Comex Houlder Diving Ltd v Colne Fishing Co Ltd [1987] UKHL 19

UKHL

Comex Houlder Diving Ltd v Colne Fishing Co Ltd

[1987] UKHL 19 · 1987-03-19

LORD MACKAY OF CLASHFERN'S OPINION.—[After the narrative quoted at p. 87 supra his Lordship continued.] The pursuers table three distinct cases in the present action. First, there is a claim for reparation against all the defenders on the basis that the defenders owed a direct duty to Texaco North Sea U.K. Co. and to the pursuers as stated in art. 10 of the condescendence, breach of which is said to have given rise to a right in reparation in the circumstances I have narrated. The second case again against all the defenders is for a contribution from them in terms of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940, sec. 3 (2) and in seeking such contribution they seek not only what is due to them in their own right but also what is due to their cedents in the various assignations to which I have referred. The third case is against the first defenders only and in this the pursuers seek the benefit of the indemnity contained in the agreement dated 9th December 1975 to which I have already referred. The terms of the indemnity are set out so far as relevant to this action in art. 5 of condescendence at pp. 31C to E of the closed record. The case was sent to the procedure roll on the motion of the defenders and I was treated to a most interesting debate in

which a number of questions of considerable importance and difficulty arise. I shall deal with the preliminary pleas in relation to the three distinct cases tabled by the pursuers as they arise and I shall do so taking the cases in the order which I have just set out.

The first case tabled is set out principally in art. 10 of the condescendence although the averments there made have to be read in the light of the other averments relating to the circumstances made in other parts of the record. Article 10 reads:

"The defenders were each aware that Texaco North Sea U.K. Company were operating the rig and that divers instructed by the pursuers were undertaking dives from said rig, and that it was likely that Texaco North Sea U.K. Company and the pursuers, would be adversely affected in the event that they or any of them respectively were negligent in the performance of their duties. The duties owed by each of said defenders were accordingly owed also to the pursuers and Texaco. The respective failure in duties by each of the said defenders caused loss and damage to the pursuers and Texaco as was or ought to have been reasonably foreseeable by each other."

Both defenders strenuously attacked the relevancy and lack of specification of these pleadings. Allan v. Barclay (1864) 2 Macph. 873, (1864) 2 M 873 was referred to where Lord Kinloch said at p. 874:

"The grand rule on the subject of damages is, that none can be claimed except such as naturally and directly arise out of the wrong done; and such, therefore, may reasonably be supposed to have been in the view of the wrongdoer. … The personal injuries of the individual himself will be properly held to have been in the contemplation of the wrongdoer. But he cannot be held bound to have surmised the secondary injuries done to all holding relations with the individual, whether that of a master, or any other."

Reavis v. Clan Line Steamers 1925 SC 725 and particularly the passage from Lord President Clyde at the foot of p. 740 was relied upon. Counsel for the defenders pointed out that in the recent case of Junior Books Ltd. v. Veitchi Co. Ltd. 1982 SC (HL) 244 , in the House of Lords no adverse comment was made on Allan v. Barclay or Reavis although both of these cases had been before the Lord Ordinary (Grieve) as appears from the report of his opinion, 1982 S.C. (H.L.) at p. 252. The speeches in Junior Books were also founded on, particularly the quotation from Lord Wilberforce in Anns v. Merton London B.C.

[1978] AC 728

, pp. 751G to 752A where his Lordship said:

"The position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter—in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise."

It was said that none of the eight factors listed by Lord Roskill, 1982 S.C. (H.L.) at p. 277, were present in this case. Senior counsel for the first defenders particularly focused on the fact that the adverse consequences in the present case appeared to arise from the negligence of the pursuers and Texaco North Sea U.K. Co. He said it would be quite wrong to hold

that the defenders had a duty to take reasonable care to protect the pursuers and Texaco from being sued in consequence of their own negligence.

In reply the pursuers pointed out that Texaco North Sea U.K. Co. were the "owners" in terms of the Offshore Installations (Diving Operations) Regulations 1974 and that it was perfectly foreseeable that in that situation Texaco North Sea U.K. Co. might be absolutely liable in respect of the death of Moore by reason of the failure on the part of the defenders to take reasonable care to perform their various duties to Moore. It was further pointed out that in terms of the indemnity to which I have already referred the first defenders had undertaken to indemnify Texaco North Sea U.K. Co. against loss suffered by that company in consequence of the negligence of the first defenders. The situation so far as the pursuers are concerned was not so plain but again it was suggested that since they were instructing divers in an operation in which the Carbisdale was the safety ship with the responsibility for picking up divers from the water it was reasonably foreseeable that if, for example, by some failure on the part of the pursuers the diver became detached from the rig a failure on the part of the defenders to pick the diver out of the water might cause the diver to perish whereas if the diver was picked up the consequences of the pursuers' own failure alone would mean that he was in the water only for a little longer than he would have been if the pursuers had not been negligent.

I have reached the conclusion that in principle there was sufficient proximity between the pursuers and Texaco North Sea U.K. Co. on the one hand and the defenders on the other hand as involved together in the diving operations from the rig and having responsibilities for the safety of the divers to make it incumbent upon the defenders to take reasonable care to carry out their duties to the divers properly and that if they failed to do so they should have foreseen that in certain circumstances this failure might cause loss to Texaco North Sea U.K. Co. and the pursuers. The phrase "would be adversely affected" is in my view not sufficiently specific in the context adequately to limit the duties in question to duties of care properly owed to the pursuers and Texaco North Sea U.K. Co. Ltd. Senior counsel for the pursuers indicated that in the light of the debate he saw the force of certain criticisms of his averments in this connection but he did not feel inclined to attempt to correct these having regard to the time which the debate had taken and the many other questions that had arisen in it. In these circumstances and subject to anything the defenders may wish to say I think the correct course is for me to give the pursuers an opportunity to amend their pleadings, if so advised, in the light of this opinion. On the basis of the averments as they are at present and for the reason which I have given I should be inclined to sustain the defenders' plea to the relevancy so far as directed against this part of the pursuers' case on the basis that the averments in question are not sufficiently specific.

I now turn to the case made for contribution against all the defenders in terms of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940, sec. 3 (2). Sec. 3 (2) is in the following terms: [His Lordship quoted same and continued thereafter.] The defenders argue that the pursuers have failed to make a relevant case under this provision for four reasons:(1) the pursuers, on their averments, have not "been found liable" since on their averments they settled the action in Pennsylvania in respect of the award on the basis of which they now seek contribution;

(2) if contrary to that submission they have been found liable in the

action in Pennsylvania that is not "in any such action as aforesaid" since that phrase refers to the action of damages mentioned in subsec. (1) and it is clear since this provision extends to Scotland only that the actions of damages referred to in subsec. (1) are actions of damages in the Scottish courts; (3) the person claiming contribution has not relevantly averred a case for this if he alleges that those from whom he seeks contribution are 100 per cent liable for the damages in question since this is inconsistent with the need for him to have been liable to some extent for the damages or expenses in question before he can sue for contribution; (4) since the subsection requires that the person from whom contribution is sought if sued "might also have been held liable in respect of the loss or damage on which the action was founded" he must have been capable of being sued and held liable in the same action as that in which the finding of liability is founded and in the present case the pursuers' averments make it clear that none of the defenders were subject to the jurisdiction of the United States District Court for the Eastern District of Pennsylvania.

I shall take these objections in turn.

(1) The defenders' argument is that the pursuers, having agreed to settle the action in Pennsylvania have not been found liable in the sense of sec. 3 (2). This argument is founded principally on the decision in N.C.B. v. Thomson 1959 S.C. 353. Counsel pointed out that in Corvi v. Ellis 1969 S.C. 312 and again in British Railways Board v. Ross and Cromarty C.C. 1974 S.C. 27 judges had observed that the observations in that case may well justify reconsideration on a suitable occasion but the case had never been re-considered and was binding on me. In considering the extent to which the decision in Thomson obliges me to give effect to this part of the defenders' argument it is I think important to notice that, as Lord Justice-Clerk Thomson points out at p. 363, the situation in Thomson was that there had been settlement by one co-delinquent without proceeding to judgment and the action in Thomson was for one-half of the sum paid in the settlement. The question as the Lord Justice-Clerk put it at the top of p. 364 was this:

"If it is essential to an action of relief by one wrongdoer against his co-delinquent that he should be armed with a decree, obviously the pursuer must fail."

