection of the incident parts";
this section describes the pipe and fitting.
In that section it is noted that testing showed that a correctly formed
joint would create pronounced marks on the copper pipe, where the gripper ring
teeth "bite". It is further noted that
no such marks were present on the incident copper pipe. Nor was there evidence of gouges or other
damage where a gripper ring had been pulled from the pipe end. Photographs of the pipe and fitting are
appended to the report. The writer of
the report, Mr. DJ Pointon, noted at paragraph 6.2:
"I have also considered the
situation if the fitting handed to me [the production] was the one which
failed. If this is the case, then I am
satisfied that the incident has been the result of an inadequately tightened
joint pulling apart.
... [T]he physical evidence
indicates that a gripper ring has never been in full contact with the pipe, as
would occur if a gripper ring was present and the joint was fully
tightened. This indicates that the joint
has never been adequately tightened and essentially just fell apart, possibly
due to fluctuations in water pressure and other normal vibrations on the
system."
That point is repeated in the summary at the end of
the report.
[5] In due
course a diet of proof was fixed. It was
then noticed that the productions lodged on 8 July
2003
were not in process, and the third party enrolled a motion to ordain the
pursuers to make the productions available within 14 days. That motion was granted, but the productions
were not found. This was explained to
the court at a by order hearing that had been fixed when the third party's
motion was granted. Thereafter the third
party enrolled a motion for decree of absolvitor in their favour in respect
that the third party required to examine the pipe fitting and that the pipe
fitting, having been borrowed from process by the pursuers' agents, could not be
located. That motion was opposed by both
the pursuers and the defenders, but the defenders enrolled a further motion for
decree of absolvitor in their own favour.
The pursuers also enrolled a motion for summary decree on the basis that
no defence to the action was contained within the defences. When the motions came before the court I was
addressed at some length on the legal issues that arose following the
disappearance of the productions. It
became clear, however, that there was considerable doubt as to the
circumstances surrounding the borrowing out of the productions; the pursuers'
agents had been unable to identify the signature that appeared on the inventory
of productions. I took the view that the
circumstances surrounding the borrowing out of the production were potentially
important, and that it was premature to reach a decision on the parties'
motions without further investigation into the circumstances. For this reason I allowed the parties a
preliminary proof to examine the circumstances surrounding the apparent
borrowing out of productions numbers 6/1 to 6/3 of process on 11 November 2003. At the same
time the pursuers were appointed to lodge a note of their position in relation
to the matters assigned to the preliminary proof, and the defenders and third
party were permitted to lodge answers to such note, if so advised. All of the parties' motions were dropped.
[6] A note
and answers were lodged in due course, and the preliminary proof proceeded on
the basis of the statements in those documents, subject to one major
modification. This occurred because
further investigations had been carried out by the pursuer's agents into the
disappearance of the productions. The
result of those investigations was set out in a letter written by the pursuers'
agents to the third party's agents, a copy of which was lodged in process. The first three paragraphs of that letter
contained a full explanation of what had happened when the productions were
borrowed out; I should record that that explanation is commendably candid, and
credit should be given to the pursuers' agents for the manner in which they
investigated and recorded the matter.
All three parties agreed that the statement of the circumstances
surrounding the disappearance of the productions contained in the first three
paragraphs of the letter should be accepted as fact. Consequently it was unnecessary to lead any
evidence, and counsel's submissions proceeded on the basis of the facts stated
in the letter. In summary, the critical
feature of the letter was that the pursuers' agents accepted that they were
responsible for borrowing out the productions nos. 6/1 to 6/3 of process; and
an explanation was given for the signature that appeared on the borrowing
receipt.
[7] It was
clear that the condition of the pipe and fitting was critical to the pursuers'
case; this was apparent from the terms of their expert report, and indeed from
the pleadings themselves. It was
accordingly essential for the pursuers to establish that condition by leading
appropriate evidence. The original pipe
and fitting were not now available because of the disappearance of the
productions nos. 6/1 to 6/3 of process.
