Court allows a seven-figure claim to continue after a company sought to rely on the “most technical of objections”

  • Insight

17 July 2018

A recent decision of the Inner House of the Court of Session has shown that not every failure to comply with the court rules will prevent a case from continuing.  The court held that a decision of the commercial judge which prevented a high value action from going further due to non-compliance with the rules of court, was a “clear example” of a situation when the court should exercise its discretion to relieve a party from a failure to comply with the Rules.

Background

Tarmac Trading Limited (“Tarmac”) was the tenant under the lease of a quarry whose occupation ended on the 9th of March 2012. The late Robert Scott Hamilton was the landlord under the lease. On the 8th of March 2017, one day short of the five-year prescriptive period, Mrs Hamilton (the Executrix of Mr Hamilton) served a summons on Tarmac.  She sought declarator that Tarmac was in breach of its obligations under the lease and payment of sums for an alleged failure to carry out restoration work at the expiry of the lease. However, the English process server had not signed the form of citation (form 13.7).

Tarmac then raised a separate action seeking declarator that the action for damages had not been validly served by the summons of 8th March 2017, reduction of the unsigned form 13.7 and interdict against Mrs Hamilton from lodging the summons for calling. Mrs Hamilton invited the court to exercise its dispensing power to relieve her from the consequences of failing to comply with the Rules.

Outer House decision

In the Outer House, Lord Doherty held that the requirement for a citation to be signed was found in the Citation Act 1592 and not the Rules of Court. The unsigned citation rendered the purported citation a nullity. Furthermore, the “non-compliance [with a statute] cannot be vanished away” by use of the dispensing power.

Inner House decision

Mrs Hamilton appealed to the Inner House where the appeal was allowed.  The court held that the “essential flaw” in Lord Doherty’s reasoning was proceeding on the basis that the requirement for signature was found in the 1592 Act only.  Lord Malcolm, giving the opinion of the court, observed that the requirement to sign the citation was also found in the Rules of Court.

Comment

The approach adopted in respect of the statutory provisions governing service was a purposive one. The dispensing power was introduced to ensure that inadvertent failures to comply with procedural requirements did not see actions being dismissed unfairly. In the present circumstances, Tarmac had received a service copy of the summons. The company had had fair notice of the action against it. The absence of a signature on the citation did not cause prejudice or difficulty. Tarmac’s reliance “upon the most technical of objections” did not allow it to take advantage of the subsequent expiry of the prescriptive period.

Lord Malcolm held that this was a “clear example of the kind of case for which the dispensing provisions were designed”.  

The court also expressed its concern about the practice in general of taking “purely technical objections of no inherent merit, which, if upheld, would thwart rather than further the interests of justice.” Practitioners would be advised to think twice before taking such purely technical objection going forward.

For further information contact Dominic Scullion