A little lower down he says:

"If the broad principle be that there is contribution among wrongdoers, that should be enough, and it would be pessimi exempli to compel a party to put himself, and incidentally his co-delinquent, to the expense of constituting the debt by fighting to the death a case which might readily be settled."

In considering the argument at the foot of p. 364 the Lord Justice-Clerk says:

"In the Corporation of Glasgow type of case, where one only is sued, while connivance cannot be entirely ruled out, there is a high probability that the judicial determination will be on a satisfactory basis."

At p. 366 near the foot the Lord Justice-Clerk referring to sec. 3 (2) says:

"The National Coal Board might have come under these provisions in various ways. If they had allowed themselves to be sued by Galloway, they could have blamed Thomson. If Galloway had then brought Thomson in, as second defender, the Court could have apportioned blame between the two, and not necessarily on a 50–50 basis. If Galloway had not brought Thomson in, the action would have proceeded against the Board, and if they had been found liable, they would have paid Galloway, and they could have proceeded against Thomson to recover such contribution as the

Court might deem just, which, of course, might have been any proportion. The Board, however, elected to settle and to proceed on that basis against Thomson. That is not a situation expressly covered by the section. They say that the section is not limited in its scope, specifically referring, as it does, only to two situations, but also that subsection (3) expressly reserves rights of relief other than those so specified."

In this connection it will be seen that it was necessary for the Lord Justice-Clerk to consider the terms of the provision which is the basis of this part of the present action. He concludes at p. 367:

"If however, Parliament accepted that constitution of the debt was a necessary preliminary to an action of relief, this anomaly is avoided. If that be so, nothing can be done without the thing being submitted to a Court in one form or another."

And a little later on he says ( ibid ):

"Accordingly, I am reinforced in the view which I had reached as to the pre-1940 position, that constitution of the debt was of the essence of the matter. That view is implicit in the statute and that is why it deals with, and deals only with, actions which have come to judgment."

In Lord Patrick's judgment at p. 373 near the foot he says:

"It would be different if the assignation was of a decree under which the pursuers and the defenders had been found jointly and severally liable in damages to the injured man. In such a case, the assignation would be one of a constituted debt, and the pursuers could found on it to claim payment of part of that debt, as in Palmer's case."

Lord Patrick does not, so far as I can see, go into the question of the extent to which an action must be defended before the decree with which it concludes could be regarded as a finding of liability in the sense of sec. 3(2).

Lord Mackintosh puts the question before the court at p. 375 in these terms:

"The question raised is one of general importance and one which has not so far come up for decision by our Courts, namely, whether in a case arising out of delict or quasi -delict an action at common law for relief to the extent of a pro rata contribution will lie where the payment, made by the pursuer and towards which he seeks the contribution, was made by him under no decree or other enforceable order."

A little later, on the same page, he says:

"In my opinion, the principle at the foundation of an action of relief at common law is that the pursuer of such an action has discharged a debt which was to some extent the proper debt or liability of another. The action in my view is devoid of the foundation which our law has so far always insisted upon if the pursuer is unable to say that the payment which he made and towards which he seeks contribution from another was at the time when he made it a debt due by him, i.e. , had been constituted by decree or some equivalent proceeding as a debt enforceable against him."

It was interesting to note that in putting forward the respective arguments on this aspect of the case counsel for the first defenders and counsel for the second and third defenders diverged in whether a decree in absence would be sufficient to constitute a finding of liability in the sense of the subsection, counsel for the first defenders contending that a decree in absence was sufficient while counsel for the second and third defenders contended that a finding of liability could only result if the action were defended and the pursuer in the action put to his proof on every issue of fact essential to the defenders' liability. Counsel for the second and third defenders submitted that certain concessions might be permissible, for example, to agree that a document was a copy letter and equivalent to the

principal might be allowable if the defender was able to establish in the subsequent action of relief, if challenged, that the pursuer in the original action would have had no difficulty in proving the point conceded although at some additional expense. Counsel for the pursuers contended that on their averments in the present case the debt had been judicially constituted and that this was sufficient in the light of the decision in Thomson .

I have reached the conclusion that the decision in Thomson does not oblige me to give effect to the defenders' contention in the present case. The pursuers aver, as I already indicated, that the court in Pennsylvania gave judgment against Texaco North Sea U.K. Co. in the sum of $50,000 and against the Comex Companies including the pursuers for the balance of $184,000 each party being obliged to pay its own costs. So far as the principal sum is concerned it appears to me that the debt was constituted as to $50,000 against Texaco North Sea U.K. Co. and as to $184,000 against the four Comex Companies. No separate point was taken on costs but since the defendants were not found liable to the claimant in costs I consider that the costs in question are not covered by the pursuers' argument and that they have not been found liable in these costs in the sense of the subsection. So far as the principal is concerned, however, in my opinion in view of the judgment of the court the debt had been constituted by decree or some equivalent proceeding as a debt enforceable against the pursuers and Texaco, to use Lord Macintosh's expression at the foot of p. 375 in Thomson's case. I do not regard Thomson as deciding that it is necessary that the decree by which a party should be found liable should result from a fully contested action or an action "fought to the death." The passage in which the Lord Justice-Clerk refers to an action being fought to the death is one where he is narrating the argument for the pursuers and he deals with that. But the essential point to which he arrived was that constitution of the debt should be necessary and in my opinion that simply means that decree of the court is necessary to found the action. I think it is noteworthy that where the Lord Justice-Clerk is dealing at p. 362 with the case of Palmer he says this:

"The House proceeded on the view that the vital thing was the joint and several decree and that it was therefore unnecessary to trouble with what had led up to the decree."

The difficulty of a satisfactory definition of what more than a decree is required is illustrated by the divergence in position taken up in argument by the first defenders on the one hand and the second and third defenders on the other. In my view however, it would be going beyond the ratio of the decision in Thomson to stipulate for anything more than a decree of court or some equivalent proceeding as a result of which the debt in question is enforceable against the person seeking contribution. I should mention that I was referred in some detail to the corresponding law in England as it was under the Law Reform (Married Women and Tortfeasors) Act 1935 sec. 6 and the case of George Wimpey and Co. v. B.O.A.C. [1955] A.C. 169 and also to Stott v. West Yorkshire Road Car Co. Ltd. [1971] 2 Q.B. 651. That statutory provision has now been replaced by the Civil Liability and Contribution Act 1978. Section 1 (4) of that Act now recognises that an action of contribution may be based upon a payment made in bona fide settlement or compromise of a claim without regard to whether or not the person seeking contribution himself is, or ever was, liable in respect of the damage. I find it interesting to know how the comparable area of law had developed in England but it does not affect my conclusion upon the Scottish statutory provision.

(2) The second argument on this aspect of the case is that the pursuers fail because the decree on which they found is not a Scottish decree. The pursuers while accepting that sec. 3 as a whole extended to Scotland only submitted that in a foreign court the extent of the responsibility of a delinquent in respect of a delict or quasi -delict committed in Scotland might arise and need to be determined in the light of sec. 3 (1) and thus sec. 3 (1) might become relevant in actions which were not Scottish actions. While I agree this is possible I consider that the reason would not be that the foreign action would be included in the phrase "any action of damages" but rather that in virtue of the rules of private international law which the foreign court used it would have to consider what decision would be taken by a Scottish court if the question had arisen in that court and thus would require to look at sec. 3 (1) because it would be the basis on which the Scottish court would proceed. I am of opinion, therefore, that sec. 3 (1) applies only to actions of damages raised in a Scottish court.

