SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT BANFF

SC27/05

Act: Mr Darren Taylor, solicitor, Davies Wood Summers LLP, Aberdeen

Alt: Mr Thomas A Mullen, solicitor, Stronachs, Aberdeen

Banff: 14 July 2006

The sheriff principal, having resumed consideration of the cause, answers the questions of law in the stated case numbered 1 - 9 inclusive and 12 in the affirmative, finds it unnecessary to answer the questions of law numbered 10 and 11 and accordingly refuses the appeal and adheres to the decree pronounced by the sheriff on 28 March 2006; reserves meantime the question of the expenses of the appeal and appoints parties to be heard thereon in chambers at Aberdeen Sheriff Court on Thursday 20^th July 2006 at 2.15 pm.

Note

[1] Before turning to the details of the pursuer's claim and the defender's response thereto, I think that it may be helpful to be reminded of the terms of the relevant provisions of the Summary Cause Rules 2002.

[2] Rule 4.1(1) provides: "A summary cause action shall be commenced by summons, which shall be in Form 1". This is printed in Appendix 1 to the rules and includes a box numbered 7 in which appear at the top the words: "STATE DETAILS OF CLAIM HERE". In support of this rule 4.2 provides:

4.2 The pursuer must insert a statement of his claim in the summons to give the defender fair notice of the claim; and the statement must include -

(a) details of the basis of the claim including relevant dates; and

(b) if the claim arises from the supply of goods or services, a description of the goods or services and the date or dates on or between which they were supplied and, where relevant, ordered.

[3] Rule 4.3(a)(i) provides, in short, that a copy summons shall be served on the defender in Form 1a where the action is for, or includes a claim for, payment of money. This form is also printed in Appendix 1, and incorporates a direction to the defender that he "must send to the court by the return day a written note of any proposed defence". Further down the form there is a box headed "WRITTEN NOTE OF PROPOSED DEFENCE/COUNTERCLAIM". In the box there are then three instructions to the defender which read respectively: "State which facts in the statement of claim are admitted", "State briefly any facts regarding the circumstances of the claim on which you intend to rely", and "State details of counterclaim, if any". Beneath each of these statements there is space for the defender to insert his statement.

Form 1a is reinforced by rule 8.1(1) which provides:

(1) if the defender intends -

(a) to challenge the jurisdiction of the court or the competency of the action;

(b) to defend the action (whether as regards the amount claimed or otherwise); or

(c) state a counterclaim,

he must complete and lodge with the sheriff clerk or on before the return day the form of response contained in the defender's copy summons including a statement of his response which gives fair notice to the pursuer.

[4] Rule 8.3 tells the sheriff what he is to do at the first hearing. It provides, inter alia:

(2) at the hearing, the sheriff shall -

(a) ascertain the factual basis of the action and any defence, and the legal basis on which the action and defence are proceeding; and

(b) seek to negotiate and secure settlement of the action between the parties.

(3) if the sheriff cannot secure settlement of the action between the parties, he shall -

(a) identify and note on the summons the issues of fact and law which are in dispute;

(b) note on the summons any facts which are agreed;

(c) where it appears that the claim as stated or any defence stated in response to it is not soundly based in law in whole or in part, hear parties forthwith on that matter and may grant decree in favour of any party; and

(d) if satisfied that the claim and any defence have or may have a sound basis in law and that the dispute between the parties depends upon resolution of disputed issues of fact, fix a diet of proof or, alternatively, if satisfied that the claim and any defence have a sound basis in law and that the facts of the case are sufficiently agreed, hear parties forthwith on the merits of the action and may grant decree in whole or in part in favour of any party.

[5] Rule 8.15 provides in short that, if in the course of a proof an objection is made to the admissibility of any evidence, the sheriff must note the terms of the objection and allow the evidence to be led reserving the question of its admissibility to be decided by him at the close of the proof. Rule 8.18 then directs the sheriff, whether he pronounces his decision at the end of a hearing or proof or after reserving judgement, to "state briefly the grounds of his decision, including the reasons for his decision on any question of law or of admissibility of evidence".

[6] Rule 13.1(1) is perhaps of particular significance in this case in view of the sheriff's conclusion, as I understand his stated case, that issues of relevancy and specification must be raised and disposed of before a summary cause proceeds to proof. This rule provides:

(1) The sheriff may, on the incidental application of a party, allow amendment of the summons, form of response, counterclaim or answers to a counterclaim and adjust the note of disputed issues at any time before final judgement is pronounced on the merits.

