Scottish Court of Session Decisions

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2016] CSIH 27

CA133/12

 

Lord Brodie

Lady Clark of Calton

Lord McGhie

OPINION OF LORD BRODIE

in the cause

 

MACROBERTS LLP

Pursuers and respondents;

against

MCCRINDLE GROUP LIMITED

Defenders and reclaimers:

Pursuers and respondents:  Jones, Sol Adv;  bto

Defenders and reclaimers:  McIlvride QC;  TLT Solicitors

28 April 2016

Introduction

[1]        The pursuers and respondents (“the pursuers”) are a limited liability partnership carrying on business as solicitors.  Between 20 May 2002 and 6 September 2012, when their instructions were withdrawn, they acted for the defenders and reclaimers (“MGL”), a mechanical engineering and contracting company.  From May 2003 the pursuers acted for MGL in relation to disputes with MGL’s former solicitors, Maclay Murray & Spens (“MMS”), the Law Society of Scotland and the Faculty of Advocates.  The work in relation to the dispute with MMS included the raising and pursuing of a commercial action for damages for breach of contract and professional negligence which came before Lord Hodge for proof on 27 November 2012.  In the present action the pursuers sue for unpaid fees and outlays in respect of work in relation to that action against MMS and also in relation to the matter concerning the Law Society.  The sums sued for amount in total to £104,065.57. 

[2]        In their defence to the action MGL take no issue with the fact that the pursuers did work on their behalf or that the fees sued for have been properly quantified.  However, MGL contend that no fees are due to the pursuers as they were in material breach of their contract to provide professional services.  If that is not correct, MGL contend that they are in any event entitled to retain what they would otherwise be due to pay against their claim for damages made by way of counterclaim.  MGL counterclaims (i) for damages consisting of expense incurred as a consequence of having had to engage a new firm of solicitors shortly before the proof in the action against MMS and (ii) for fees paid to the pursuers for work that would not have been required if the breach of contract had not occurred.  These sums are stated to amount to £72,000. 

[3]        The action came before the Lord Ordinary, Lord Tyre, sitting as a commercial judge, for proof on all issues other than those relating to quantification of fees and damages.  Having heard proof, as is explained in his opinion of 10 June 2014, the Lord Ordinary found the pursuers entitled to payment of their fees.  In so doing he repelled MGL’s plea that the pursuers were not entitled to insist upon performance by MGL because of the pursuers’ material breach.  He assoilzied the pursuers from the conclusions of the counterclaim.  The defenders have reclaimed.

[4]        In introducing the reclaiming motion on behalf of MGL Mr McIlvride QC explained that it raised two critical issues:  (1) whether the Lord Ordinary had erred in law in failing to hold that the pursuers had materially breached their contract by placing themselves in a position in which their interests conflicted or might conflict with those of MGL;  and (2) whether, in the event that the Lord Ordinary had erred in that respect, that this court should hold in consequence that the pursuers were disabled from seeking to enforce the obligation which would otherwise have been incumbent upon them to pay the pursuers their fees.  

[5]        Before going further it is convenient to set out some of the history of the present dispute.  It falls into two chapters:  first, the arbitration between MGL and Haden Young Limited (in which MGL were represented first by MMS and then by the pursuers);  and second, the action at the instance of MGL against MMS (in which MGL were represented first by the pursuers and then by TLT LLP). 

 

The arbitration between MGL and Haden Young Limited
[6]        As the Lord Ordinary observes at the beginning of his opinion, the genesis of the present action was a contractual dispute between MGL and a company called Haden Young Limited (“HYL”), which was referred to arbitration in 1992 and which continued until 2004 when it was brought to an end by an agreed settlement.  The importance of the arbitration is that its conduct at an early stage gave rise to a claim at the instance of MGL against MMS for professional negligence in that in circumstances where power had not been conferred on the arbiter to award interest for the period prior to the making of his award (“retrospective interest”), MMS had failed to protect that element of the MGL claim by raising and then sisting an action in court (a “protective action”).  Lord Tyre’s findings as to the history of the arbitration are set out in his opinion at paragraphs [5] to [16].  They are not subject to challenge in the reclaiming motion and I reproduce them in summary here. 

[7]        For most of the duration of the arbitration MGL were represented by MMS.  However, on 20 May 2002 MGL transferred its instructions from MMS to the pursuers.  As had been the case when MMS were their solicitors, MGL’s instructions were given by their managing director, Mr William McCrindle MBE.  The partner of the pursuers principally responsible for carrying out these instructions was Mr Richard Barrie. 

[8]        On accepting instruction, Mr Barrie identified the difficulty for MGL in obtaining the full value of their claim against HYL by recovering retrospective interest;  it appeared to him that the arbiter had no power to award interest for the period prior to the date of any decree arbitral, and no protective action had been raised.  Given the size of the principal sum sought by MGL and the length of time that had elapsed since the dispute had been referred to arbitration, this was a matter of some importance.  Mr Barrie advised Mr McCrindle that if there had been no deed of submission conferring power to award interest upon the arbiter, and no protective court action, it was possible that any claim for interest had prescribed with a consequent diminution in the value of the claim.  

[9]        On 7 February 2003, Mr Barrie wrote on behalf of MGL to MMS intimating that a potential claim existed against MMS in respect of its failure to advise MGL during the early 1990s that they should raise a protective action.  On 27 February 2003 MMS advised Mr Barrie that the matter had been passed to their insurers who had instructed Mr Hugh Donald of Shepherd & Wedderburn.  Mr Barrie reported this information to Mr McCrindle. 

[10]      On 6 May 2003 an offer to settle was made by HYL but it was not at a level that was acceptable to MGL.  By 27 May, there had been further direct discussions between Mr McCrindle and a representative of HYL, in the course of which an increased offer of £350,000, inclusive of expenses, had been made.  Mr Barrie estimated that the element of expenses within that offer would amount to around £100,000.  As HYL were entirely alive to the arbiter’s lack of power to award interest, their offer accordingly valued the element of principal at £250,000.  On 27 May Mr Barrie reported this offer by telephone to Mr Donald.  The purpose of the call was to attempt to ascertain whether MMS’s insurers would compensate MGL for the loss of interest on that principal sum.  Interest at that time would have amounted to around 120 per cent of the principal sum.  Mr Donald indicated that the insurers would not be willing to pay such a sum. 