Where in subsec. (2) the phrase "in any such action as aforesaid" occurs the pursuers submit that the words "as aforesaid" send one back to sec. 3 (1) for the description of the action and that if one is to read out fully the result of that reference back the phrase will become:

"in any action of damages in respect of loss or damage arising from any wrongful acts or negligent acts or omissions."

If this way of looking at the matter is taken subsec. (2) then becomes self-contained and there is no reason to limit the actions considered in subsec. (2) to actions in Scotland since subsec. (2) could extend to Scotland only and yet embrace contribution in respect of awards made elsewhere. No decision relevant to this question was quoted in the debate, the matter being one of construction of this particular statute. The defenders maintained that to allow the action in Pennsylvania to be covered for the purposes of subsec. (2) would create a great injustice. The defenders had kept clear of the jurisdiction of the court in Pennsylvania according to the pursuers' averments and yet the pursuers were seeking to subject them to a level of award of damages which was likely to be much higher than the corresponding award in the Scottish courts. The pursuers countered this argument by pointing out that the contribution which the court might deem just was not restricted to an apportionment on the basis of degree of culpability of the award actually made in Pennsylvania. If the court deemed it just it could order a contribution to part only of the award in America on the view that it was excessive by Scottish standards and that it would be just to order the defenders to bear only some proportion of an award which would be regarded as appropriate in the Scottish courts. The language of the provision is certainly very wide and would enable the court, in my view, to do justice between the parties having regard to all the circumstances and therefore I do not consider the arguments advanced on the basis of injustice have a great deal of force in relation to the construction of this subsection. The defenders also pointed out that the action being defined as arising from any wrongful acts or negligent acts or omissions must have in mind a Scottish action and the Scottish law which prescribes the conditions under which acts are wrongful or acts of omissions are negligent. I think it is true that it would have to be seen that a foreign action did arise from acts which the law of Scotland would regard as wrongful or acts or omissions which the law of Scotland would regard as negligent before the action could answer the description required to fall within subsec. (2) but this does not appear to me to rule out the action in Pennsylvania in this case for the pursuers'

description of it would, I think, enable the court to hold that it was an action of damages arising from acts or omissions which the court in Scotland could hold were negligent.

Subsection (1) of sec. 3 does not expressly restrict the actions of damages to which it refers to actions in the Scottish courts and while it is true that since the provision extends to Scotland only the only actions of damages to which it will directly refer are actions of damages in the Scottish courts, I do not consider that this is a sufficient reason for carrying forward to subsec. (2) a restriction on the actions therein referred to to those raised in Scotland. I regard the way advanced by the pursuers as the correct way to read subsec. (2). Since Parliament has not expressly restricted the actions of damages in question to actions in the Scottish courts there seems to me to be no reason for limiting the actions in question to Scottish actions by implication. I therefore reject this part of the defenders' argument.

(3) The third objection is that the pursuers here do not aver or accept that they were liable to any extent for the damages on which the action is based. I consider that the averments read as a whole do carry the implication that the pursuers were advised that they were likely to be found liable and that the mere fact that they seek contribution at the level of 100 per cent is not inconsistent with them having a liability to Mr Moore's widow on the basis of some form of absolute liability. In any event in my view the pursuers have sufficiently averred that they were found liable for the damages in question and this is sufficient to enable them to raise the present action. It was also suggested that on the pursuers' averments this payment was truly a voluntary payment and reference was made to Ovington v. McVicar (1864) 2 Macph. 1066. However, on the basis of the pursuers' averments at p. 22 A–D I cannot regard the payment as a voluntary one. I refer to Lord Macintosh's opinion in Thomson at p. 375. In any event, since the payment was made in consequence of the court's judgment I do not consider it could properly be regarded as voluntary.

(4) The fourth objection is founded upon the word "also" in subsec. (2). This word certainly suggests that the person seeking contribution and the person from whom he is seeking contribution must together have been liable in respect of the loss or damage on which the action in which the person seeking contribution was found liable was founded. But, as I have said already the pursuers have sufficiently averred that they were found liable in that action and the basis on which they seek contribution is that the pursuers were also responsible for acts or omissions which caused the death of Mr Moore and the consequent loss and damage to his widow and her children. It was further argued that the word "also" required that the person from whom contribution was sought could have been held liable in the same action as that in which the person seeking contribution had been held liable before the action of contribution is properly founded. Junior counsel for the pursuers pointed out that this would have a very strange effect, if, for example, a pursuer decided to sue in Glasgow sheriff court one co-delinquent who was subject to the jurisdiction of the sheriff in Glasgow while the other co-delinquents were not subject to the jurisdiction of the sheriff in Glasgow although they were subject to the jurisdiction of the Court of Session. In my view it is to read an additional requirement into the words of the section to require that in addition to being held liable in respect of the loss or damage for which the person seeking contribution has already been found liable to require that the liability on

the person against whom contribution is sought could have been established in the same action.

I therefore reject all four heads of argument taken against the relevancy of the pursuers' action so far as based on contribution against both defenders in the present case.

The first defenders take an additional point founding on absence of jurisdiction. The pursuers found jurisdiction against the first defenders on the basis of the Law Reform (Jurisdiction in Delict) (Scotland) Act 1971. They agree that one has to examine each of the cases they table against the first defenders to see whether jurisdiction is properly established against the first defenders in relation to that case. I must therefore consider whether that Act confers jurisdiction on this court in relation to the action against the first defenders founded on sec. 3 (2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940. Counsel for the first defenders pointed out that for this court to have jurisdiction to deal with this part of the case the pursuers would have to show that it was founded on delict and that delict must form the cause of action. Counsel submitted that these qualifications would be met only if the action in which the remedy was sought arose by virtue of an act or omission which constituted a breach of duty of care owed to the person seeking the remedy. Counsel pointed out that delict was a concept of the common law of Scotland and submitted that accordingly it was to be distinguished from any liability based upon statute. Counsel referred to Robertson v. Bannigan 1965 S.C. 21. On of the questions in that case was whether the action fell within the category of "all actions founded on delinquency or quasi delinquency of any kind", in terms of sec. 28 of the Court of Session Act 1825. At p. 23 Lord Hunter said:

"and in form the present action … is plainly an action based on delict. The conclusion, the condescendence (in particular article 7) and the pursuer's first plea-in-law are sufficient to demonstrate this."

When the case went to the Inner House Lord Strachan did not find it necessary to decide this question. Lord Wheatley did discuss the question and at p. 31 he said:

"The pursuer's action, unchallenged in form, is based on delict, in respect that the defender by his negligence failed to perform this duty. The defender for the purposes of the present action accepts liability for any loss injury and damage sustained by the pursuer as a result of that negligence. I, therefore, reject the contention that this is in substance and effect an action for breach of contract, and thus not an enumerated cause."

Although he does not expressly say so I take it that his Lordship was approaching the question of whether or not the action was in form an action based on delict in the same way as Lord Hunter had approached it. Counsel also referred to the decision of the Privy Council in Distillers Co. (Biochemicals) Ltd. v. Thompson

[1971] AC 458

in which the judgment of their Lordships was delivered by Lord Pearson. At p. 466 he enunciated three possible theories as to the meaning of the requirement "that there is a cause of action which arose within the jurisdiction" for the purpose of sec. 18 (4) ( a ) of the Common Law Procedure Act 1852. The third of these was that the act on the part of the defendant which gives the plaintiff his cause of complaint must have occurred within the jurisdiction and after considering the matter this is the theory which commends itself to their Lordships. Counsel for the pursuers submitted that proceedings are founded on delict and delict forms the cause of action if the right which the pursuer seeks to enforce arises from or is created by the law of delict, that is to say the law which governs liability for delictual acts and omissions

and that one should approach the question by asking why is a particular defender being convened to answer a particular case. If the answer is because he has participated in a delict or quasi -delict then the action will be founded on delict and delict will form the cause of action.