[7] Rule 17.1 deals with the lodging of productions. Rule 17.1(1) provides that a party who intends to rely at a proof upon any documents or articles in his possession must (a) lodge them with the sheriff clerk together with a list detailing the items no later than fourteen days before the proof, and (b) at the same time send a copy of the list to the other party. Rule 17.1(3) provides that a party lodging a document under the rule must send a copy of it to every other party, unless it is not practicable to do so. Then Rule 17.1(4) provides in short that subject to certain qualifications only documents or articles produced in accordance with these rules may be used or put in evidence.

[8] I turn now to the details of the pursuer's claim and the defender's response thereto. In the first paragraph in his statement of claim (in Box 7 of Form 1) the pursuer averred that in the present action he sought payment of sums due to him under and in terms of the contract "hereinafter referred to". He then set out the detailed terms of his claim in the third paragraph which reads as follows:

The Pursuer is a building contractor. The Defender is a building contractor. In October 2004 the Defender asked the Pursuer to price for work at Sod Inn, Kinninmonth, Mintlaw. In October 2004 the Pursuer issued an estimate to the Defender for that work. The Defender verbally accepted that estimate. That estimate is based on drawings which were provided by the Defender to the Pursuer. That estimate will be lodged in process. The estimate is referred to for its terms which are incorporated herein and repeated brevitatits causa. The Pursuer was employed by the Defender as a sub-contractor. After the Pursuer had began work, the Defender provided the Pursuer with amended drawings. In 2004 and 2005 the Pursuer carried out work. In April 2005 the Pursuer issued an invoice to the Defender for work carried out as per the amended drawings. The work is detailed in the invoice. That invoice was in the sum of £6,657.47. In May 2005 the Defender made a payment in the sum of £5,207.47. The sum of £1,450 remains outstanding. That is the sum sued for. The work undertaken by the Pursuer is detailed on the Pursuer's invoice. That invoice will be lodged in process. The invoice is referred to for its terms which are incorporated herein and repeated brevitatis causa.

[9] The defender's response to the summons incorporated a written note of his proposed defence in the following terms (no details of any counterclaim were stated):

State which facts in the statement of fact are admitted:-

The parties are as designed in the instance. The Pursuer is a Building Contractor. Defender is a Building Contractor. The Pursuer issued an estimate to the Defender for work done. The Defender verbally accepted this estimate. The estimate was based on drawings which were provided by the Defender to the Pursuer. The Pursuer was employed by the Defender as a sub-contractor. In 2004 and 2005 the Pursuer carried out work. In April 2005 the Pursuer issued an invoice to the Defender for work carried out. This invoice was in the sum of £6,657.47. In May 2005 the Defender made payment to the Pursuer's account of £5,207.47.

State briefly any facts regarding the circumstances of the claim which you intend to rely:-

In or around April 2005 the Pursuer walked away from the job that he was carrying out for the Defender. In doing so he breached the contract between himself and the Defender. The Defender left behind remedial and snagging work. The Defender withheld the sum of £1,450 from the invoice received from the Pursuer, to take account of the fact that he was required to pay a replacement builder to finish off the work which was not completed by the Pursuer.

[10] At this point, and bearing in mind the requirement of fair notice in terms of rule 8.1(1), I think that it should be emphasised that there was here no suggestion by the defender that the works detailed in the invoice had not been carried out by the pursuer as instructed by the defender or that any or all of them had been in any way defective. Nor was it suggested that the sum of £6,657.47 had been calculated in whole or in part on a wrong basis or was excessive, or that the pursuer was otherwise not entitled in principle to payment of this sum. Indeed the defender accepted that he had made a payment to the pursuer's account in the sum of £5,207.47. But he did not suggest, for example, that he had paid this sum in error or for some reason other than that the sum of £6,657.47 was in principle due and payable to the pursuer. He then went on to explain why he had withheld the difference between these two sums, namely £1,450. As noted, his position was that the pursuer had breached the contract leaving behind remedial and snagging work and he (the defender) had withheld this sum to take account of the fact that he had been required to pay a replacement builder to finish off the work which was not completed by the pursuer. In other words he was in my opinion to all intents and purposes admitting that, if he did not succeed in establishing this particular line of defence, he would be bound to pay the balance of £1,450 to the pursuer.