Consequently the crucial question was whether, despite the disappearance
of the productions, the pursuers should be entitled to lead secondary evidence
of the condition of the pipe and fitting. The pipe and fitting were described in the
pursuers' expert report in the manner described at paragraph [4] above. They had also been examined by an expert
instructed by the defenders, and I was informed that that expert had prepared a
report; that report had not been lodged in process. The pipe and fitting had not, however, been
examined prior to their disappearance by any expert instructed on behalf of the
third party.
Submissions
[8] For
the third party it was contended that the pipe and fitting were essential. The third party had not obtained an expert
report before the productions went missing; because it was the party ultimately
blamed for the failure of the pipe, however, it was vital that the third party
should have such a report in order to have an opportunity of meeting the
pursuers' case. To obtain a proper
report, it was essential that the expert instructed should be able to examine
the productions; without examination of such productions the third party would
be unable to test the pursuers' case.
Reference was made to authorities, notably Scottish and Universal Newspapers Ltd. v Gherson's Trustees, 1987 SC 27; Levison v Jewish Chronicle
Ltd., 1924 SLT 755, and McGowan v Belling & Co. Ltd., 1983 SLT 77
were also cited. In the present case the
pursuers, through their agents, had been responsible for the productions when
they disappeared. Moreover, serious
prejudice was caused to the third party by the disappearance of the
productions. For these reasons counsel
submitted that the third party was entitled to absolvitor. The defenders' position was that, if the
third party was entitled to absolvitor because of the loss of the productions,
the defenders were also entitled to absolvitor.
The defenders sought to blame the third party for any failure that might
have occurred in the pipe; consequently they were liable to be prejudiced if
the third party escaped liability. Thus
the defenders and the third party stood together, and counsel adopted the
submissions for the third party.
[9] For
the pursuers it was submitted that the court should allow three named
witnesses, all representatives of Burgoynes, to give evidence regarding the
condition of the pipe and fitting. One
of those witnesses, Mr. Graham Cooper, had examined the pipe and fitting, and
the results of his examination were set out in Burgoynes' report. In addition, the report contained two
photographs of a new set of components, laid out to illustrate their
positions. No photographs were available
of the copper pipe, but Mr. Cooper's evidence would be available as to the
state of the pipe. In particular, Mr.
Cooper would be able to give evidence regarding the lack of marks on the copper
pipe. Counsel accepted that the presence
or absence of "bite" marks on that pipe was crucial to this part of the
evidence. He further submitted that initially
all proper steps had been taken to preserve the joint and pipe; they had been
taken from the premises by Burgoynes, and sent on by Burgoynes to the pursuers'
agents. Thereafter they had been lodged
as productions. Counsel submitted that
the fact that they had been lodged was an important distinction from Scottish and Universal Newspapers v Gherson's Trustees, supra; in that
case, the pursuers had failed to lodge the relevant financial documents, which
had accordingly never been in process. Where
productions were lodged, and had been examined, their importance became less,
and the loss of the productions would accordingly be less culpable. In the present case the defenders had been
able to make use of the productions and have them examined by their own
expert. Thus evidence would be available
from the defenders' expert, and the third party could rely on such evidence;
there was a unity of interest in the positions of the defenders and the third
party. The pursuers' secondary position
was that, even if secondary evidence regarding the productions was excluded, a
proof should still be allowed. The
pursuers did not concede that they would not be able to establish their case
without evidence of the state of the pipe and fitting, and an alternative basis
might exist for that case. Finally,
counsel for the pursuers submitted that, even if a proof were refused, the
interlocutor should be dismissal rather than absolvitor. The pursuers might obtain further information
regarding the case at a later stage, or the missing productions might be
discovered.
Discussion
[10] The
legal principles that are relevant to the present case are in my opinion set
out by LP Emslie in Scottish and
Universal Newspapers Ltd. v Gherson's
Trustees, supra, at 1987 SC 47:
"From these passages [in
Dickson on Evidence] I take the true rule applicable to a case such as this to
be that secondary evidence of the contents of the missing records will be
admitted only if it is shown that they have been destroyed or lost without
fault on the part of the pursuers who had effective control of the records when
the action began. A party in the
position of the pursuers indeed will, according to Dickson, sec. 237, probably
be required to show a special casus
amissionis not attributable to any fault on his part. It must be recognized accordingly that the
leading of secondary evidence to prove the contents of missing documents - a
manifestly unsatisfactory expedient - is a privilege to be earned by a party in
the position of the pursuers in this case."