In my view the formulation submitted by counsel for the pursuers that proceedings are founded on delict and delict will form the cause of action if the right which the pursuers are seeking to enforce arises from or is created by the law of delict when extended to include quasi -delict is adequate for the purposes of the present case and I am content to proceed upon it. The first defenders contended that the pursuers contribution case with which I am presently dealing is not founded on delict but on statute. It is true that the foundation is the statutory provision of sec. 3 (2) of the 1940 Act but in my view this is an act which alters responsibility for wrongful acts or negligent acts or omissions. What it did on a reasonable view of the matter was to alter the pre-existing law of delict to the extent of making changes in that liability but in my view what is left after these changes can be regarded as delictual liability. I am fortified in this view by the manner in which the Lord Justice-Clerk in the case of N.C.B. v. Thomson , to which I have already referred, passed to a consideration of the 1940 Act which he describes at p. 365 as an act "which introduced a fundamental change into our conception of delictual liability." I am accordingly of opinion that the liability created to contribute by sec. 3 (2) of the 1940 Act is a liability in delict and that an action which seeks to enforce that liability is an action based on delict and is an action which has delict as its cause of action. I think this conclusion is also supported by considering subsec. (1). Supposing two defenders convened by a pursuer who had been injured in consequence of their joint negligence in reliance upon the jurisdiction conferred by the 1971 Act. Undoubtedly the action so far as laid by the pursuer against each of the defenders would be based on negligence and negligence would form part of the cause of action. However, if the first defenders' argument is correct the attempt to ask the court to make a finding on the contributions of the defenders inter se would not be based upon delict and the result would be, if the first defenders are correct, that the court would have no jurisdiction to consider the question of contribution by the defenders inter se . Whether this would be right or not I am satisfied that the law regulating contribution inter se of co-delinquents is to be regarded as part of our law of delict and quasi -delict and accordingly that this part of the pursuers' case is founded on delict and has delict as its cause of action and that accordingly this Court has jurisdiction in terms of sec. 1 of the 1971 Act to entertain it.

Finally I turn to the third case tabled by the pursuers which is against the first defenders only. This case is based upon the indemnity to which I have already referred granted by the first defenders to Texaco. The pursuers sue as assignees of Texaco both in this case and also in relation to the first two cases which I have considered in so far as they relate to the sum paid by Texaco under the judgment of the court in Pennsylvania. In relation to all the cases in which the pursuers sue as assignees of Texaco the first defenders submit that in consequence of certain correspondence passing between the London solicitors for the first defenders and the London solicitors for Texaco, Texaco discharged the rights of action to which the assignations relate on which the pursuers are founding as assignees of Texaco in the present action and that this was done before the first defenders received intimation of these assignations, which intimation was not given prior to the

raising of the present action and indeed it appears that the documents constituting the assignation were not lodged in process until the day before the procedure roll hearing began. The question of whether this correspondence has the effect for which the first defenders contend has already been considered in the High Court of Justice in England by Jupp J. and I have a transcript of his judgment dated 3rd February 1983 in which he held that the first defenders' contention was established. I have been favoured with a considerable citation of authority on this matter and have been invited to decide the case on the basis of Scots law although the draft agreement in the correspondence provides that English law would apply to it. The reason I am asked to proceed on this basis is that there is no allegation in the pleadings that English law applies nor that English law in this matter is different from the law of Scotland. In summarising the authorities I cannot do better than quote from Lord President Cooper's opinion in Stobo Ltd. v. Morrisons (Gowns) Ltd. 1949 SC 184 at p. 192:

"The only rules of Scots law which it appears to me to be possible to extract from past decisions and general principles are that it is perfectly possible for the parties to an apparent contract to provide that there shall be locus poenitentiae until the terms of their agreement have been reduced to a formal contract; but that the bare fact that the parties to a completed agreement stipulated that it shall be embodied in a formal contract does not necessarily import that they are still in the stage of negotiation. In each instance it is a matter of the construction of the correspondence in the light of the facts, proved or averred on which side of the borderline the case lies. I refer in support of these rules to the weighty pronouncements of Lord Wensleydale in Chinnock v. Marchioness of Ely (1865) 4 DeG, J. & Sm. 638, of Lord Chancellor Cairns in Rossiter v. Miller (1878) 3 App. Cas. 1124 at pp. 1137 and following, and of Lord Chancellor Finlay in Gordon's Exors. v. Gordon 1918, 1 S.L.T. 407."

It is interesting that the only authority on which Jupp J. expressly relied in his decision on this point was the case of Rossiter although it is the speech of Lord Blackburn in particular from which he quotes. The best passage for the pursuers from the authorities was said by their senior counsel to be from the case of Gordon's Exors. in the speech of Viscount Haldane at p. 411. Since I regard the passage in Viscount Haldane's speech as very relevant to the question I have to decide I set it out in full:—

"In a case such as the present it would of course have been open to those concerned to reach a definite and concluded agreement in conversation or by correspondence. Such an agreement is not the less a real one if the parties have, as part of its terms, stipulated that there is to be a further agreement embodying its substance and also other terms which they are subsequently to settle. In such a case the later agreement, when concluded and executed, will supersede the earlier one. But until then the earlier agreement stands and binds. As I have said, the parties may contract in this fashion. But when they desire to do so they must make the intention plain of closing the negotiation in its first stage by a completed bargain. For if it appears that they have negotiated with the view of not stopping there, but of proceeding to embody the result in a written instrument, it is presumed that, until they have all duly executed that instrument, the point has not been reached at which an agreement enforceable by law was to be the outcome. This presumption is one of intention and yields to definite expression of intention to the contrary if such exists. But apart from such an expression of contrary intention it is not legitimate to infer that the parties meant to stop short of what they have shewn that they set out to do, any more than it

is legitimate to pick out letters from a continuous correspondence, and abstracting from the sequence and the character of the correspondence as a whole, to fix the parties by particular letters, however apparently definite, at which they have not made it plain that they intended to pause. In both cases the question is, What does the evidence disclose as the object aimed at, and what was the series of steps meant by those concerned to be taken as preliminary to full finality in the process of binding themselves? To answer this question it is always necessary to look as a whole at the series of steps actually taken, and to avoid inferences based on anything short of the entirety of the process. I think that this is what the numerous authorities in the books may properly be looked on as having laid down. In substance it signifies that here as elsewhere the truth is the whole and nothing short of the whole."

With that judgment Lord Shaw of Dunfermline expressed his entire agreement [at p. 411].

With this guidance in mind I note that the first letters from Messrs Kennedys, the London solicitors for Texaco dated 12th May 1981 to the London solicitors for the first defenders states that their American professional clients do not wish to proceed further in the English jurisdiction and that they had instructions to abandon the Queen's Bench action if the first defenders for their part agree to bear their own costs to date and they invite Messrs Constant and Constant to take instructions. Messrs Constant and Constant reply on 14th May confirming that they were taking their clients' instructions and that Texaco's offer was intended to relate to the Scottish proceedings as well as the English. On 13th July Messrs Constant and Constant reply heading their letter without prejudice as Messrs Kennedys had done when they initiated the correspondence stating that:

"We are glad to confirm that our clients are agreeable to settle the outstanding causes of action as per the agreement enclosed herewith. Kindly execute the agreement on behalf of your clients if the same meets with your approval and return it to us in due course, whereafter we will forward you a further copy duly executed by both parties."

A draft formal release was enclosed. Messrs Kennedys replied on 17th July making no reference to without prejudice but suggesting a new paragraph for the draft agreement. It concludes:

"We should be obliged if you would consider the suggestion and, if you agree, let us have a copy of the agreement for execution."

Messrs Constant and Constant replied on 11th August with a draft of the formal release incorporating Messrs Kennedy's suggestions. The letter concludes:

"Kindly return same to us duly executed at your convenience."