[11] The first hearing was assigned to take place on 9 August 2005. On 3 August 2005 the pursuer lodged his first inventory of productions. No. 5/1/1 is a copy of the estimate to which he had referred in his statement of claim. It details various items of work which were to be carried out at the site in question. These individual items are not separately priced, but an overall price of £23,961 is stated for the work as a whole. No. 5/1/3 is the copy of the invoice in the sum of £6,657.47 referred to by the pursuer. Attached to it was a document (of which no. 5/1/4 is a copy) which gave a detailed breakdown of the pursuer's charges for labour and materials on eighteen specified dates between 12 February and 19 April 2005 inclusive. These charges total £6,657.47. The invoice itself specifies a variety of items of work which had been carried out including three which are designated as extras. No separate sum is indicated on the invoice itself against any of these individual items of work.

[12] At the first hearing both parties were represented by local solicitors rather than by their principal agents. Understandably in light of the defender's written note of proposed defence the sheriff concluded that the principal issue in the case was whether or not the pursuer had breached his contract with the defender and, if so, whether he was entitled to set off the sum of £1,450 by way of resulting damages. As the sheriff puts it in his stated case: "I took it to be the defender's position that the work in respect of which he was being sued had been done but that the work had required to be "snagged" or "remedied" and that costs had been incurred in that regard". In light of this the sheriff noted the disputed issues as follows:

1. Did the pursuer breach his contract with the defender?

2. If not, is the pursuer now entitled to payment of the sum sued for?

3. If so, was the defender entitled to treat the contract as rescinded and to employ other contractors to complete the contract works?

4. If so entitled, is the pursuer now barred from seeking payment of any further sum?

[13] The upshot of the first hearing was that the sheriff assigned a proof to take place on 17 October 2005. In anticipation of this the pursuer lodged his second inventory of productions on 30 August 2005. This contained two documents, but nothing turns on these for present purposes. Then on 28 September 2005 the pursuer lodged his third inventory of productions which incorporates six drawings said to have been provided by the defender to the pursuer. It will be recalled that in his statement of claim the pursuer had averred that, after he had begun work, the defender had provided him with amended drawings, and nos. 5/3/4 and 5/3/5 are said to be copies of amended drawings while no. 5/3/6 is said to be a copy of a handwritten drawing showing an amended site layout. It does not appear from his stated case that it was ever suggested to the sheriff, nor was it suggested in the course of the appeal, that the pursuer had failed to comply with the terms of rule 17.1, and in particular rule 17.1(3). It may be assumed therefore that before the proof the defender was familiar not only with the pursuer's statement of claim but also with the documents referred to in his three inventories of productions.

[14] In the event the proof had to be discharged and a new diet of proof was assigned for 12 December 2005. On that date the sheriff heard evidence from the pursuer and his wife. No evidence was led for the defender. The matter was then continued until 13 February 2006 when the sheriff heard parties' submissions and gave his judgement from the bench. He found the pursuer entitled to the sum sued for and the defender liable to him in the expenses of the cause as assessed by the sheriff clerk. After this assessment had been carried out, on 28 March 2006 the sheriff granted final decree against the defender for payment to the pursuer of the sum of £1,450 together with expenses of £2,654 and interest thereon as craved in the summons.

[15] In the course of the evidence of the pursuer the defender's solicitor made three objections to the admissibility of his evidence. He made a fourth objection in the course of the evidence of the pursuer's wife. In the case of each objection the sheriff, quite properly in view of the terms of rule 8.15, noted the terms of the objection and allowed the evidence to be led reserving the question of its admissibility to be decided by him at the close of the proof. In the event he repelled all four objections and, in a nutshell, the principal issue in this appeal appears to me to be whether or not he was right to do so.

[16] In response to the defender's note of appeal the sheriff prepared a detailed stated case. He made a total of nineteen findings in fact, three findings in fact and law and one finding in law. These are set out on pages 2 - 4 of the stated case and it is unnecessary to repeat them here. At pages 5 - 8 the sheriff set out the evidence of the pursuer and his wife and noted the points at which the four objections had been made on behalf of the defender. He noted the details of these objections at pages 8 and 9, and again it is unnecessary to set these out in full here. In short, the substance of these objections was that the pursuer had not given fair notice to the defender of the evidence which he intended to lead in relation to (a) the extra works done by him over and above those which had formed part of his original estimate, and (b) the circumstances in which the pursuer had "walked away from the job" as had been averred by the defender. It appears from the stated case that, as the discussion developed before the sheriff, the question arose whether or not issues of relevancy and specification could only be raised at the first hearing of a summary cause. It appears too that this came about in light of a submission by the defender's solicitor at the close of the evidence to the effect that the pursuer had not stated a relevant claim. Be that as it may, the issue which the sheriff had to decide in relation to the objections was a perfectly simple one, namely whether or not there was a sound basis in the pursuer's statement of claim and the documents lodged by him (some of which had been expressly incorporated in his statement of claim) for the evidence which he intended to lead and to which objection had been taken. In other words, had the pursuer in advance of the proof given the defender fair notice of the facts that he hoped to prove?