The opinion of Lord Brand is to similar effect (at
1987 SC 53):
"The best evidence rule is,
in my opinion, clear and simple: 'a party must adduce the best attainable
evidence of the facts he means to prove' (see Dickson, sec.195). Where the terms of a document are in issue
the best evidence rule normally demands that the document itself, as the
primary evidence, should be produced.
Secondary evidence is, however, admitted to prove the contents of
documents which had been destroyed or lost without fault in the party founding
on them (see Dickson, sec. 236)."
Scottish and Universal
Newspapers Ltd. v Gherson's Trustees involved
the loss of documents, but in my opinion it is clear that identical principles
must apply to the loss of non-documentary productions; items of real evidence
may indeed be of even more fundamental importance to proving a case than items
of documentary evidence.
[11] The
meaning of fault for the purposes of the best evidence rule was also considered
in Scottish and Universal Newspapers Ltd.
v Gherson's Trustees. On this matter, the Lord President stated (at
1987 SC 47):
"There is no difficulty in
interpreting the word 'fault' in this context.
It simply means failure in a duty to take all proper steps or to use all
due diligence to see that these records were preserved and remained accessible
for use in the proof ... It must, I
think, depend on the circumstances of each case whether the party tendering the
secondary evidence has expended the appropriate amount of care and diligence,
and the steps required of such a party will no doubt be affected by the nature
and importance of the documents, the contents of which are of vital importance
in the proof, to the ascertainment of the truth, and to the interests of all
parties. The more important the
documents the more necessary will it be for the party who has them to take all
proper steps to preserve them."
The prejudice caused by the failure to produced
documents is relevant in the following manner (1987 SC 47-48):
"I accept... that the
leading of secondary evidence of the contents of documents cannot be
incompetent merely because the absence of the documents themselves will gravely
prejudice the opponents in the litigation.
To say, however, that the question of prejudice has no role to play in
deciding upon the admissibility of secondary evidence of the contents of
documents is to go too far. In my
opinion ... it is entirely relevant in ascertaining the importance of the
documents in the litigation to consider to what extent their absence will
obviously prejudice the other parties.
The greater the obvious prejudice which would be occasioned by the loss
of the documents the more necessary will it be for the party who controls the
documents to take whatever steps are required to see that they are not lost."
[12] When
the foregoing principles are applied to the facts of the present case, I am of
opinion that secondary evidence as to the state of the pipe and pipe joint
fitting should not be permitted. For the
reasons stated above, I consider it very clear that the condition of the pipe
and fitting was of fundamental importance to the pursuers' case. The
productions were accordingly vital pieces of real evidence. The pipe and fittings were lodged in process
at a fairly early stage in the action, but some months later they were borrowed
out of process by the pursuers' agents and went missing while in the hands of
the pursuers' agents. Prima facie, therefore, the pursuers'
representatives were responsible for the loss, and there was no suggestion that
any other person was responsible, or that the cause of the loss was something
outwith the control of the pursuers or their representatives. The pipe and fitting had been examined by the
pursuers' experts and also by an expert for the defenders, but they had not
been examined by any expert acting on behalf of the third party. It is clear from the pleadings that the
position of both the pursuers and the defenders is to blame the third party for
the condition of the pipe, the defenders on an esto basis. In these
circumstances it seems to me to be manifestly unsatisfactory, and indeed
unfair, to expect the third party to rely in any way on the defenders' expert
report; that report was not prepared on their behalf, and the author cannot
have been expected to take the third party's interests into account by, for
example, considering lines of inquiry that might help to exonerate them.
[13] In such
circumstances the applicable rule of law is that laid down by the First
Division in Scottish and Universal
Newspapers Ltd. v Gherson's Trustees,
supra: if secondary evidence is to be admitted it must be shown that
productions have been destroyed or lost without fault of the party who had
effective control of the productions.
