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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Manson v. Skinner [2002] ScotCS 61 (7th March, 2002) URL: http://www.bailii.org/scot/cases/ScotCS/2002/61.html Cite as: [2002] ScotCS 61

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Manson v. Skinner [2002] ScotCS 61 (7th March, 2002)

SECOND DIVISION, INNER HOUSE, COURT OF SESSION
Lord Justice Clerk Lord MacLean Lord Weir	OPINION OF THE COURT delivered by THE LORD JUSTICE CLERK in the APPEAL in the cause Mrs ALICE MANSON Pursuer and Respondent: against R.L. SKINNER Defenders and Appellants;   _____

Act: Gildea; James Gildea, S.S.C., Glasgow

Alt: MacAulay, Q.C.; Anderson Strathern, W.S.

 

7 March 2002

 

Introduction

1. This is an appeal from the decision of the sheriff principal at Edinburgh on a short point concerning the effect of a tender when the sum ultimately awarded to the pursuer exceeds the amount of the tender, but only as a result of the accrual of interest.
2. This was an action of damages arising from a road accident that occurred on 4 March 1995. The initial writ was warranted on 26 February 1998. Defences were lodged on 3 April 1998. With the defences the defenders lodged a Minute of Tender in the sum of £3,000, with the expenses of process to the date of the tender, in full satisfaction of the craves of the Initial Writ.
3. A short proof in the action was held on 5 January 1999. On 2 March 1999 the sheriff issued his judgment. He found the defender liable to the pursuer in damages and awarded the sum of £2,800 plus interest. The principal sum consisted of an award of £2,500 for solatium, of which one-half was attributed to the past, and £300 for loss of services, all of which was attributed to the past. It followed that half of the solatium and the whole award for services, that is to say £1550 in all, bore interest. With judicial interest applied on that sum, the pursuer recovered in all £3,047. The total award therefore exceeded the tender. But if the award had been calculated as at the date of the tender, the value of it would have been £2,992, that is to say £8 less than the tender.

The statutory provision

4. Section 1(1B) of the Interest on Damages (Scotland) Act 1958, as amended by the Interest on Damages (Scotland) Act 1971, provides as follows:

"(1B) For the avoidance of doubt, it is hereby declared that where, in any action in which it is competent for the court to award interest under this Act, a tender is made in the course of the action, the tender shall, unless otherwise stated therein, be in full satisfaction of any claim to interest thereunder by any person in whose favour the tender is made; and in considering in any such action whether an award is equal to or greater than an amount tendered in the action, the court shall take account of the amount of any interest awarded under this Act, or such part of that interest as the court considers appropriate."

 

The decisions on expenses

The sheriff

5. The pursuer moved the sheriff to award the whole expenses of process to the pursuer on the view that the tender, being less than the sum awarded, was of no effect. The defenders argued that the pursuer had obtained an award greater than the amount of the tender only because she had failed to accept it. That caused the litigation to be prolonged by almost a year during which the accrual of interest brought the value of the award up to a sum greater than the tender. While there was a general rule that a pursuer who declined a tender and then beat it was entitled to expenses, the rule was not absolute. This argument was based in part on section 1(1B) (supra).
6. The sheriff accepted the defenders' argument and awarded expenses to the pursuer up to the date of the tender and to the defenders from that date.

The sheriff principal

7. The pursuer appealed to the sheriff principal on quantum and on expenses. By interlocutor dated 18 January 2000 the sheriff principal refused the pursuer's appeal on quantum but allowed the appeal on expenses. He found the defenders liable to the pursuer in the whole expenses of the action (see 2001 SLT (Sh Ct) 161).
8. The sheriff principal concluded that section 1(1B) (supra) entitles the court, as a matter of discretion, to depart from the general rule where it appears appropriate to do so. It would not be appropriate to do so simply because the accrual of interest from the date of the tender resulted in an award that exceeded the amount of the tender. That would be to deprive the general rule of all meaning and efficacy. No special reason had been made out for departing from the general rule.

