EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Emslie	[2012] CSIH 60 XA92/12 OPINION OF LORD EMSLIE sitting as a Procedural Judge in the Appeal by ERIC McDERMID Pursuer and Appellant; against D & E MACKAY (CONTRACTORS) LTD Defenders and Respondents: _______

Pursuer: Laing; Digby Brown LLP

Defenders: Love; HBM Sayers

10 July 2012

Introduction

[1] On 16 March 2012, after having parted company with his solicitors, the pursuer failed to appear at a peremptory diet in the Sheriff Court at Peterhead. The sheriff granted decree against him by default, dismissing his personal injury claim and finding him liable to the defenders in expenses. In due course, after instructing fresh representation, the pursuer sought to appeal to the sheriff principal against that decision. However, his appeal was marked outwith the 14-day period prescribed under the Sheriff Court Ordinary Cause Rule ("OCR") 31.1, and a question arose as to whether it should be allowed to proceed. In the event, the issue was focused by the pursuer's own motion to allow his appeal to be received, although late. The defenders opposed that motion, and after hearing parties the sheriff principal on 23 April 2012 refused to exercise his discretion, under OCR 2.1, to relieve the pursuer of the ordinary consequences of his failure to comply with the relevant time limit.

[2] In this context, it is fair to say that the OCRs contain no express guidance as to how such issues should be brought before the court. However, with the much more informative Court of Session Rules in mind, it seems to me that exactly the same matter could have been focused by the defenders objecting to the competency of the appeal and moving for its dismissal. In response, the pursuer would no doubt have sought relief in terms of OCR 2.1, and the decision of the sheriff principal would, in substance and in reality, have been the same.

[3] The pursuer has now marked an appeal to the Court of Session against the sheriff principal's interlocutor of 23 April 2012. The short issue which I am asked to determine, pursuant to a formal objection tabled by the defenders, is whether this latest appeal is itself competent. On that matter, section 28 of the Sheriff Courts (Scotland) Act 1907, as amended, provides inter alia as follows:

"(1) Subject to the provisions of this Act, it shall be competent to appeal to the Court of Session against a judgment either of a sheriff principal or of a sheriff if the interlocutor appealed against is a final judgment; or is an interlocutor -

(a) Granting interim decree for payment of money...; or

(b) Sisting an action; or

(c) Refusing a reponing note; or

(d) Against which the sheriff principal or sheriff....grants leave to appeal.

..."

Similar, but perhaps less restricted, provisions govern appeals from the sheriff to the sheriff principal under section 27. Under section 3(h) of the Act, moreover, the phrase "final judgment" is defined as denoting an interlocutor which, by itself, or taken along with previous interlocutors, disposes of the subject matter of the cause. By contrast, the phrase "Refusing a reponing note" remains undefined.

The present appeal

[4] For the purposes of this appeal, it is common ground that the pursuer can only succeed if the decision of the sheriff principal was either a "final judgment" or the "refusal of a reponing note" within the meaning of section 28 of the Act. Otherwise, in the absence of leave, the appeal would admittedly fall to be dismissed as incompetent. Resolution of these issues involves an exercise of construing the relevant statutory provisions, as also an appreciation of the true nature of the proceedings which took place before the sheriff principal.

[5] Relying on a textual analysis of the statutory framework, counsel for the defenders contended that the pursuer's appeal fell into neither category and must therefore be dismissed. To begin with, the decision of the sheriff principal was not a "final judgment" as defined in section 3(h) of the Act, since it concerned only procedural matters and not the underlying subject-matter of the cause. That subject-matter had already been finally disposed of by the sheriff when the pursuer's whole action was dismissed on 16 March 2012. By contrast, the issues determined by the sheriff principal on 23 April 2012 were incidental or interlocutory, and even if the appeal was thereby brought to an end the statutory definition had not been met. This important distinction was vouched by the decision of Sheriff Principal Caplan in W Jack Baillie Associates v Kennedy 1985 SLT Sh Ct 53, esp. at p.56, and also by the decision of the First Division in the later case of Robertson v Robertson's Executor 1991 SC 21, esp. per Lord President Hope at p.23, and there was no reason why the ratio decidendi of these decisions should not apply equally to the present case. In both instances the ultimate appeal was held incompetent because the decision in the court below had been of a procedural rather than a substantive nature.