"Fault" for this purpose means a failure to take all proper steps or to
use all due diligence to ensure that productions are preserved and remain
accessible for use at a proof. The
appropriate standard of care and diligence varies according to the
circumstances, but where productions are of particular importance in
establishing the facts of the case a high standard will apply. Similarly, where the loss of a production is
liable to cause significant prejudice to the other party, a high standard will
be demanded. In the present case, the
productions that it be lost were of critical importance, and the third party is
manifestly prejudiced. In these
circumstances a high standard of care and diligence applies. When productions go missing in the hands of a
party's representatives without any explanation, I consider it clear that that
level of care and diligence is lacking.
I am accordingly of opinion that the pursuers have failed to establish
that the productions have been lost without fault on their part, and secondary
evidence is not admissible.
[14] Counsel
for the pursuers submitted that the present case was distinguishable from Scottish and Universal Newspapers Ltd. v Gherson's Trustee because the productions
have been lodged in process and have only been lost subsequently. That is true, but in my opinion it does not
affect the result. The productions were
still lost through the fault of the pursuers' representatives, and the
prejudice to the third party is exactly the same. The result might have been different if an
expert instructed by the third party had had an opportunity to examine the
productions before they went missing, but that did not happen, and it cannot be
contended that the third party was in any way at fault in not having the
productions so examined.
[15] Counsel
for the pursuers also contended that at a proof on the merits the court could
rely on the evidence of the representatives of Burgoynes who had examined the
pipe and fitting and on the photographs that they had taken: see paragraph [9]
above. That is no doubt true up to a
point, but the fundamental problem remains that the productions, which are
themselves of fundamental importance to the case, have not been examined by any
expert acting for the third party; consequently the evidence about their
condition is likely to be one-sided.
Indeed, unless representatives of the third party are able to examine
the productions, it is very difficult to see how any effective
cross-examination could be mounted on the basic condition of the pipe and
fitting. That seems to me to cause
insurmountable prejudice to the third party.
[16] For the
pursuers a secondary argument was advanced that a proof should be allowed even
if secondary evidence regarding the productions was excluded. That argument proceeded on the hypothesis
that the pursuers might be able to establish a case without evidence of the
state of the pipe and fitting. The
difficulty with that contention, however, is that the case that is presently
made for the pursuers on record is firmly based on the condition of the pipe as
observed by Burgoynes. Thus the pursuers
aver:
"On examination after the
flood the copper pipe had no gripper ring marks where it had been in contact
with the fitting for the connector. Had
the fitting been tightened correctly by [the third party] the copper pipe would
have had such marks to indicate that the gripper ring was in full contact with
the pipe."
Those averments are said to yield the inference that
the third party had failed to tighten the fitting to an adequate standard and
that that failure was the cause of the flood.
In these circumstances it seems to me that it would not be appropriate
to allow the pursuers' case to go to proof to discover whether they could
establish it by an alternative route. If
that course is to be followed, the alternative case should be made squarely on
record, and there should be no significant reference to the observed condition
of the pipe.
[17] At the
conclusion of the proof the defenders and the third party moved for decree of
absolvitor in the event that I decided not to allow secondary evidence as to
the condition of the pipe and fitting.
In my opinion that is going too far.
It is true that a decree of absolvitor was pronounced in Scottish and Universal Newspapers Ltd. v Gherson's Trustees, but that followed
the conclusion of a proof on the merits, not a preliminary proof; moreover, it
was a matter of concession in that case that without secondary evidence of the
missing documents the pursuers were unable to prove their case against the
defenders. In the present case I cannot
at this stage conclude that the pursuers have no possible case; all that I can
do is to rule that secondary evidence of the state of the missing productions
will not be admissible. In these
circumstances I am of opinion that the correct disposal of the case is to grant
decree of dismissal; that reflects the fact that the pursuers' present case is
dependent on evidence of the state of the pipe and fitting but will allow them
to make an alternative case if they think fit.