[11]      On 29 May 2003 a further attempt was made to settle the arbitration.  Parties and their representatives met.  This meeting was to assume importance (in his opinion of 14 May 2013 following proof in the action at the instance of MGL against MMS, Lord Hodge described this settlement negotiation as having been placed at the centre of MGL’s claim).  Although he heard evidence as to the figure at which Mr McCrindle was prepared to settle Lord Tyre did not find it necessary to make any finding on this.  What he did find was that Mr McCrindle made it clear to Mr Barrie that he was not willing to settle his claim against HYL without ascertaining the insurers’ position regarding interest.  Both Mr McCrindle and Mr Barrie remained concerned that there might be a basis upon which the insurers could argue that there had been an entitlement to interest which ought to have been pursued against HYL and taken into account in reaching any settlement, and which could not therefore be recovered from MMS as damages consequent on negligence.  Mr McCrindle asked Mr Barrie to guarantee that he would recover interest from MMS’s insurers but Mr Barrie refused to give any such guarantee.  Mr McCrindle and Mr Barrie explained their difficulty to the HYL representatives who in turn made no concession of liability to pay interest.  The meeting came to an end without a settlement having been achieved. 

[12]      On 30 May 2003 Mr McCrindle and Mr Barrie had a consultation with Mr James McNeill QC (instructed only in relation to the question of the arbiter’s powers) who confirmed advice previously given in his opinion of 17 January 2003 that the arbiter had no power to award retrospective interest. 

[13]      On 14 July 2003 Mr McCrindle wrote to Mr Barrie stating his position that a final agreement could not be concluded with HYL until MMS and Shepherd & Wedderburn either conceded that the arbiter had no power to award interest or demonstrated otherwise, and that it was therefore imperative to get a formal response on the question of retrospective interest. 

[14]      The concession looked for by Mr McCrindle was only made by Shepherd & Wedderburn on 2 October 2003.  There was a meeting between Mr Barrie and Mr Donald of Shepherd & Wedderburn on 9 October.  Shortly thereafter, on 13 October 2003, Mr Donald made an offer to settle the claim by MGL against MMS in respect of their failure to protect the interest claim.  Mr Donald’s figure was not acceptable to Mr McCrindle. 

[15]      Also in October 2003 Mr Barrie, on behalf of MGL, made an offer to settle the arbitration.  The proposal was not accepted by HYL.  The arbitration continued and was ultimately settled on 3 June 2004, when MGL accepted an offer from Haden Young of £90,000 plus VAT, with a finding of no expenses due to or by either party, and an agreement that the parties would not enforce awards of expenses made in the course of the arbitration. 

 

MGL’s action against MMS
[16]      In 2005 MGL raised an action for damages against MMS in the Court of Session.  The pursuers were instructed and acted on their behalf.  The action was thereafter sisted for mediation.  The sist was recalled in January 2011 and the cause appointed to the commercial roll.  Proof was fixed to commence on 27 November 2012 with a duration of four weeks.  The pursuers continued to be instructed as MGL’s agents until 6 September 2012.  Mr Laurence Murphy QC and Mr Kenneth McBrearty were instructed as counsel. 

[17]      The Lord Ordinary’s account of MGL’s action against MMS is to be found in paragraphs [17] to [27] of his opinion.  There he summarises the basis of MGL’s action against MMS as a contention that MMS had been negligent and in breach of contract in two respects.  The first was in failing (a) to advise MGL that it was necessary to raise court proceedings in order to protect MGL’s right to pre-decree interest, and (b) to raise such proceedings within the prescriptive period.  The second was in failing, during the period when they remained instructed by MGL, i.e. until 20 May 2002, to advise MGL that it had no entitlement to recover pre-decree interest from HYL because any obligation to pay pre‑decree interest had prescribed.  By the time of the recall of the sist in 2011, MMS had admitted negligence and breach of contract in respect of the first but not the second of MGL’s two complaints.  The loss that MGL claimed to have sustained consisted of a number of elements, including (i) the difference between the settlement figure that would have been achieved if the arbitration had settled on 29 May 2003 and the figure ultimately obtained (£346,000);  (ii) pre-decree interest on the “award” element of the settlement which would have been achieved on 29 May 2003 (£515,542);  and (iii) judicial interest on the settlement figure which ought to have been achieved, from 29 May 2003 until the date when the actual settlement figure was received (£38,084).  MMS denied that there was a causal link between their negligence and breach of contract and any loss allegedly sustained by MGL.

[18]      As the Lord Ordinary goes on to explain, MGL’s claim against MMS was accordingly dependent upon proving that MMS’s second alleged breach of duty caused MGL to fail to obtain a more favourable settlement on or about 29 May 2003 than that which it eventually achieved.  Evidence of what had been said at the abortive settlement meeting on 29 May 2003 was clearly of critical importance, as was evidence of what Mr McCrindle would have been prepared to accept.  A commission at the instance of MMS to recover documents in the pursuers’ possession “relating to the conduct of the arbitration and bearing upon the terms of the settlement ultimately arrived at” was arranged to take place on 9 May 2012.  Mr Barrie was cited as a haver.  In the course of the commission, Mr Barrie indicated that the pursuers’ hard copy files relating to the arbitration had been electronically scanned and then destroyed when the firm moved to new office premises, and that documents produced in response to MMS’s specification of documents comprised copies of scanned files.  When it was explained to him that the documents produced from the scanned files included no notes of meetings from his files and he was asked whether such documents had existed in the past, Mr Barrie answered:  “Yes, I definitely took notes of meetings, yes”.  Asked where such notes might be found other than with Mr McCrindle or in his files, he responded:  “There would have been notes taken in hardback jotters that I kept at the time.”  He indicated that these documents, whose contents would have included his notes of many days’ evidence in the arbitration proceedings, had been destroyed about two years previously. 

[19]      Another aspect of preparation for the proof was the recovery under a specification of documents of Shepherd & Wedderburn’s correspondence files covering the period following intimation by MMS to their insurers of a possible claim by MGL.  By this time it had become clear that Mr Barrie would be required to give evidence as a witness on behalf of MGL, and the day-to-day conduct of the action had been taken over by Mr Craig Turnbull, the pursuers’ managing partner, assisted by Ms Gillian Craig, a partner specialising in commercial litigation.  A consultation with Mr Murphy and Mr McBrearty was arranged for 21 June 2012 to review preparations for the proof.  Prior to the consultation, Mr Murphy had been advised by Mr McBrearty, who had attended the commission, that Mr Barrie’s notes and notebooks in relation to the arbitration had been destroyed and that no copies were available.  Mr Murphy was concerned that this might give rise to adverse judicial comment.  On the evening prior to the consultation, Mr Murphy had also read the Shepherd & Wedderburn file, including a file note by Mr Donald recording his telephone conversation with Mr Barrie on 27 May 2003.  Mr Murphy was concerned that the note suggested that Mr Barrie might have been discussing settling the arbitration at £250,000.  This did not appear to support Mr McCrindle’s position that an offer of £350,000 had been made at that time.  Another of Mr Donald’s file entries, this time of his meeting with Mr Barrie on 9 October 2003, recorded Mr Barrie as having stated that an offer of £350,000 had been turned down; this too appeared to conflict with Mr McCrindle’s position in a draft witness statement that £350,000 would have been acceptable if MMS’s insurers had accepted liability for pre-decree interest. 

