Sheriff Appeal Court allows res judicata appeal by firm seeking dismissal of action by former commercial agent

About this case:

• Citation:
  [2022] SAC (Civ) 33
• Judgment:
  External link
• Court:
  Sheriff Appeal Court
• Judge:
  Sheriff Principal Turnbull

Pursuer and respondent Hugh Beattie originally raised the action against Gloverall plc seeking compensation under the Commercial Agents (Council Directive) Regulations 1993 for the damage he suffered as a result of termination of the agency. The appellant’s position was that, as decree had already been granted against it in a previous action at Kilmarnock

The appeal was heard by Sheriff Principal Craig Turnbull, Temporary Sheriff Principal Sean Murphy KC and Appeal Sheriff Robert Fife. Davies, advocate, appeared for the appellant and Dempsey, advocate, for the respondent.

Founded on same act

In November 2011, the appellant and respondent entered into an oral agreement whereby the respondent was to be engaged as the appellant’s commercial agent in Scotland. The contract was subject to the same terms as a previous agreement between the respondent and another company, Peter Scott & Co Ltd, which had gone into administration and had some of its assets, including the Peter Scott brand, acquired by the appellant.

By letter dated 15 October 2014, the appellant terminated their contract with the respondent. Following a failed attempt to raise proceedings in Jedburgh Sheriff Court, on 14 January 2020 the respondent obtained warrant to serve an initial writ from the sheriff of North Strathclyde at Kilmarnock, and decree was granted in favour of the respondent after the lodging of a minute of tender and minute of acceptance thereof.

The action that was the subject of appeal was raised in Ayr Sheriff Court and served on 15 January 2020. The cause was remitted to Kilmarnock Sheriff Court after it was held that that Ayr Sheriff Court did not have jurisdiction on the basis that it was where the respondent held his bank account. Before the sheriff at Kilmarnock the appellant maintained pleas of prescription and res judicata. Having heard counsel for the parties in debate the sheriff subsequently repelled those pleas.

Counsel for the appellant submitted that the respondent’s claim was subject to short negative prescription, the claim having become enforceable on the termination of the agency contract in January 2015. Further, the action was founded on the same act that formed the basis of the respondent’s first Kilmarnock action, even if it had been made under a different head of claim, and thus the principle of res judicata applied.

Same subject matter

Delivering the opinion of the court, Sheriff Principal Turnbull said of the argument on prescription: “The initial writ in this action was lodged and served within the quinquennium. The fact that it was lodged at Ayr is immaterial. A transferred cause shall proceed in all respects as if it had been originally brought in the court to which it is transferred. The cause proceeds as if it had been timeously lodged in Kilmarnock Sheriff Court. The appellant’s argument as to prescription is without merit.”

Turning to the argument on res judicata, he observed: “A determination of the issue of res judicata requires the court to determine whether or not the subject matter and the medium concludendi (the point in controversy between the parties) of the two actions are different. The opinion of the Inner House in Smith v Sabre Insurance Company Ltd (2013) is of considerable assistance in determining these issues.”

He continued: “The respondent’s argument conflates the medium concludendi with the subject matter of the action. The distinction the respondent seeks to advance in relation to the subject matter is also misconceived. Two separate heads of claim arose from the subject matter of the present dispute. That is the same position as in Smith – where the initial action was in respect of damages for personal injuries, and the subsequent action was to recover costs consequential upon the damage to the pursuer’s vehicle.”

Sheriff Principal Turnbull concluded: “In the present action the critical questions come to be, looking to the substance of the matter, what was litigated and what was decided in the First Kilmarnock Action and what it was proposed to litigate and decide in the present action. If the answer is that they were the same then the plea has to be upheld and decree of absolvitor granted. In our view, the subject matter and the medium concludendi of both actions are the same. The subject matter was the right of the pursuer to obtain damages from the defender whether by way of reparation or in terms of the 1993 Regulations, and the medium concludendi was the appellant’s termination of the parties’ contract.”

The Sheriff Appeal Court therefore allowed the appeal and assoilzied the appellant from the craves of the initial writ.