Apollo Engineering Limited v James Scott Limited (Scotland)

A decision of the Inner House dismissing a stated case without answering the questions of law is distinct from a non-appealable opinion given on a stated case. Where dismissal finally ends the Court of Session proceedings and exhausts the court’s statutory function, it is a judgment on the whole merits of the cause within section 40(1)(a) of the Court of Session Act 1988. An appeal to the Supreme Court is therefore competent without leave of the Inner House.

The relevant cause is the separate process before the Inner House, not the underlying arbitration. Although a prior interlocutory judgment may then be reviewed under section 40(4), it has no independent route of appeal where leave has been refused.

A contractual dispute concerning pipe construction work was referred to arbitration. At Apollo Engineering Ltd’s request, the arbiter stated a case for the opinion of the Court of Session under section 3 of the Administration of Justice (Scotland) Act 1972.

After Apollo became unable to fund legal representation, the Inner House refused to permit its director to represent it: [2012] CSIH 4. A differently constituted Extra Division subsequently dismissed the stated case as incapable of achieving anything useful while Apollo remained unrepresented: [2012] CSIH 88.

The Supreme Court considered whether the dismissal was a judgment appealable without leave under section 40(1)(a) of the Court of Session Act 1988, despite authority establishing that the Court of Session’s opinion on a stated case is not itself an appealable judgment.

1. The proposed appeal was competent without leave. Lord Hope, with whom Lord Clarke and Lord Carnwath agreed, held that Apollo could appeal against the part of the interlocutor of 27 November 2012 which dismissed the stated case.

2. An opinion given by the Court of Session on questions of law in a stated case is not a judgment for the purposes of section 40(1) of the Court of Session Act 1988. That rule, established in John G McGregor (Contractors) Ltd v Grampian Regional Council, did not govern a decision which dismissed the stated case without giving the statutory opinion. Section 3(1) of the Administration of Justice (Scotland) Act 1972 contemplated that the court would answer the stated questions and did not address the course adopted by the Extra Division.

3. The dismissal was final in substance. It disposed of every issue before the Court of Session, ended the stated-case proceedings and left that court unable to retrieve them. Its procedural motivation did not alter its final effect. The relevant “cause” was the separate process before the Inner House, not the underlying arbitration. “Cause” also bore the wide meaning of any proceedings under rule 1(3) of the Rules of the Court of Session 1994.

4. On balance, the dismissal was a judgment “on the whole merits of the cause” under section 40(1)(a), although the Inner House had not answered the substantive questions in the stated case. It was consequently appealable without leave. It was unnecessary to classify the decision as an interlocutory judgment sustaining a dilatory defence and dismissing the action.

5. The earlier refusal to allow the director to represent Apollo was an interlocutory judgment for which leave was required. Since the Inner House had refused leave, there was no self-standing appeal against it. It could be reviewed under section 40(4) only as a prior interlocutor in a competent appeal and where such review was necessary.

6. Any petition of appeal still required certification by two counsel as reasonable. The question was whether the challenge to dismissal raised arguable points of law of general public importance, not whether Apollo’s arguments on the questions stated to the Inner House were reasonable. The court also observed that it would not ordinarily interfere with procedural judgment unless something had gone seriously wrong.

1. United Kingdom Supreme Court: Held unanimously that an appeal against the dismissal of the stated case was competent without leave under section 40(1)(a) of the Court of Session Act 1988.

2. Inner House of the Court of Session: By interlocutor reported at [2012] CSIH 88, refused leave to appeal, rejected the director’s applications to be sisted as a party and dismissed the stated case because its continuation while Apollo was unrepresented would be fruitless.

3. Inner House of the Court of Session: By a majority at [2012] CSIH 4, refused to permit Apollo’s director to represent the company. The court held that Scots law required a company to be represented by an advocate or a solicitor with a right of audience and that article 6 did not require permission in the circumstances.