It is clear that by the letter of 11th August Messrs Constant and Constant accepted the suggestion for amendment of the draft formal release that had been suggested by Messrs Kennedys and that accordingly the draft formal release was now in a form acceptable both to Messrs Constant and Constant and to Messrs Kennedys. However, I regard it as plain that Messrs Constant and Constant intended that the agreement between their clients which was to be legally binding was to be the formal release of which the terms of the draft had been agreed. I see nothing in the correspondence to suggest that Messrs Constant and Constant intended the legally binding agreement to be anything other than the duly executed form of release. It appears to me that there is nothing in the correspondence to suggest that either solicitor had understood that any agreement was to be legally binding between them except the formal agreement to be executed whose terms they were settling. It seems to me that the letter of 13th July if it was an offer was an offer to be accepted in the manner stipulated, that is to say by execution of the

formal release. The letter of 17th July from Kennedys does not in my view displace the idea that the legally binding contract which the solicitors had in view was to be the formal release duly executed when it indicates in detail further terms which it proposes should be added to the formal release and in particular it does not supersede the need for execution before the agreement became legally binding which appears to me to be conveyed by the letter of 13th July. If this view is right it means I think that strictly speaking Messrs Constant and Constant's letter of 17th July 1981 was not a counter-offer in the sense of a document intended to be legally binding if accepted but rather a letter indicating to the agents on the other side the terms to which their clients were prepared to become bound by execution of a formal agreement in these terms. I therefore differ from the conclusion of Jupp J. on this matter. The principal reason that I have reached the opposite conclusion to his on this question is that in my view final mutual assent as spoken of by Lord Blackburn in Rossiter v. Miller [at (1878) 3 App. Cas. p. 1151] means mutual assent to be bound in law. For the reasons which I have given in my view the solicitors were proceeding upon the understanding that the binding legal obligation would be consented to in the form of execution of the formal release in the terms satisfactory to both parties. For these reasons I am of opinion that the correspondence did not deprive Texaco of the right to pursue the indemnity against the first defenders and that accordingly the pursuers, as their assignees, are still entitled to insist upon it. This means also that the pursuers, as assignees of Texaco, are entitled to insist on the other parts of their case so far as founded on assignation from Texaco.

The last matter to be considered in relation to the case based on the indemnity is whether or not jurisdiction to entertain it is conferred upon this court by virtue of the Act of 1971. I have already dealt with the arguments on construction of that statute which were adduced by the competing parties. On the formulation which seems to me appropriate the present case fails in respect that the right which is being enforced does not arise from delict or quasi -delict. It is true that the damages claimed for which indemnity is provided under the contract of indemnity are damages arising from such a foundation but the action itself is in my view founded upon the contractual obligation of indemnity and not upon the law of delict. This appears to me to be clear both from the wording of the pursuers' first declarator and their first plea-in-law. Adopting the approach suggested in Robertson v. Bannigan 1965 S.L.T. 66 of examining the condescendence and pleas-in-law in support of this case it appears to me to be plainly founded upon the contract of 9th December 1975 referred to in art. 5 of the condescendence and accordingly jurisdiction to entertain this action against the first defenders on this ground is not conferred by the 1971 Act and there is no other jurisdiction.

As a consequence of my view relating to the pursuers' averments in art. 10 of the condescendence, I think it appropriate to put the case out by order to give the parties an opportunity to make any submissions which they may wish to put forward. Subject to this the result of the views indicated above is that I should sustain the first defenders' plea of no jurisdiction so far as it relates to conclusion 1 and the first plea-in-law for the pursuers and dismiss the action so far as laid upon that ground repelling plea 1 for the pursuers. In view of my view on the effect of the correspondence between the London agents for Texaco and the first defenders in 1981 pleas 2 and 9 for the first defenders would fall to be repelled. As the result of my view on the construction of sec. 3 (2) of the Act of 1940 plea

5 for the first defenders would fall to be repelled. With regard to plea 6 for the first defenders I am disposed to give the opportunity to the pursuers to consider amending their pleadings in respect of the case of fault made in art. 10 of the condescendence. If no amendment were made I would be disposed to sustain the first defenders' 6th plea so far as directed against the averments relating to them. I would allow a proof before answer on the case relating to contribution under the Act of 1940 reserving the first defenders' 6th plea in this connection.

With regard to the pleas-in-law for the second and third defenders the first plea raises no substantial matter not covered by later pleas now that the documents on which the pursuers' title as assignee rests have been lodged in process. Plea 2 falls to be repelled. Plea 3 will be sustained so far as relating to the averments in art. 10 of the condescendence are concerned unless the pursuers move to amend. So far as the plea relates to the case for contribution under the Act of 1940 a proof before answer would be appropriate reserving the plea. A question was raised upon whether it was competent for the pursuers to ask for their plea no. 6 to be sustained to the extent of repelling plea 13 on the ground that there are no relevant averments to support it in the pleadings of the second and third defenders. Strictly speaking plea 13 for the second and third defenders does relate to a matter of quantum and therefore plea 6 for the pursuers does not apply to it. In any event as a practical matter I think it would be right to leave plea 13 standing. This plea having been tabled gives, in my opinion, in the circumstances of the present case sufficient notice to the pursuers that the second and third defenders intend to put the limitation of liability under sec. 503 of the Merchant Shipping Act 1894 in issue in the case and it is right to allow it to stand at this stage. Of consent pleas 3 and 4 for the first defenders fall to be repelled and otherwise in so far as I have not mentioned pleas in the concluding paragraphs of this opinion it would be appropriate that they should be reserved to be disposed of after the proof before answer which I intend to allow.

The defenders reclaimed to the Inner House of the Court of Session. The reclaiming motion was heard by the First Division, comprising the Lord President (Lord Emslie), Lord Grieve and Lord McDonald on 11th, 12th, 13th and 14th March 1986. On 14th March 1986 their Lordships made avizandum .

At advising, on 8th April 1986 their Lordships adhered to the Lord Ordinary's interlocutor of 21st September 1984 and refused the reclaiming motion.

LORD PRESIDENT (Lord Emslie).—[After setting out the facts his Lordship continued.] In this action the pursuers sue the defenders in their own right and also as assignees under the assignations to which I have referred. They tabled three distinct cases.

Their first case was a claim for reparation against all the defenders on the basis that each of them owed duties of care to Texaco and the pursuers themselves. This case need not be noticed further because the averments in support of it were deleted by amendment after the Lord Ordinary issued his opinion following a debate in procedure roll. Unfortunately nothing was then done about the second conclusion of the summons to which the deleted averments were directed and we have, of consent of the defenders, allowed the pursuers to lodge a minute of amendment to tidy up their conclusions as the result of the disappearance of their first case against the defenders.

The second case for the pursuers was directed against the first defenders only

and in this they sought to enforce an indemnity granted by the first-named defenders in their agreement with Texaco. I need say no more of this case since the Lord Ordinary held that the Court of Session had no jurisdiction over the first-named defenders in the action founded upon the indemnity because the provisions of the Law Reform (Jurisdiction in Delict) (Scotland) Act 1971 upon which alone the pursuers relied in seeking to found jurisdiction against the first-named defenders afford jurisdiction against foreign defenders only in actions founded on delict and in which delict forms the cause of action. The pursuers have accepted the Lord Ordinary's judgment upon this matter.

The third case for the pursuers was for contribution by all the defenders in terms of sec. 3 (2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940. Omitting subsec. (3), sec. 3 of that Act provides as follows:—[His Lordship quoted sec. 3(1) and

(2) and continued thereafter.] The averments are that the death of Moore was caused by fault on the part of each of the defenders.

In procedure roll all the defenders argued that the pursuers had failed relevantly to bring themselves within the provisions of sec. 3 (2) for four reasons:—(1) the pursuers, on their averments, have not been "found liable" since on their averments they settled the action in Pennsylvania; (2) if contrary to that submission they have been found liable in the action in Pennsylvania that is not "in any such action as aforesaid" since that phrase refers to the action of damages mentioned in subsec. (1) and it is clear since this provision extends to Scotland only that the action of damages referred to in the subsection are actions of damages in the Scottish courts; (3) the person claiming contribution has not relevantly averred a case for this if he alleges that those from whom he seeks contribution are 100 per cent liable for the damages in question since this is inconsistent with the need for him to have been liable to some extent for the damages or expenses in question before he can sue for contribution; (4) since that subsection requires that the person from whom contribution is sought if sued "might also have been held liable in respect of the loss or damage on which the action was founded" he must have been capable of being sued and held liable in the same action as that in which the finding of liability is founded and in the present case the pursuers' averments make it clear that none of the defenders were subject to the jurisdiction of the United States District Court for the Eastern District of Pennsylvania.