[20]      The consultation on 21 June 2012 was attended by Mr Murphy, Mr McBrearty, Mr McCrindle, Ms Craig, and a junior colleague of Ms Craig who took detailed notes.  Mr Murphy expressed his concerns to Mr McCrindle.  The apparent lack of support for Mr McCrindle’s position in the evidence as to Mr Barrie’s discussions with Mr Donald created a difficulty in that the judge might not accept Mr McCrindle’s evidence as credible and reliable.  The situation was made worse by the destruction of the pursuers’ files.  If Mr Barrie had made notes of the crucial meeting which had then been destroyed at a time when the matter was litigious, that might put Mr Barrie in a difficult position.  Mr Murphy advised Mr McCrindle that there was a potential conflict of interest between his own best interests and those of the pursuers, which could crystallise into an actual conflict of interest in the course of the forthcoming proof. 

[21]      The Lord Ordinary describes Mr McCrindle as shocked and dismayed by this advice.  At first he was reluctant to accept that a conflict of interest might exist.  He was nevertheless advised by the pursuers that he should take independent legal advice.  Before he did so Mr Turnbull of the pursuers sent him a copy of the Shepherd & Wedderburn file which had been recovered under specification and which had been read by counsel, but not by Mr McCrindle, prior to the consultation with Mr Murphy on 21 June.  On reading it Mr McCrindle realised that, contrary to what had been suggested by Mr Murphy at the consultation, there was not in fact any conflict between his evidence and that of Mr Barrie because the figure of £250,000 mentioned by Mr Barrie to Mr Donald had been reached after making an allowance of £100,000 for the expenses element of an all-in offer of £350,000.  However, Mr McCrindle’s perusal of the Shepherd & Wedderburn file raised other concerns which appeared to him to be equally serious.  He formed the view that Mr Barrie had been engaging in discussion and conducting negotiations with Mr Donald without his knowledge or authorisation.  It was his evidence to the Lord Ordinary that he had been unaware of and had not authorised the telephone calls made by Mr Barrie to Mr Donald on 27 and 29 May 2003.  Nor did he at any time authorise Mr Barrie to attempt to negotiate a settlement of his claim against MMS with Mr Donald.  It was Mr McCrindle’s position that Mr Barrie’s instructions were expressly limited to attempting to ascertain the insurers’ position with regard to recovery of pre-award interest from Haden Young.  The file included a note made by Mr Donald of the meeting with Mr Barrie on 9 October 2003 in which an adverse comment about one of MGL’s expert witnesses is attributed to Mr Barrie.  Mr Barrie had not had authority to make that comment.  

[22]      On 17 August 2012 Mr McCrindle had a meeting with Mr John Sheridan, a partner of TLT LLP, who advised him that there was a conflict of interest between MGL and the pursuers in respect of (i) the absence of notes of the meeting on 29 May 2003 and (ii) Mr McCrindle’s strongly-held view that Mr Barrie had acted beyond the scope of his authority. 

[23]      On 6 September 2012, Mr McCrindle wrote to Mr Turnbull terminating the pursuers’ engagement on his behalf in the action against MMS.  He explained his decision by reference to what he understood to have been the destruction of Mr Barrie’s file notes and Mr Barrie’s having exceeded his authority in his negotiation with Mr Donald.  The letter included the following: 

“At first I resisted your combined advice as the consequences just appeared too awesome to bear.  However, following my detailed overview of the Shepherd & Wedderburn and Biggart Baillie files I realised that I had no option but to follow the advice of yourself, Gillian and indeed Counsel.

The destruction of Richard’s file notes was damaging enough, however, this paled into insignificance (at least from my point of view) with the discovery that Richard had been conducting a two-way dialogue with Hugh Donald and Murray Shaw during 2003; completely without my knowledge.  Furthermore, his strategy of trying to negotiate a financial settlement with Shepherd & Wedderburn was damaging in the extreme and totally outwith my instructions and knowledge.

...

Clearly this is a very sad day for me.  I have become very close to yourself, Richard, Gillian and many other employees of MacRoberts.  However, reluctantly, I believe I am much more likely to achieve a fully satisfactory settlement with the assistance of Mr Sheridan and his firm as opposed to MacRoberts, given the dramatic events during and since the Consultation of 21^st June 2012.”

[24]      Mr Sheridan took over the conduct of MGL’s action against MMS.  This required a considerable amount of work to be done in order for Mr Sheridan to familiarise himself with the case.  The diet of proof fixed for 27 November 2012 was, however, retained.  As at the date of commencement of that proof (before Lord Hodge) MMS had formally conceded that they had been negligent (i) in failing to raise protective proceedings or to advise MGL of the need to raise protective proceedings and (ii) having failed to do so, in failing up to the point of the termination of their instructions on 20 May 2002 to advise MGL that it was unable to recover retrospective interest from HYL. 

[25]      MGL’s claim against MMS was for the loss of the opportunity to settle its claim against HYL on more favourable terms than were eventually achieved.  As previously indicated, the focus of the MGL claim was the settlement negotiation which took place in the course of the arbitration between MGL and HYL on 29 May 2003.  Lord Hodge found that that was the date upon which parties came nearest to settlement prior to the eventual settlement in 2004.  Lord Hodge found that as at 29 May 2003 Mr McCrindle was keen to settle the arbitration if he could.  He further accepted Mr Barrie’s evidence that had they not been distracted by the retrospective interest issue HYL would have offered and Mr McCrindle would have accepted an all-inclusive sum of £400,000.  He accordingly concluded that MGL had proved that MMS's failings caused it to suffer the loss of its claim for pre-award interest (and damages) and also contributed to the failure of the negotiations to settle the arbitration on 29 May 2003, resulting in the loss of a chance of settlement on that occasion.  He awarded damages on both heads.  [26]     As an incidental matter Lord Hodge found that neither Mr Barrie nor anyone else took notes of the discussions at the settlement meeting on 29 May 2003.