[17] This issue is the subject of the defender's fourth and fifth grounds of appeal which in short are that the sheriff erred in law in repelling the defender's objections to the evidence for the pursuer in relation to the extras and the circumstances in which the contract terminated. In my opinion the sheriff was quite right to repel these objections.

[18] On the matter of the extras, it should be recalled that in his statement of claim the pursuer had specifically averred that, after he had submitted his original estimate and had begun work, the defender had provided him with amended drawings and that in April 2005 he (the pursuer) had issued an invoice to the defender for work carried out as per the amended drawings. These amended drawings were lodged in process before the proof - see nos. 5/3/4, 5 and 6. Also lodged in process were the invoice dated 19 April 2005 to which the pursuer had referred in his statement of claim and his earlier invoice dated 19 January 2005 - see nos. 5/1/2, 3 and 4. On the later invoice the three extra items of work are specifically identified by the word "extra" beside each of them. In these circumstances it seems to me that the pursuer was well entitled to lead evidence to the effect that he had carried out extra works over and above those in the original estimate in accordance with the amended drawings supplied to him by the defender.

[19] As for the defender's objection to the pursuer's leading evidence about the circumstances in which he came to leave the site, in my opinion the short answer to this is that the pursuer was plainly entitled to lead evidence to rebut what, according to his written note of proposed defence, the defender had indicated that he intended to establish in response to the pursuer's claim.

[20] The third ground of appeal is that the sheriff erred in law in repelling the defender's objection to the pursuer's evidence as to how the sum sued for was constituted. In my opinion the answer to this ground of appeal is that no such objection was made on behalf of the defender. On the contrary, the first and second objections were directed against the evidence of the pursuer about the extra works while the third and fourth objections plainly had nothing to do with how the sum sued for was constituted.

[21] In this context, it is I think important to notice in particular what the sheriff has to say in his stated case about the making of the first and second objections, the accuracy of which was not challenged in the course of the hearing of the appeal. He refers to these in the first place on pages 5 and 6 where he wrote:

With reference to the plans, marked as productions 5/3/1 and 5/3/2, Mr Harris explained the layout of the site - with particular reference to the proposed layout of the entrance and access roadway - and of the house foundations. After work had begun, he was then presented with further plans.

At this point in the evidence of Mr Harris, the first objection referred to below, Objection 1, was made. Having heard the parties on this objection, the evidence proceeded.

Referring to production 5/3/4, Mr Harris then pointed to certain "extras" that had been instructed. A fire bunker had been added at the position of a hearth chimney. This had involved "building a box" up to the floor level. Certain additional drainage works had been required. Pipes, block work and time had been involved in giving effect to these further instructions.

Mr Harris then said he had been given a further plan, production 5/3/5. At this point, (the defender's solicitor) indicated that he was taking a further objection - Objection 2. The basis for this was the same as for Objection 1. To avoid a constant repetition of this line of objection, it was agreed that all the further evidence given by this witness relating to work over and above that contained in the original estimate would be allowed to proceed under reservation.

[22] The sheriff refers again to the first and second objections on page 8 of the stated case where he explained the first objection as follows:

(The defender's solicitor) suggested that the pursuer's claim clearly proceeded with reference to a plan and estimate which had formed the basis of the contract between the parties. Was the pursuer, he asked, now to suggest that there had been a variation of that contract? If so, he suggested, there was no record for this and evidence of a variation should not be admitted.

Further down the same page, referring again to the submissions of the defender's solicitor in support of the first objection, the sheriff wrote:

In so far as the pursuer had not spelt out the consequences of the amended plans, no fair notice had been given (as I understood this submission) of an intention on the part of the pursuer to lead evidence of a variation of the contract.

Finally on page 8, referring to the second objection, the sheriff recorded that this was simply a repetition of the first objection.