[6] Nor, in counsel's submission, had the sheriff principal here "refused a reponing note". Under the OCRs, the term "reponing note" was used only to denote the means of challenging a decree in absence pronounced against a defender who failed to enter appearance and/or lodge defences. It was not used in the context of challenging a decree by default, which could be pronounced against any party for a failure to comply with some imperative procedural requirement. A decree by default had to be the subject of a note of appeal, and although the purpose of such an appeal would be to have the recalcitrant party reponed, in the sense of being restored to his previous position, the relevant procedure was not in terms a "reponing note". Looking to the actual form and terms of the sheriff principal's decision here, it bore to concern (i) an appeal rather than a reponing note; and (ii) the refusal of a procedural motion in that connection. The pursuer's right to appeal had been lost once the 14-day time limit was exceeded; the competency of the appeal was not expressly addressed by the sheriff principal; and the decision plainly failed to qualify under section 28(1)(c) of the Act.

[7] On the pursuer's behalf, counsel sought to depart from an earlier concession that no "reponing note" had been involved. On reflection, he said, this concession was unsound, and his primary position was that the pursuer's appeal to the sheriff principal had indeed been a "reponing note" within the meaning of section 28(1)(c). As illustrated by passages from Maclaren, Court of Session Practice, at pp. 971-2 and 977, and Macphail, Sheriff Court Practice, 3^rd Ed., at paras 14.06, 14.14 and 14.15, appeals of this kind had for well over a century been recognised as the procedural mode by which a party might be reponed against a decree by default. The terminology of reponing was prominent in reported decisions such as McCarthy v Emery 1897 24 R 610, and shortly thereafter the reference to "refusing a reponing note" was introduced into section 28 by the Sheriff Courts (Scotland) Act 1913. It was of great significance that Maclaren, writing only three years later, clearly understood (at p.977) that this statutory innovation covered challenges to decrees by default as well as to decrees in absence. Nearly half a century after that, in Winning v Napier, Son & Company Limited 1963 SC 293, Lord President Clyde (at p.298) expressed the same view in these terms:

"Although in form the present application is a reclaiming motion it is in reality a reponing note. In its very nature a reponing note can only restore the defenders to the position in which they would have been on the morning of 20^th February 1962 when the Lord Ordinary pronounced decree against them by default. The present motion cannot be treated as an ordinary reclaiming motion appealing against an interlocutor in foro".

The pursuer's reliance on section 28(1)(c) in this case was thus soundly based and should be affirmed. The sheriff principal had indeed refused a reponing note on 23 April 2012.

[8] By way of what was now a fallback position, counsel maintained that the decision of the sheriff principal had been a "final judgment". It was the first and last decision at appellate level in the Sheriff Court; it had brought an end to the appeal which sought to re-open the merits of the pursuer's claim; in the process, the sheriff principal had in fact considered facts relevant to the appeal proper; and from a practical standpoint the pursuer's claim had received just as much attention from the sheriff principal as from the sheriff. Furthermore, cases like Baillie and Robertson could be distinguished because neither involved the start and finish of an appeal process. Of greater interest was the decision in McChristie v EMS Promotions Limited 1991 SLT 934, where the First Division sustained an appeal, without questioning its competency, in circumstances which appeared similar to the present. And it was not without significance that according to Maclaren, at p.971, an appeal to the Court of Session was always open, from the sheriff or sheriff principal alike, where a decree by default was in issue. Admittedly the general rule usually required a disposal of expenses in the Sheriff Court for "final judgment" purposes, but Macphail at para 18.87 vouched the proposition that if a final appellate judgment in the Sheriff Court was silent on expenses, there was deemed to have been a refusal to award them.