 

The formulation of MGL’s claim to resist payment in the present action
[27]      As I have already indicated, MGL contend that no fees are due to the pursuers because they were in material breach of their contract to provide professional services, which is the contract on which the pursuers sue.  Alternatively, MGL contend that they are entitled to retain what they would otherwise be due against their claim for damages arising from the same breach.  Moreover, “[as] a result of the pursuers’ breach of contract and consequent inability to continue acting on [MGL’s] behalf” MGL counterclaim for damages quantified by reference to the additional costs associated with TLT doing the work necessary to become familiar with the action against MMS and the commission for the recovery of documents necessitated by the pursuers having failed to copy the whole content of Mr Barrie’s files. 

[28]      Given that MGL’s case turns on the proposition the pursuers were in material breach of contract, it is important to identify from the pleadings precisely why that is said to be so.  [29]           MGL admit that their contract with the pursuers was in part constituted by written Terms of Engagement but neither party makes anything of this. MGL found on what they say to have been implied terms of contract. At pages 14D to 15B of the reclaiming print they aver:

“The pursuers at all times held themselves out to be specialists in the conduct of litigation. It was an implied term of the contract with [MGL] under which the pursuers undertook to conduct litigation on their behalf that in doing so the pursuers would exercise the skill and care reasonably to be expected of an ordinarily competent solicitor professing expertise in the conduct of litigation. It was an implied term of the contract that in their conduct of litigation on [MGL’s] behalf the pursuers would act in accordance with [MGL’s] instructions. It was a further implied term of the contract that the pursuers would not in their conduct of the litigation on [MGL’s] behalf place themselves in a position where there was a real and sensible possibility of their interests conflicting with those of [MGL]. Each of those implied terms was a material term of the parties’ contract. The pursuers have breached each of those implied terms of their contract with [MGL].”

[30]      MGL go on to aver that for the purposes of the action against MMS they required to satisfy the court that had they been advised that they had no enforceable claim to retrospective interest they would have settled the arbitration with HYL on the terms which were available to them “in or around May 2003”.  At pages 16A to 17D there then follows: 

“In those circumstances [MGL] reasonably understood when preparing for the proof in the MMS action that evidence of the terms of discussions at meetings which took place in or around May 2003 were likely to be critical to the court’s determination of the claim against MMS. The only contemporaneous written record of those discussions was contained in the notes taken during that period by Mr Richard Barrie, a partner of the pursuers. At a consultation with senior and junior counsel on or about 21 June 2012 [MGL] discovered, as was the case, that the pursuers had in or around late 2010 shredded all files held by them relating to the arbitration. Scanned copies of the contents of the files had been retained but the scanned versions of the files contain no notes of any of the meetings attended by Mr Barrie. The pursuers have advised [MGL] that the notes of those discussions were contained in a notebook held by Mr Barrie but that the notebook was also destroyed at the same time as the files. On 9 May 2012 Mr Barrie was cited to attend a commission in the MMS action as a haver. He stated to the commissioner that he had taken notes of the meetings attended by him in the course of the arbitration. ...All of those notes, save for the note of one consultation, were destroyed by the pursuers. The pursuers accordingly in the course of acting for [MGL] in the MMS litigation destroyed the only contemporaneous written evidence of the discussions in 2003 which it would have been possible for [MGL] to adduce in support of their claim. They did not advise [MGL] that they intended to do so. In destroying the only contemporaneous written evidence without [MGL’s] consent the pursuers placed themselves in a position where there was a real and sensible possibility of their interests conflicting with those of [MGL] in the conduct of the MMS litigation.”

[31]      There are then averments to the effect that following the consultation on 21 June MGL discovered on reading copies of the Shepherd & Wedderburn files that Mr Barrie had proposed settlement figures for MGL’s claims against HYL for which he did not have authority, and then (at page 18C): 

“As a result of their actings the pursuers materially breached their contract with [MGL]. The pursuers’ obligation to exercise the skill and care reasonably to be expected of a solicitor professing expertise in the conduct of litigation et separatim to act in accordance with [MGL’s] instructions et separatim not to place themselves in a position where their interests conflicted with those of [MGL] was the counterpart of [MGL’s] obligation to make payment of the pursuers’ fees and outlays. The pursuers being in material breach of contract have no entitlement to insist upon performance of [MGL’s] obligation to make payment.”

 

The Lord Ordinary’s determination of the issues
[32]      The Lord Ordinary heard proof on all matters except quantification.  His findings are the basis of what I have set as being the history of the present dispute.  To make out their defence MGL had to persuade him, on the basis of the evidence that he had heard, that the pursuers were in material breach of their contract to provide professional services. 
[33]      Reflecting the averments which I have quoted, at paragraph [4] of his opinion the Lord Ordinary identifies the material breach of contract founded on by MGL as being in two respects: 

“(i) Firstly, it is contended that the pursuers, at a time when they were acting on behalf of MGL in its litigation against MMS, destroyed manuscript notes taken by Mr Richard Barrie, one of their partners, during a critical meeting on 29 May 2003.  Destruction of contemporaneous evidence of what had been said during the meeting, it is submitted, prejudiced the prosecution and quantification of the claim against MMS and accordingly created an actual or potential conflict of interest between the pursuers and their clients, MGL, so that MGL had no alternative but to withdraw its instructions and instruct new agents.

(ii) Secondly, it is contended that the pursuers’ Mr Barrie failed to act in accordance with the instructions that he had received from MGL’s managing director, Mr William McCrindle MBE, in respect that, without authority, he conducted certain settlement negotiations with agents acting on behalf of MMS’s professional indemnity insurers, and further failed to inform Mr McCrindle that such discussions had taken place.”

[34]      The Lord Ordinary addressed the evidence bearing on the two respects in which MGL said the pursuers had been in breach.  As far as the first was concerned, he noted that it had been agreed by joint minute that had Mr Barrie taken notes of the meeting of 29 May 2003 then the pursuers, had they been acting with the care and skill of the ordinarily competent solicitor, would have taken reasonable care to preserve them or copies of them pending resolution of “the dispute” (understood by the Lord Ordinary to mean the action against MMS).  He identified the sole issue therefore to be whether Mr Barrie took notes of what was said at the meeting on 29 May 2003.  The Lord Ordinary concluded that he did not.  Therefore MGL’s case, in so far as based upon destruction by the pursuer of notes taken by Mr Barrie, failed on the facts.  As far as the second respect was concerned the Lord Ordinary found that the pursuers were in breach of contract in that in the course of two telephone calls to Mr Donald he had sought an admission of liability by MMS’s insurers instead of an acknowledgement that the arbiter had no power to award retrospective interest.  However, in the Lord Ordinary’s opinion this was not a material breach.  Although MGL pled the implied term that the pursuers would act in accordance with MGL’s instructions as distinct from the further implied term that the pursuers would not place themselves in a position where there was a real and sensible possibility of their interests conflicting with those of MGL, at paragraph [43] of his opinion the Lord Ordinary considered whether the pursuers’ failure to act in accordance with Mr McCrindle’s instructions was such as to give rise to a conflict of interest.  He concluded that it did not.  Accordingly, the pursuers were not in material breach of contract when MGL terminated their retainer.  It followed that the pursuers were entitled to payment of their outstanding fees. 