[23] The sheriff explains the reasons for his decision to repel the objections on page 16 of the stated case. He began by saying:

I took the view that the objections were unfounded. I expressed the view that the pleadings were apt to allow the evidence led. The evidence objected to related to two areas of the pursuer's case - albeit, when delivering my judgement - I proceeded on the misunderstanding that three different areas had been the subject of objection.

The sheriff proceeded to discuss these three areas of evidence. Referring to the evidence about the extras, the sheriff wrote:

Only had he failed to read the statement (of claim) and supporting documentation, could the defender have been taken by surprise when the issue of extras emerged in evidence. There was clear notice the amended plans and extras were likely to be the subject of evidence.

Finally on page 16, after rightly disposing of the third and fourth objections, the sheriff wrote:

3. Detailed evidence as to the value of the labour and materials in respect of which the pursuer sued. At the point of delivering my judgement, I had it in mind that (the defender's solicitor's) objections had extended to the evidence led as to the detailed charges applied by the pursuer when preparing his invoice. I was, I think, wrong in that - the issue was really raised in his submissions and not at the point at which he objected to the evidence (the emphasis is mine). I did, however, when giving my judgement express the view that by incorporating his detailed "attached sheet" into his pleadings, the pursuer provided an adequate record for leading evidence as to the basis of his charges.

[24] The defender's first ground of appeal reads as follows:

1. The sheriff erred in law in finding in favour of the pursuer on a different basis from that relied upon in the pursuer's statement of claim. The pursuer's claim is ex facie that he is entitled to payment further to an estimate issued by him and an acceptance by the defender. The pursuer's evidence was that the original contract entered into was not completed as a result of the defender's breach of contract and that the pursuer was entitled to payment for the work invoiced by him, though the contract as originally envisaged was not completed.

[25] In my opinion the answer to this ground of appeal is that it is not true that the sheriff found in favour of the pursuer on a different basis from that relied upon in the pursuer's statement of claim. Nor is it true that the pursuer's claim was simply that he was entitled to payment further to an estimate issued by him and an acceptance by the defender. It is perfectly clear from the statement of claim that the pursuer was seeking payment for the works executed by him, not merely in pursuance of the original estimate, but also in pursuance of the amended drawings issued to him by the defender. In a nutshell, the substance of the pursuer's claim that he was entitled to be paid for the works detailed in the invoice dated 19 April 2005, these works having been carried out by him as instructed by the defender in accordance with the original estimate and the subsequent amended drawings, and this is exactly what the sheriff has found. (In passing, I observe that I was not asked to delete or amend any of the sheriff's findings in fact or in law). I can understand that, in other circumstances, there might have been a question about the precise legal basis upon which the value of the extra works carried out by the pursuer should have been quantified. But, having regard to the terms of the defender's written note of defence, I do not consider that this was an issue which the defender was entitled to pursue in this particular case.

[26] The second ground of appeal is that the sheriff erred in law in holding that since the defender's objections went to the relevancy of the pursuer's statement of claim the defender ought to have raised the issue of the competency (sic) of the pursuer's statement of claim at the first hearing and it was now too late to do so. It is said here too that the defender could not have reasonably anticipated at the first hearing the line which the pursuer's evidence would take. Having regard to the conclusions which I have reached on the other four grounds of appeal, I do not think that it is necessary that I should express an opinion on this particular ground of appeal. Even if it be correct that the sheriff erred in law as claimed by the defender (and I do not say that he did), I cannot see how this particular error in law should affect the outcome of this appeal.

[27] In conclusion, I may say that, in light of his written note of proposed defence, I think that the defender was fortunate that he was not ordained to lead at the proof (see rule 8.11). I say this since, as already noted, there was never any suggestion in the written note of proposed defence that the pursuer was not in principle entitled to payment of the sum sued for. The only ground of defence was that, the pursuer having been in breach of contract, the defender had been entitled to withhold the sum of £1,450 to take account of the fact that he was required to pay a replacement builder to finish off the work which had not been completed by the pursuer. It was for the defender to establish this ground of defence which is why I think that he ought to have been ordained to lead at the proof. And, not having given evidence at all, let alone evidence in support of his single ground of defence, the defender in my opinion cannot now be heard to complain that the sheriff should have granted decree against him for payment of the sum of £1,450.

[28] It was agreed that the question of the expenses of the appeal should be reserved for a further hearing.