The Lord Ordinary for the reasons which he gives in his opinion rejected this argument in each and all of its branches. He also rejected a separate submission of no jurisdiction in relation to the sec. 3 (2) case in so far as it was directed against the first-named defenders. The submission for the first-named defenders was that the action was not "founded on delict" within the meaing of sec. 1 of the Law Reform (Jurisdiction in Delict) (Scotland) Act 1971 and that "delict" within the meaning of that section did not form "the cause of action." In the result the Lord Ordinary, after dealing with a number of other submissions which are now of no importance, sustained and repelled the appropriate preliminary pleas and sent the pursuers' sec. 3 (2) cases to proof before answer.

In this reclaiming motion for the defenders the first-named defenders renewed their submission of no jurisdiction in relation to the sec. 3 (2) case made against them and it is convenient to deal with this submission first. The argument was that the action was not "founded on delict" but was one for contribution under sec. 3 (2). The alleged wrongful acts and omissions of the first-named defenders

do not form "the cause of action." The only relevant wrongful acts or omissions (or delicts) for the purposes of sec. 1 of the Act of 1971 are those involving breaches of duty owed directly to the pursuer concerned. Only a victim of delict can found jurisdiction against a foreign defender in the Court of Session. In my opinion this argument is misconceived. The entire foundation of the pursuers' case against the first-named defenders is delict. Sec. 3 (2) merely provides a remedy available to one delinquent in certain circumstances if and only if it is established that the persons against whom the action is brought were co-delinquents. There is no language in sec. 1 of the 1971 Act which limits its application to proceedings taken by the victim of delict or by a relative of his if the result of the delict is his death. For these reasons I am entirely satisfied that the pursuers' case against the first-named defenders is "founded on delict" within the meaning of sec. 1 and that delict in Scotland forms the primary cause of this action. In any event I find myself wholly in agreement with, and gratefully adopt, the Lord Ordinary's reasons for holding that the liability to contribute created by sec. 3 (2) of the 1940 Act is a liability in delict and that an action which seeks to enforce that liability is an action based on delict and has delict as its cause of action.

All the defenders joined forces in criticising the Lord Ordinary's disposal of the attack made upon the pursuers' cases against them in reliance upon sec. 3 (2) of the 1940 Act. Although they no longer insisted in the third ground of objection on which they had relied in the Outer House their submission was that on their averments the pursuers were not entitled to the benefit of sec. 3 (2) in a question with the defenders for three reasons. The Lord Ordinary erred, they said, in allowing the sec. 3 (2) cases to go to proof before answer.

Their first proposition which involved in a more limited form a renewal of the submissions which the Lord Ordinary rejected, was that the pursuers and their cedents had not been "found liable" within the meaning of sec. 3 (2). The judgment of the American court against them was pronounced after the parties had agreed to settle the action at the instance of Mrs Moore and her children and was accordingly not one which satisfied the requirements of sec. 3 (2). According to the defenders sec. 3 of the Act is dealing with rights of relief. The essence of such a right at common law is that there is a constituted debt of a sum certain, for which the delinquent who pays the debt and all other co-delinquents are liable jointly and severally. What is required to constitute the debt for the purposes of sec. 3 (2) is a decree of court making an award to the injured party. The sum awarded is the measure of the joint liability. It is, accordingly, essential that the sum to be paid to the pursuer, who sues one of several co-delinquents for loss or damage arising from wrongful acts or negligent acts or omissions, should be assessed by the court itself after full inquiry. In order that a delinquent may assert that he has been "found liable" within the meaning of sec. 3 (2) there must be a finding quantifying the loss and damage complained of which will be conclusive as to the amount of the claimant's loss. Although a decree pronounced upon an admission of liability may be within the ambit of sec. 3 (2) so long as the injured party's claim has been quantified by the court itself, a decree proceeding upon a joint minute of settlement or upon the acceptance of a judicial tender will not suffice, for it does no more than to give effect to a settlement which cannot be distinguished from a settlement arrived at before litigation has been begun. The critical requirement of sec. 3 (2) is the judicial measurement of the common

obligation of co-delinquents to the injured party because sec. 3 (2) is concerned with apportioning the liability of all co-delinquents in a situation in which one only has been sued to judgment. If quantum is not so established there would be difficult practical problems in carrying out the exercise of apportionment envisaged by the subsection. In presenting this argument counsel for the defenders contended, as they had contended in the Outer House, that support for their construction of sec. 3 (2) was to be found, first, in Parliament's departure from the language of sec. 6 of the Law Reform (Married Women and Tortfeasors) Act 1935 which did not extend to Scotland, which has now been replaced by the Civil Liability and Contribution Act 1978, and, second, in the observations of the judges in the majority in the case of N.C.B. v. Thomson 1959 S.C. 353 which, it was said, fell to be understood as declaring that for the purposes of an action of relief by one co-delinquent against another the quantum of the injured party's claim must have been established to the satisfaction of the court. Lest it should be thought that the defenders' construction is in some way unfair to one delinquent who has settled an action in order to save expense or who has lodged a tender which has been accepted by the claimant, such a delinquent has another remedy, if he wishes to seek relief from co-delinquents, because he can always take an assignation from the claimant of his rights against these co-delinquents.

The argument for the defenders has, I fear, not convinced me at all that the Lord Ordinary erred at all in holding that it is not necessary for the purposes of sec. 3 (2) that the decree against the delinquent seeking to found upon the subsection should have been pronounced in an action "fought to the death" upon the matter of quantum of damages. I entirely agree with the Lord Ordinary that, for the reasons which he gives in his opinion, consideration of the English statutory provisions which fall to be read against the very different background of the English common law, affords no assistance in solving the problem of construction of sec. 3 (2). I also agree with him, again for the reasons which he gives in his opinion, that the dicta in N.C.B. v. Thomson upon which the defenders relied do not compel one to give effect to the defenders' construction of the words "found liable" in sec. 3 (2). That case was not concerned at all with the question of what kind of decree against one delinquent is required before he may seek relief against co-delinquents at common law. It was concerned only with the question whether if one delinquent has settled an injured party's claim for reparation under threat of litigation it is open to him to seek relief thereafter from other alleged co-delinquents. In any event, so far as the common law is concerned, under which, if relief was available, it was for a pro rata share of the liability to the injured party, it is far from clear that a necessary pre-requisite of the action of relief was a decree pronounced by the court after full inquiry. For example, in Duncan's Trs. v. Steven (1897) 24 R. 880 Lord President Robertson said this at p. 883:

"I am well aware that in practice it is sometimes an anxious question what a man should do who being sued for damages—(and of course my remarks apply to questions of damages)—does not think that he is liable (but is not sure), but at all events feels confident that if he is legally liable the ultimate liability rests with another. My judgment today does not in the least suggest that, in such cases, notice should not be given of the claim or such further invitation as is not unusual for concerted opposition to the claim. But in order to save such a right of recourse, it is not necessary to come into Court with a claim of relief of damages until liability is either admitted or established, and if anyone comes into Court with a premature

action, his having an intelligible motive for doing so cannot exempt his action from the fate which attends irrelevancy."

In Central S.M.T. Co. v. Lanarkshire C.C. 1949 S.C. 450 Lord Keith observed [at p. 460]:

"The case of Duncan's Trustees v. Steven was cited by the defenders to show that the Court would not entertain an action of relief until liability in the principal action had been settled. The conclusions in that case were petitory, not declaratory, and it is not clear to me that the pursuer had any interest to raise the action until his liability had been admitted, or established in the principal action."