 

The grounds of appeal
[35]      MGL’s grounds of appeal are in the following terms:

1.         The Lord Ordinary erred in law in:

(i)         sustaining the pursuers’ first plea-in-law and repelling the defenders’ third plea-in-law in the principal action, and assoilzing the pursuers from the conclusions of the counterclaim; and

(ii)        thereafter granting decree in favour of the pursuers in terms of the conclusions of the summons.

2.         He ought instead to have:

(i)         in the principal action, sustained the third plea-in-law for the defenders, repelled the pleas-in-law for the pursuers and assoilzied the defenders from the conclusions of the summons; and

(ii)        in the counterclaim, sustained the first plea-in-law for the defenders, repelled the pleas-in-law for the pursuers, and appointed the counterclaim to a proof on quantum.

3.         In particular, the Lord Ordinary erred in law in holding that because Mr Barrie of the pursuers had taken no notes of the meeting with HYL and their legal advisors which he and Mr McCrindle of the defenders had attended on 29 May 2003 in connection with the arbitration between the defenders and HY, the destruction by the pursuers of the other notes of meetings and consultations which he and Mr McCrindle had attended in or around May 2003 in connection with the arbitration did not place the pursuers in material breach of contract.

4.         The Lord Ordinary ought to have held that:

(i)         For the purposes of their action against Maclay Murray and Spens (“MMS”), the defenders required to satisfy the court that, had they been advised that they had no enforceable claim to interest for the period prior to any award made by the arbiter, they would have settled the arbitration proceedings on terms which were available to them in or around May 2003 or that there was a real or substantial chance that the arbitration would have settled on those terms; (ii) In those circumstances the defenders reasonably understood when preparing for the proof in the MMS action that evidence of the terms of discussions at meetings in connection with the arbitration which took place in or around May 2003 were likely to be critical to the court’s determination of the claim against MMS;

(iii)       The only contemporaneous written record of those discussions was contained in the notes taken during that period by Mr Richard Barrie, a partner of the pursuers.

(iv)      At a consultation with senior and junior counsel on or about 21 June 2012 the defenders discovered that the pursuers had in or around late 2010 shredded all files held by them relating to the arbitration. Scanned copies of the contents of the files had been retained but the scanned versions of the files contain no notes of any of the meetings attended by Mr Barrie and Mr McCrindle save for the note of one consultation with senior counsel.

(v)       The pursuers accordingly in the course of acting for the defenders in the MMS litigation destroyed the only contemporaneous written evidence of the discussions in 2003 which it would have been possible for the defenders to adduce in support of their claim. They did not advise the defenders they intended to do so. Nor did they obtain the consent of the defenders to the destruction of those documents.

(vi)      In destroying that evidence prior to the proof in the defenders’ action against MMS, the pursuers placed themselves in a position where there was a real and sensible possibility of their interests conflicting with those of the defenders in the further conduct of the MMS litigation notwithstanding that no notes had been made by Mr Barrie of the particular meeting with HYL which he and Mr McCrindle had attended on 29 May 2003;

(vii)     In consequence, the pursuers materially breached their contract with the defenders and are now disabled from seeking to enforce the defenders’ obligation to make payment of their fees; and (viii) The defenders are entitled to proof of their averments anent the loss sustained by them as a result of the pursuers’ breach of contract.

 

Submissions
MGL
[36]      Mr McIlvride adopted his written note of argument.  Set out there are four propositions on which MGL relied:  (i) the relationship between solicitor and client is one under which the solicitor owes fiduciary duties to his client:  Begg, Law Agents (2^nd edit) p294;  Paterson and Ritchie, Law, Practice and Conduct for Solicitors, pp134 and 135;  (ii) as a fiduciary, the solicitor owes a duty to his client not to place himself in a position where his interests conflict or possibly may conflict with the interests of his client, “possibly may conflict” being where there is a real sensible possibility of conflict”:  Boardman v Phipps [1967] 2 AC 46, Commonwealth Oil & Gas v Baxter 2010 SC 156;  (iii) a party to a contract is disabled from insisting on the performance otherwise incumbent upon the other party to the contract if the party has failed to perform the obligations incumbent upon himself which the counterpoint of the other party’s obligations:  Gloag, Contract (2^nd edit) p407;  Forster v Ferguson & Foster 2010 SLT 867;  (iv) it is to be presumed that the whole of the obligations on one side of the contract are the counterparts of the obligations on the other:  Forster. 

[37]      Mr McIilvride’s submissions reflected the terms of the grounds of appeal.  By destroying and not copying their notes of meetings the pursuers were in breach of contract by placing themselves in a position where their interests conflicted or possibly might conflict with the interests of MGL:  cf Phipps v Boardman at 124.  The conflict arose here because while a solicitor has the duty to represent his client forcefully, where he has destroyed some or all of the contents of his files he might be tempted to deny that there ever was a note of the meeting in question.  Destroying the file put the pursuers in breach of a fiduciary duty that arose from the relationship created by the retainer.  The Lord Ordinary had erred in placing weight on his finding that Mr Barrie had taken no notes at the meeting on 29 May 2003, in that when it came to the attention of counsel on or about 21 June 2012 that the pursuers had destroyed and not copied notes of meetings on or about 29 May 2003 it could not be known how the court in the action against MMS would react to the information that the only contemporaneous evidence of MGL’s attitude to settlement had been deliberately destroyed;  it might well draw an adverse inference.  Mr Barrie had said at commission that he had taken notes which were no longer in existence because they had been destroyed and not copied.  It was an error on the part of the Lord Ordinary to consider with the benefit of hindsight whether or not individual documents might have supported MGL’s position.  Whereas Lord Hodge eventually accepted Mr Barrie’s evidence without it being supported by any contemporaneous note, that could not be known at the time of the termination of the retainer.  The pursuers had not intended to peril their case before the Lord Ordinary on whether a note had or had not been made on 29 May 2003.  That should have been clear from the pursuers’ outline submissions which referred to “The ...notes ...are likely to have included notes made by Mr Barrie at a consultation with counsel on 30 May 2003 immediately following the important meeting on 29 May 2003”.  The Lord Ordinary had failed to appreciate the breadth of the pursuers’ case and in so doing had erred in law.  