Decision

[9] As indicated at the conclusion of the hearing before me, I am persuaded that this appeal is competent and should be allowed to proceed. Notwithstanding the terms of the Sheriff Court Rules, the decision here turns on the wording of section 28 of the 1907 Act, as amended. The key reference to "refusing a reponing note" was introduced into that section by the Sheriff Courts (Scotland) Act 1913 following long-established practice whereby the terminology of reponing was used in appeals against decrees by default. Writing only three years after the relevant amendment was introduced, Maclaren clearly understood (at p.977) that it was apt to cover challenges to a decree by default as well as to a decree in absence. Although in form an appeal, the challenge was in reality a reponing note, and the very same view was expressed nearly fifty years later by the First Division (chaired by Lord President Clyde) in the Winning case at p.298 in particular. To my mind, nothing said on the defenders' behalf has been sufficient to cast doubt on these authorities, and in the circumstances I am satisfied that, in substance and reality, it was a reponing note which came before the sheriff principal in April of this year.

[10] Following on from that, the next question is whether the sheriff principal's decision was in substance and reality the refusal of a reponing note. Having weighed up the competing submissions before me, I have reached the conclusion that that question should be answered in the affirmative. By reference to OCR 31.1, the pursuer's appeal was plainly out of time, and in consequence incompetent, unless the sheriff principal's general dispensing power were to be exercised in his favour under OCR 2.1. In refusing to exercise that dispensing power, and relieve the pursuer of the ordinary consequences of his appeal being out of time, (namely dismissal of that appeal as incompetent), I consider that the sheriff principal was, in substance and reality, refusing the appeal on that basis. Up until that point, the appeal had been formally live in terms of OCR 31.4; unlike a minute of amendment, for example, it did not need to be "received" by the court to attain formal status; and the sheriff principal's decision was to my mind exactly the same, in substance and reality, as if he had upheld a challenge to the competency of the appeal at the defenders' instance. Incompetency was, in other words, the whole thrust of the defenders' argument in opposing the pursuer's motion. However expressed, therefore, it seems to me that what then transpired was a refusal of the pursuer's reponing note.

[11] For these reasons, I am persuaded that the pursuer's present appeal can properly be held to fall within the scope of section 28(1)(c) of the 1907 Act, as amended, namely an appeal against a decision "refusing a reponing note". It would in my view be an extraordinary situation if, on the defenders' contrary approach to section 28, a refusal to repone against a decree in absence was always appealable whereas, in the case of a decree by default, an identical refusal was not. I can think of no reason why Parliament in 1913 should have contemplated making a prejudicial distinction of that kind, and on the authorities quoted above I do not believe that Parliament did any such thing. Finding this appeal to be competent, therefore, I direct that it must now proceed as if the defenders' objection to competency had not been lodged.

[12] Had I been against the pursuer on the "reponing note" issue, I confess that I would have had much greater difficulty with his fallback position, namely that this was an appeal against a "final judgment" as that term is narrowly defined in section 3(h) of the 1907 Act. The main issue here is whether the proceedings before the sheriff principal did or did not dispose of the "subject-matter of the cause" within the scope of the statutory definition. On that matter, it seems to me that respectable arguments are available on both sides, not least the pursuer's contention that in disposing of the appeal the sheriff principal was dealing with the subject-matter of the cause to an extent no less than when the action was earlier dismissed by the sheriff. Moreover, as it seems to me, the decisions in Baillie, Robertson and McChristie are not necessarily easy to apply to the particular circumstances of this case, nor indeed to reconcile with one another. In the circumstances, and recognising that it is not necessary for me to come to a final conclusion on this aspect of the matter, I propose simply to reserve my opinion on the "final judgment" point.