In my opinion, further, the foundation of the action of relief is not that the injured party's loss and damage have been judicially assessed and determined at a particular sum. "The claim of relief rests … upon the fact, as Lord Bankton puts it, that by the use of [one obligant's] money, the rest [that is ‘the other obligants’] have been freed from their obligation." That, said Lord Watson in Palmer v. Wick and Pultneytown Steam Shipping Co. (1894) 21R. (H.L.) 39 at p. 45, is "a circumstance which in ordinary cases is sufficient, according to the law of Scotland, to raise a right of relief." [See Glasgow Corporation v. John Turnbull & Co. 1932 S.L.T. 457, the opinion of Lord Murray at p. 459]. It is in this sense that the judges in N.C.B. v. Thomson speak of "judicial determination." What they clearly had in mind was not judicial determination of the issues in an injured party's action, but judicial determination of his claim.

The submission for the defenders, in my opinion, proceeded upon a misconception of the true foundation of a claim of relief at common law. It also failed to give effect to the language of sec. 3 (2) upon proper construction of which the meaning of the words "found liable" is to be discovered. In order that a person may take advantage of sec. 3 (2) he must have been called as a defender in an action of damages in respect of loss or damage arising from wrongful acts or negligent acts or omissions. This is what is meant by the words, in sec. 3 (2), "any such action as aforesaid" which fall to be read in light of the language of sec. 3 (1). He must in that action have been "found liable" in damages in respect of the loss and damage on which the action was founded, and he must have paid those damages. He must, finally, offer to prove that the person against whom he attempts to make a sec. 3 (2) case might also, if sued, have been held liable for that same loss and damage. It is in my opinion clear that sec. 3 (2) is concerned with a situation in which the injured party has received full satisfaction for the relevant loss and damage with the consequence that his right to sue in respect of that loss and damage has been extinguished or is exhausted. If that is so there is no good reason for restricting the meaning to be given to the words "found liable" in the manner contended for by the defenders. What matters is that the injured party's claim shall have been finally judicially determined by an enforceable decree under which payment has been made. In my opinion an injured party's claim is just as finally determined judicially by a decree proceeding upon an agreement to settle in full satisfaction of the loss and damage complained of as by a decree pronounced in an action "fought to the death." So, indeed, and even more obviously, is a decree proceeding upon the acceptance of a tender "in full of the conclusions of the summons." If the defenders are right, a delinquent who had no answer on liability would have to refuse a reasonable offer by the pursuer to settle at a reasonable sum and incur needless expense in fighting on quantum to the death if he were not to lose his right of recourse to sec. 3 (2). Such a delinquent, further, would have to deny himself the sensible precautionary

procedure of tendering. I cannot believe that Parliament intended that such absurd restrictions should be imposed upon persons who might wish to avail themselves of sec. 3 (2), and it will not do to say that an alternative remedy is available. To take an assignation from a claimant in settling a threatened action may well be worthless having regard to the effect of the time limit attracted by the claim assigned. To take an assignation from a claimant who has obtained decree on a settlement in course of litigation or upon an acceptance of tender would at once be met by the objection that the claimant's right to pursue other co-delinquents has been extinguished. I have only to add that sec. 3 (2) is not, in terms, concerned with the apportionment of a particular sum of damages among co-delinquents. Under that subsection the court is invited only to decide what just contribution, if any, should be made by a delinquent in respect of the extinction, at the expense of a co-delinquent, of the common liability of all co-delinquents to the injured party to make reparation for his loss and damage. In these circumstances the precise sum at which the injured party's claim has been judicially determined after settlement or tender is not of critical significance. If the delinquent who has paid under such a decree has paid too much this can readily be reflected in the contribution ordered and I need hardly say that the contribution does not require to be of a proportion of any particular sum. For all these reasons, and the reasons set forth in the Lord Ordinary's opinion which I do not repeat here, I am satisfied that in the circumstances of this case the pursuers may on their averments, be able to prove that they have been "found liable" within the meaning of sec. 3 (2).

The second proposition for the defenders was that the Lord Ordinary erred in holding that sec. 3 (2) could be invoked by a delinquent who had been "found liable" within the meaning of the subsection by a decree of a foreign court. The action in the United States was not within the ambit of the words "any such action as aforesaid." These words refer back to sec. 3(1) which, as the Lord Ordinary held correctly, is concerned only with actions against two or more persons in a Scottish court. In an action of relief the liability of joint wrongdoers must be commensurate and in principle it would seem right that there could be no action of relief at common law following a foreign decree against one of several delinquents. Great practical difficulties would arise if such an action would lie. The Scots court would have to find out if the foreign court was an action of damages of the kind defined in sec. 3 (1) and also whether the defenders called might also have been held liable in respect of the loss and damage in question. Under sec. 3

(2) the assessment of a just contribution would be difficult. Attention would have to be paid to the different levels of damages in the foreign jurisdiction and in Scotland. As matter of construction, when sec. 3 (2) is read together with sec. 3 (1), the words "any such action as aforesaid" mean any such action in a Scottish court. Such a construction has the advantage of eliding all practical difficulties in the application of sec. 3 (2).

The argument for the defenders in support of their second proposition which I have just summarised has not persuaded me that the Lord Ordinary erred in rejecting it. As matter of construction Parliament has not expressly restricted the application of sec. 3 (2) to actions of damages in respect of loss or damage arising from any wrongful acts or negligent acts or omissions which have been brought in a Scottish court and I entirely approve of the Lord Ordinary's reasons for holding that there is no good reason for importing such a restriction by

implication. Section 3 (2) is concerned with a situation in which several co-delinquents share a common liability to an injured party in respect of the same loss and damage. They are liable jointly and severally. To that extent their liability is commensurate. Section 3 (2) unlike sec. 3(1) is not concerned with co-delinquents who have been convened in the same action. The only prerequisite to resort to sec. 3

(2) to which Parliament has pointed is decree in "any" action of the defined kind followed by payment, and, since the subsection is concerned primarily with a situation in which the common bond among the parties to an action founded upon it is joint and several delictual liability to the same injured party in respect of the same loss and damage, there seem to me to be no practical advantages in accepting the restrictive interpretation favoured by the defenders which would exclude from the scope of sec. 3 (2) decrees of courts in the United Kingdom. There may, of course, be some difficult questions for the court to resolve in an action for contribution where the decree relied on by that pursuer in that action is a foreign one but this is a situation with which the Scottish courts are entirely familiar. For these reasons and for the reasons to be found in his opinion, the Lord Ordinary's decision to reject the second proposition for the defenders readily survives the attack which has been made upon it.

The third proposition for the defenders was founded upon the word "also" in sec. 3 (2). Before the Lord Ordinary the defenders' submission was that the presence of this word required that the defenders in an action for contribution under sec. 3 (2) must have been capable of being held liable in the same action in which decree had been pronounced against the pursuer or at least in the same court. This submission was made, of course, because it appears that the defenders who were not subject to the jurisdiction could not have been convened in the action in Pennsylvania or in any action in that court. The Lord Ordinary rejected that submission and it is not now contended that he erred in so doing. Before us the submission for the defenders was that as a matter of construction of sec. 3 (2) the defenders in an action for contribution must have been capable of being sued in the same jurisdiction. By that the defenders meant that such defenders must have been capable of being sued in a court applying the same system of law as the foreign court which pronounced the decree against the pursuers.

In my opinion there is nothing in the language of sec. 3 (2) which provides any support for a construction of the subsection which involves reading into it restrictive words which are not expressed. The words "if sued" mean no more than if sued by the injured party "relevantly, competently and timeously" (see Singer v. Gray Tool Co. (Europe) Ltd. 1984 S.L.T. 149 at p. 151). All that is required is that the co-delinquent not called in the particular action by the injured party could have been sued and could have been found liable in respect of the same loss and damage on which the original action was founded in any court to the jurisdiction of which he could be subjected.

Finally the second and third-named defenders presented to us an argument which they did not advance in the court below. This new submission was that the pursuers have failed to make relevant and sufficiently specific averments of how the sum paid in settlement to Mrs Moore and her family was arrived at. For example what elements were taken into account? What were the details of the family and of their dependency? What kind of hearing took place in the court in America? What evidence was given by the plaintiff? What advice did the pursuers

receive as to the award which a Pennsylvania jury might have made? Was contributory negligence taken into account?