[38]      Mr McIlvride proposed the following as additional findings of fact:  (1) that in the period round about May 2003 Mr Barrie had meetings with Mr McCrindle on a weekly and sometimes daily basis;  (2) that other than the note of one consultation all notes of meetings between Mr Barrie and Mr McCrindle and any other meetings or consultations were destroyed by the pursuers without scanning and retaining copies. 

 

The pursuers
[39]      On behalf of the pursuers Mr Jones moved the court to refuse the reclaiming motion and to adhere to the interlocutor of the Lord Ordinary.  He reminded the court, borrowing an expression used by the Lord Ordinary, that the genesis of this action was the consultation on 21 June 2012 when senior counsel, mistakenly, had understood there to be a divergence as between the recollection of Mr Barrie and Mr McCrindle as to what had been offered by HYL.  By the time of the termination of the retainer on 6 September 2012 that misunderstanding had been cleared up and Mr McCrindle’s concern over any conflict of interest had “paled into insignificance” in the face of what Mr McCrindle saw as a failure to carry out his instructions.  

[40]      Mr Jones turned to the supposed implied term of contract that the pursuers should not to place themselves in a position where their interests conflicted or possibly might conflict with the interests of MGL, as breached by the destruction of what is described as the contemporaneous notes of a critical discussion.  What was pled by MGL was breach of contract and not breach of a fiduciary duty, albeit the supposed contractual term which is said to have been breached is one that has all the aspects of a fiduciary duty.  Mr Jones drew the following propositions about fiduciary duties from Bristol and West Building Society v Mothew [1998] Ch 1:  simple carelessness cannot amount to a breach of fiduciary, the existence of a fiduciary relationship does not mean that every duty owed by a solicitor to his client is a fiduciary duty, a fiduciary duty has nothing to do with the vulnerability of the party to whom it is owed, breach of a fiduciary duty requires some degree of disloyalty or lack of fidelity, and mere incompetence is not enough for a breach of a fiduciary duty.  

[41]      It was Mr Jones’s submission that MGL’s case was tied to the destruction of contemporaneous notes of “discussions at meetings which took place in or around May 2003” which “were likely to be critical to the court’s determination of the claim against MMS”.  That is what was pled and that was the evidence.  That the “crucial meeting” was that on 29 May 2003 could be seen from the evidence of Mr McCrindle in the MMS action and in the present action (Appendix pp307-308, 854;  Supplementary Appendix p33) and that of counsel (Appendix pp845, 847) and Mr Barrie (in relation to note-taking - Supplementary Appendix pp197-224).  That was MGL’s case as (correctly) understood by the Lord Ordinary, as can be seen from paragraphs [4], [19] and [30] of his opinion. 

[42]      Thus, the careless destruction and failure to copy contemporaneous notes of the discussion crucial to settlement could not amount to breach of a fiduciary duty in the absence of any suggestion of disloyalty or lack of fidelity but, in any event, it had been found that there was no note taken at the only meeting which, on the evidence, was crucial to settlement.  It could not be said that no reasonable judge could have reached the conclusions on these matters which the Lord Ordinary had reached and recorded at paragraph [30] of his opinion.  Rather, the totality of the evidence justified his conclusion;  he could not be said to have been plainly wrong. 

 

Decision
[43]      It is difficult not to be sympathetic to the situation in which MGL and Mr McCrindle, as their directing mind, found themselves in June 2012.  Proof in the action against MMS had been fixed for 27 November 2012 and preparations for that were on-going when Mr McCrindle was advised (initially, as it would appear, on an imperfect understanding of the facts) by senior counsel that the pursuers were in a position of potential conflict of interest in relation to MGL.  This was not disputed by the pursuers, who advised MGL to obtain independent legal advice. When that legal advice was obtained, it confirmed a conflict, not on the basis of Mr Barrie’s recollection of events not being the same as that of Mr McCrindle, but because of the pursuers’ apparent destruction of and failure to copy Mr Barrie’s supposed contemporaneous notes.  Moreover, Mr McCrindle came, not unreasonably, to believe that Mr Barrie had been negotiating with Mr Donald of Shepherd & Wedderburn without his instructions.  In these circumstances it is unsurprising that Mr McCrindle considered that he had to employ different solicitors and therefore terminate the pursuers’ retainer.  That he felt disinclined to pay at least that part of the pursuers’ outstanding fees as related to the action against MMS is also understandable.  However, Mr McIlvride accepted that the court having sympathy for MGL’s plight in August or September 2012 or regarding as reasonable Mr McCrindle’s decision to terminate the pursuers’ retainer, was insufficient to give MGL the remedy they sought.  For MGL to succeed the court had to accept:  that the pursuers had been subject to the contractual term set out in pleadings (the “proposed term”);  that the proposed term had been breached, again as set out in the pleadings;  that the breach was material; and that the pursuers’ obligation to comply with the proposed term was a counterpart of MGL’s obligation to pay fees.  On all of that being established, MGL were entitled to rescind the contract and so free themselves from their obligation to pay outstanding fees (albeit that an innocent party is not required to take the formal step of rescission in order to resist a claim by the contract breaker:  Forster) If the pursuers wished to make any recovery of these fees it was for them to make out their entitlement quantum meruit on the basis of unjustified enrichment.  

[44]      The proposed term is one that MGL contends was implied into the contract for the provision of professional services.  It was that “the pursuers would not in their conduct of the litigation on [MGL’s] behalf place themselves in a position where there was a real and sensible possibility of their interests conflicting with those of [MGL].”  The Lord Ordinary did not need to apply his mind to whether the proposed term was indeed implied into the contract.  He held that what had been pled as the breach of contract:  the destruction of the only notes of critical discussions “in or around May 2003” did not as a matter of fact occur because no notes were made.  It was therefore immaterial whether or not the proposed term was implied in the contract;  assuming that it was, it had not been breached.  

[45]      The Lord Ordinary was fully entitled to approach his decision-making in this way.  He cut straight to a factual issue, which, depending upon how it was determined, was capable of resolving the case.  Mr McIlvride submitted that by limiting his consideration as to whether a note was taken by Mr Barrie at the meeting on 29 May 2003, the Lord Ordinary defined that issue too narrowly.  I disagree.  It is true that the pleadings refer to evidence of the terms of discussions at meetings which took place “in or around May 2003” but, as appears from consideration of the passages from the transcript referred to by Mr Jones, as the case was developed in evidence, what the pleadings describe as “discussions ...likely to be critical” were those on 29 May and no others.  That was how the Lord Ordinary understood MGL’s case, as appears from paragraphs [4], [19] and [30] of his opinion, and I consider that he was right to do so.  