The submissions for the parties

9. Counsel for both parties accepted that the sub-section gives the court a discretion; but they differed as to the circumstances in which that discretion should be exercised. Counsel for the appellant argued that the court should exercise the discretion in any case where the tender is beaten by reason only of the accrual of interest. Counsel for the respondent argued that the discretion should be exercised only where, in the view of the court, the period of delay before final decree was excessive. Counsel for the respondent did not offer us any practical yardstick by which we could make that judgment.
10. In the course of the appeal we were referred to three cases. Counsel for the appellants relied on Riddell v Lanarkshire & Ayrshire Rly Co ((1904) 6 F 432). That was a compensation case where, on an interpretation of the tender, it was held that the sum tendered covered the pursuer's claim for interest on the principal claim up to the date of the tender. Counsel for the respondent relied on certain comments of the Lord Ordinary in Hodge v British Coal Corporation (No 3) (1992 SLT 1005) on the meaning of section 1(1B). In that case the Lord Ordinary said:

"...it was suggested that the terms of the sub-section recognised the principle that mere excess of the sum awarded over the amount tendered is not conclusive of the question whether the award is 'equal to or greater than an amount tendered'. In my opinion no such principle can be implied from this statutory provision. The sub-section is primarily concerned with the clarification (for the avoidance of doubt) of the question whether a tender expressed in the normal terms is to be held as including an offer to pay any interest claimed by the person to whom the offer is made. The provision that the court may discount part of the interest awarded in determining what is the effect of the tender constitutes a statutory exception to the general rule, which in my opinion confirms the existence of that rule in other respects rather than the reverse." (at p.1006 D-F)

Counsel for the respondent also relied on certain comments of the court in Quinn v Bowie (No 2) (1987 SLT 576) to the effect that the normal rule is that a pursuer who ultimately obtains an award which exceeds the tender is entitled to expenses incurred both before and after the date of the tender.

 

Decision

11. The parties agree that while the court retains ultimate discretion on all questions of expenses in every case, the general rule is that a pursuer who obtains an award greater than the amount of a tender is entitled to the whole expenses of process. That general rule is however abridged by the section 1(1B).
12. Riddell v Lanarkshire & Ayrshire Rly Co (supra) gives us little guidance on the interpretation of the statutory provision in this case, although there is some slight support for the appellants' approach in a dictum of Lord Moncreiff in that case that if the tender had been made before any interest had run, "it might have been argued with much force that the pursuer would not have been entitled to found on any award of interest, which in that case would have been entirely due to the delay caused by his not accepting the tender (ibid, at p. 436)."
13. In Hodge v British Coal Corporation (No 3) (supra), there had been an interim award of damages with the result that the question of interest did not arise. The Lord Ordinary's comments on that question were strictly obiter. We need not analyse those comments in detail. It is sufficient to say that the view that we have taken of the subsection in this case is at odds with the dicta of the Lord Ordinary that we have quoted. We do not agree with those dicta.
14. Quinn v Bowie (No.2) (supra) is distinguishable from the present case. In that case even if the award made to the pursuer had been valued at the date of the tender, the pursuer would still have beaten the tender. The statements to which counsel for the respondent has referred simply restate the general rule. They do not deal with the interpretation of the subsection which is the central issue in this case.
15. The subsection requires us, in considering whether the award of the sheriff in this case was equal to or greater than the amount tendered, to take into account the full amount of the interest awarded on the principal sum. When we do that, it becomes clear that the pursuer's success in relation to the tender was more apparent than real.
16. The concluding words of the sub-section are clearly directed to a case such as this where the value of the award ultimately made exceeds the amount of the tender by reason only of the accrual of interest. If the pursuer had accepted the tender when it was made, she would have been at least as well off as she ultimately was. In our view, it is right to say in such a case that the refusal of the tender unnecessarily prolonged the proceedings to no purpose (cf. Walker, Civil Remedies, at p. 384). These are the circumstances that Parliament seems to have envisaged in enacting section 1(1B). In our view, the decision of the sheriff was well-founded.
17. We conclude therefore that the defenders should be liable for expenses up to the date of the tender and should be found entitled to the expenses of the action from that date, so far as not dealt with by any prior interlocutor. We shall allow the appeal and, in effect, restore the decision of the sheriff.