[46]      If, on the other hand, that were wrong, it would become necessary to consider the relevancy of what Mr McIlvride says is his case and, in particular, the question of whether the proposed term can be taken to have been implied in the contract.  In my opinion the answer to that question is “no”, and MGL’s case fails on that account as well as on that relied on by the Lord Ordinary.  My reasons are as follows.

[47]      I begin by stressing that now that MGL no longer relies on the pursuers’ failure to act in accordance with their instructions in relation to negotiation with Mr Donald;  their case is entirely dependent upon breach of the proposed term in their contract with the pursuers.  It is not about anything else.  While this is merely to repeat what has already been discussed at some length in the preceding paragraphs of this opinion, I stress the point because of the way, in the course of argument of the appeal, MGL’s case slipped between contractual obligation and fiduciary duty.  These are distinct concepts with distinct consequences.  I consider that Mr Jones was right to emphasise that distinction, as he did under reference to the judgment of Millett LJ (as he then was) in Bristol and West Building Society v Mothew at 16C to 19H.  Millett LJ begins the passage robustly:

“The expression ‘fiduciary duty’ is properly confined to those duties which are peculiar to fiduciaries and the breach of which attracts legal consequences differing from those consequent upon the breach of other duties. Unless the expression is so limited it is lacking in practical utility. In this sense it is obvious that not every breach of duty by a fiduciary is a breach of fiduciary duty. I would endorse the observations of Southin J in Girardet v. Crease & Co. (1987) 11 B.C.L.R. (2d) 361, 362:

 ‘The word “fiduciary” is flung around now as if it applied to all breaches of duty by solicitors, directors of companies and so forth . . . That a lawyer can commit a breach of the special duty [of a fiduciary] . . . by entering into a contract with the client without full disclosure . . . and so forth is clear. But to say that simple carelessness in giving advice is such a breach is a perversion of words.’”

Southin J was sitting at first instance in Girardet but, as Millett LJ notes, her remarks were approved by La Forest J, sitting in the Supreme Court of Canada, in LAC Minerals Ltd. v. International Corona Resources Ltd. (1989) 61 D.L.R. (4th) 14 at 28,where he added:  “not every legal claim arising out of a relationship with fiduciary incidents will give rise to a claim for breach of fiduciary duty.”  

[48]      In the present case, the pursuers, as solicitors acting on their behalf in litigation, were in a fiduciary relationship with MGL.  They were also in a contractual relationship.  The pursuers therefore owed MGL both fiduciary duties and contractual obligations but, and I see this as being underlined in Bristol and West Building Society, these fiduciary duties on the one hand and contractual obligations on the other are distinct.  A key to that distinction is that the core feature of a fiduciary duty is that it is fundamentally an obligation of loyalty and, as Millett LJ says in Bristol and West Building Society at 18E: 

“The nature of the obligation determines the nature of the breach. The various obligations of a fiduciary merely reflect different aspects of his core duties of loyalty and fidelity. Breach of fiduciary obligation, therefore, connotes disloyalty or infidelity. Mere incompetence is not enough. A servant who loyally does his incompetent best for his master is not unfaithful and is not guilty of a breach of fiduciary duty.”

[49]      The distinction is not affected by the fact that the fiduciary relationship has arisen as a result of parties having entered into a contract. In the example given by Millett LJ the servant will have contracted to be employed in a capacity with fiduciary incidents.  By accepting a retainer a solicitor will almost inevitably put himself in a relationship of trust and confidence with his client from which fiduciary duties will arise.  That is certainly so where the nature of the retainer is to act in litigation.  The origin of the retainer will have been a contract for professional services with its various obligations.  That does not mean that the consequent fiduciary duties are to be equated with contractual obligations.  Putting it slightly differently, a contract to act in a fiduciary capacity need not and should not be analysed as necessarily incorporating the resulting fiduciary duties as contractual obligations.  

[50]      Turning to the specifics of the present case, as appears from MGL’s pleadings, the proposed term is a term implied as a matter of the general law, as opposed to a term arising due to some special express provision or some special circumstances.  No speciality is pled.  Accordingly, if Mr McIlvride’s submission is correct and the relevant term applied to the contract for the conduct of litigation in this case, it will apply to any and every contract whereby a solicitor undertakes litigation on behalf of a client.  It will therefore have to be regarded, to use the language of Lord Reid in Sterling Engineering Co v Patchett [1955] AC 534 at 547, as “a term inherent in the nature of the contract which the law will imply in every case unless the parties agree to vary it or exclude it.”  One might therefore expect it to have been previously recognised in the case law.  Apparently that is not so;  Mr McIlvride offered no direct authority for his proposition that the proposed term was inherent in a contract for the provision of a solicitor’s services.  

[51]      What Mr McIlvride did offer was reference to what was said by Lord Upjohn in Phipps v Boardman at 123 (as applied in Commonwealth Oil & Gas v Baxter).  The context of Lord Upjohn’s dictum was a claim for an account of profits by a beneficiary of a trust against the trust’s solicitor who had used information, gained in this capacity, to purchase shares in a company on advantageous terms.  The solicitor had acted quite openly but nevertheless was found liable to account to the trust for his personal profit on the share transaction.  Lord Upjohn said this: 

“Rules of equity have to be applied to such a great diversity of circumstances that they can be stated only in the most general terms and applied with particular attention to the exact circumstances of each case. The relevant rule for the decision of this case is the fundamental rule of equity that a person in a fiduciary capacity must not make a profit out of his trust which is part of the wider rule that a trustee must not place himself in a position where his duty and his interest may conflict. I believe the rule is best stated in Bray v Ford by Lord Herschell, who plainly recognised its limitations:  

‘It is an inflexible rule of a Court of Equity that a person in a fiduciary position, such as the respondent's, is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict. It does not appear to me that this rule is, as has been said, founded upon principles of morality. I regard it rather as based on the consideration that, human nature being what it is, there is danger, in such circumstances, of the person holding a fiduciary position being swayed by interest rather than by duty, and thus prejudicing those whom he was bound to protect. ...’

It is perhaps stated most highly against trustees or directors in the celebrated speech of Lord Cranworth LC in Aberdeen Railway v. Blaikie, where he said:

‘And it is a rule of universal application, that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect.’

The phrase ‘possibly may conflict’ requires consideration. In my view it means that the reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real sensible possibility of conflict; not that you could imagine some situation arising which might, in some conceivable possibility in events not contemplated as real sensible possibilities by any reasonable person, result in a conflict.”

[52]      There is no issue about the soundness of what Lord Upjohn says in this passage but, in my opinion, it has no application to the present case.  There is nothing in the passage about contract and there is nothing in the pleadings in the present case about fiduciary duty.  Given the observations by Millett LJ in Bristol and West Building Society about the nature of such a breach (and indeed the examples given in the passage from Phipps v Boardman) I doubt very much that what is alleged in the present case, namely an inadvertent failure to scan everything in a file before it was destroyed, could amount to breach of fiduciary duty, but the more critical point is that because a solicitor has a particular duty arising from the fiduciary nature of his relationship with his client does not require the contract for the retainer to be analysed as containing an implied term not to breach the fiduciary duty.  Such an analysis has no purpose.  If a solicitor is under a duty by virtue of the fiduciary relationship, there is no need to re-impose it by the mechanism of contractual implication.  I would therefore reject the proposition that the proposed term was implied into the contract between the parties as both unwarranted by authority and unnecessary. 

[53]      There is an additional difficulty with MGL’s case.  The proposed term is modelled on, mirrors or is otherwise derived from the duty of a fiduciary not to put himself in a position where his interest and duty conflict, and yet what Mr McIlvride argues for, as a usual incident of every contract for a solicitor’s services in the conduct of litigation, is something which goes beyond the ambit of the equivalent fiduciary duty.  What Mr McIlvride argues for is a contractual guarantee that circumstances will not arise in which, should they continue to act for MGL, the pursuers might find themselves in a position where their interests conflicted with those of their client.  I stress the difference between “find themselves in a position” and Lord Upjohn’s “place himself in a position”.  As Millett LJ explains in Bristol and West Building Society, at its core a fiduciary duty is an obligation of loyalty and therefore breach of a fiduciary duty requires a disloyal action on the part of the fiduciary.  It is to such a disloyal action that Lord Upjohn was referring when he said that a fiduciary “must not place himself in a position where his duty and his interest may conflict” (emphasis added).  That is the context provided by the cases which Lord Upjohn was considering:  the solicitor buying shares on his own account when he is party to special knowledge which he acquired in his capacity of trustee in Phipps;  one of the directors contracting with the company for the supply of construction materials in Aberdeen Railway;  or a trustee who was a solicitor charging the trust for professional services without being authorised to do so by the trust deed in Bray v Ford.  In the present case there was no disloyal action on the part of the pursuers.  What was pled as amounting to a breach of the proposed term was the destruction of supposed contemporaneous evidence without MGL’s consent.  In a sense that was a deliberate act but Mr McIlvride confirmed that it was not so much the act of destruction which was complained of, as the failure to make a digital copy.  MGL’s case did not involve any allegation of malice or intention to acquire some benefit on the part of the pursuers.  Rather, an inadvertent failure to copy the whole contents of a file before it was destroyed was enough to put the pursuers in breach of the proposed term.  An obligation that may be breached by an inadvertent omission is significantly different from a duty that can only be breached by a deliberate act; and yet on Mr McIlvride’s presentation the former must be implied in the contract creating the solicitor/client relationship because the latter is an incident of that relationship once it has been created.  I do not find that logical and I do not accept that it is so.

[54]      The difficulties with MGL’s case do not end there.  As Mr Jones observed, if the proposed term is taken to be implied into all such contracts, this would render superfluous the duty to exercise the ordinary skill and care of a competent solicitor professing expertise in the conduct of litigation (a contractual duty which, as it happens, is specifically pled in the present case).  That is because, on Mr McIlvride’s approach, the occurrence of any event which was sufficiently under the solicitor’s control that it could be characterised as an instance of the solicitor “placing himself” and which at least potentially had an adverse impact on the client’s prospects in the litigation, would be a breach of contract by reason of what is said to be the conflict of interest arising from the solicitor being tempted to conceal or minimise the consequences of the relevant event.  There would be no need to prove that an act or omission on the part of the solicitor had amounted to a failure to exercise reasonable care.  Proof of the event would be enough.  It would not even be necessary to prove that there had been or were likely to be adverse consequences;  the potential for adverse consequences would be sufficient.  It goes without saying that that this is not the way in which the contract for the provision of a solicitor’s services is usually analysed.  

[55]      Had it been the case that MGL had established material breach of contract on the part of the pursuers in respect of their conduct of the litigation between MGL and MMS, a question would have arisen as to whether, under the principle of mutuality, MGL would have been entitled to refuse to pay fees incurred in respect of other work done for them by the pursuers, as MGL claims to be entitled to do.  However, given the Lord Ordinary’s findings of fact and my view of the relevancy of the MGL averments as to the implication of the proposed term, that question need not be addressed. 

[56]      In summary, in my opinion the only aspect of MGL’s case which is now insisted upon fails, first, because it was not established in evidence, and, second because it was in any event irrelevant in that it depended upon the implication of a contractual term which I consider cannot be implied.  I therefore move your Ladyship and your Lordship to refuse this reclaiming motion and to adhere to the interlocutor of the Lord Ordinary, meanwhile reserving all questions of expenses. 

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2016] CSIH 27

CA133/12

 

Lord Brodie

Lady Clark of Calton

Lord McGhie

OPINION OF LADY CLARK OF CALTON

in the cause

MACROBERTS LLP

Pursuers and respondents;

against

MCCRINDLE GROUP LIMITED

Defenders and reclaimers:

Pursuers and respondents:  Jones, Sol Adv;  bto

Defenders and reclaimers:  McIlvride QC;  TLT Solicitors

28 April 2016

[57]      For the reasons given by Lord Brodie, I agree that this reclaiming motion should be refused and that all questions of expenses should be reserved.

 

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2016] CSIH 27

CA133/12

 

Lord Brodie

Lady Clark of Calton

Lord McGhie

OPINION OF LORD McGHIE

in the cause

MACROBERTS LLP

Pursuers and respondents;

against

MCCRINDLE GROUP LIMITED

Defenders and reclaimers:

Pursuers and respondents:  Jones, Sol Adv;  bto

Defenders and reclaimers:  McIlvride, QC;  TLT Solicitors

28 April 2016

[58]      I have had the opportunity of reading the Opinion of Lord Brodie in draft and gratefully adopt his summary of the facts and analysis of the issues.  I agree broadly with his reasoning and am satisfied that the reclaiming motion should be refused.