I have no doubt that the pursuers could have provided on averment fuller information about the settlement of the American action but I have come to be of opinion that the criticisms of lack of specification advanced by these defenders in the Inner House as an afterthought, and which were not attempted by the first-named defenders, ought not to receive effect. The pursuers have, in my opinion, made averments about the settlement which are at least adequate for inquiry by proof before answer. In particular they have offered to prove that the settlement was a reasonable one upon the basis of the averments in art. 4 of condescendence. The precise amount for which the American action was settled is, in any event, only one of the factors for consideration in this action which, as I have said earlier, is not to secure apportionment of the sum actually paid to the Moore family but for such contribution, if any, from the defenders, as the court may deem just for having been relieved at the pursuers' expense of the risk of being sued by the family in a competent court.

On the whole matter I am of opinion that the reclaiming motion for the defenders should be refused and that we should adhere to the interlocutor of the Lord Ordinary.

LORD GRIEVE .—The facts and circumstances which form the background to this reclaiming motion are set out at length in the opinion of the Lord Ordinary, and it is unnecessary for me to rehearse them. In my opinion, for present purposes, the following facts and circumstances are the important ones to keep in mind when considering the issues raised in this reclaiming motion.

On or about 24th September 1976, two divers, one of whom was Michael Robert Moore, made a dive in the North Sea on the instructions of the pursuers, whose duty it was to oversee the diving operations. In course of the dive the "buddy line" by which Moore was connected to his fellow diver parted. Efforts, which proved unsuccessful, were made by the safety ship provided by the first defenders and by other parties to pick up Moore and Moore was drowned. The safety ship, Carbisdale, was owned by the second defenders, was on charter to the first defenders, and was crewed and managed by the third defenders.

Some four or five years later Moore's widow raised an action of damages on her own behalf, and on behalf of her children, in the United States District Court for the Eastern District of Pennsylvania, against Texaco North Sea U.K. Co., the pursuers, and three Comex Companies. Mrs Moore sued on the ground that certain acts or omissions committed by the companies named had caused the death of her husband. None of the present defenders were parties to that action which was ultimately settled in the court in Pennsylvania. It is important to quote the averments made by the pursuers in relation to that settlement. They are:

"After sundry negotiations and court procedure, a settlement was agreed whereby the plaintiff received a sum amounting to $234,000 on which Texaco North Sea U.K. Co. contributed $50,000 and the four said Comex Companies (including the pursuers) contributed the balance of $184,000. The legal advice obtained by the Comex Companies and by Texaco North Sea U.K. Co. was to the effect that the settlement with the plaintiff was a reasonable one. The Comex Companies and Texaco North Sea U.K. Co. reasonably accepted said advice. The settlement was put before the said court for approval, and by judgment of said

court dated 3rd February 1981 after a hearing, and upon evidence from the plaintiff, the court, inter alia , found that the settlement was reasonable and well within the probable results of litigation; approved the same; and gave judgment against Texaco North Sea U.K. Co. in the sum of $50,000 and against the four Comex Companies, including the pursuers herein, collectively for the balance of $184,000. Each party was ordained to pay its own costs. The documentation in implementation of said settlement was executed in course of that and the two following days. In terms thereof the plaintiff therein undertook to withdraw the Texas action and released and discharged the pursuers, the other Comex Companies, and Texaco from all claims competent to her arising out of Mr Moore's death."

The fair inference from all the averments in art. 4 of the condescendence, and in particular those quoted above, is that in the Pennsylvanian court action Mrs Moore claimed in respect of the whole of the loss and damages she had suffered as a result of the death of her husband, and that, as part of the settlement of the claim she discharged the pursuers, and the pursuers' now cedents, from all claims competent to her arising out of her husband's death. I conclude from these averments, and I did not understand any of the defenders in this reclaiming motion to suggest otherwise, that, so far as Mrs Moore was concerned, the settlement approved by the court in Pennsylvania was accepted by her as full reparation for her loss. So far as she was concerned her claim for reparation in respect of the death of her husband had been satisfied by the settlement set before the court in Pennsylvania for approval and judgment in February 1981, and thereafter she passed from the scene.

It seems however that the present pursuers were not content to let matters rest on the Pennsylvania settlement, except so far as Mrs Moore was concerned. As is apparent from their averments in the present action, they were of opinion that they were not the only party whose acts or omissions had contributed to the death of Mr Moore. In their own right, and as assignees of the other parties to the settlement in Pennsylvania, they raised the present action in which they seek inter alia a declarator that they are "entitled to such contribution by each of the defenders pursuant to sec. 3 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940, in respect of the sums sued for in conclusion 2 hereof as the court may deem just."

It is common ground that in accordance with the provisions of an order under sec. 3 (2) of the Continental Shelf Act 1964, which was in force at the time of Mr Moore's death, that the part of the North Sea where the dive took place is to be regarded as part of Scotland for the purpose of determining questions arising out of acts or omissions in connection with the exploration of the sea bed, or subsoil or the exploitation of other natural resources. It was in such activities that Mr Moore was engaged when he met his death.

With these facts in mind I consider first of all an argument presented by the first defenders in support of their first plea-in-law. In order to do so it is necessary to consider the provisions of sec. 1 of the Law Reform (Jurisdiction in Delict) (Scotland) Act 1971 (hereinafter referred to as "the 1971 Act"). The first defenders' said plea is in the following terms:

"The Court of Session having no jurisdiction over the first defenders in respect of the matters set forth in the summons the action should be dismissed."

Section 1 of the 1971 Act provides inter alia as follows:

"[F]or the Court of Session to have jurisdiction in any

proceedings founded on delict … it shall be sufficient that the delict forming the cause of action was committed within Scotland.…"

As I understood the submissions for the first defenders in support of their first plea-in-law, they were to this effect. "The terms of the 1971 Act provide the only ground of jurisdiction against the first defenders, but that Act does not apply to a right of relief under sec. 3 (2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940." The relevant provisions of sec. 3 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 (hereinafter referred to as "the 1940 Act") are as follows: [His Lordship set forth the terms of sec. 3(1) and

(2) and continued thereafter].

Counsel for the first defenders submitted that while it could be said that the death of Mr Moore had been caused by a delict committed in Scotland, that delict did not form the cause of the present action. Accordingly the provisions of sec. 1 of the 1971 Act were not apt to give the Court of Session jurisdiction in this action against the first defenders. Senior counsel for the first defenders submitted that for the cause of this action to be founded on delict the pursuers' case should be one in which they were alleging that they had suffered loss or damage as a result of the breach of a duty owed to them by the other defenders. The present action was not so based. It, the present action, was founded on a right of relief, and not on a delict. Further, if I understood the submissions of junior counsel for the first defenders correctly the right of relief was based on either equity or the statutory provisions of sec. 3 (2) of the 1940 Act. For an action to be "founded on delict" it had to be founded on a breach of duty owed to the pursuers in that action. Counsel sought to equiparate the rights of co-delinquents inter se with the rights of relief amongst co-cautioners, which he submitted flowed from the natural right to recompense and not from the contract of caution. In my opinion these submissions are misconceived, and flow from the erroneous assumption that sec. 3 (2) of the 1940 Act gives joint wrongdoers rights of relief inter se . As I shall later explain sec. 3 (2) of the 1940 Act (as the side note to it clearly suggests) was concerned with contributions by joint wrongdoers in respect of loss or damage to a person or persons, for which they were all, to some extent, responsible, and not with actions of relief as such actions are properly understood.

In my opinion in order to discover whether the present action, so far as directed against the first defenders, is "founded on delict", and furthermore on a delict committed in Scotland, the averments of the pursuers must first of all be examined. An examination of them discloses that an accident occurred as a result of which Mr Moore died, that the first defenders, inter alios were said to have been responsible for his death because they were in breach of certain duties of care which they owed to him, and that as a result of their breaches of duty Mr Moore's widow and children sustained loss and damage in respect of which they had a right of action. All the essential ingredients for an action founded on delict are present in these averments and it is not disputed that the delict, if committed, was committed in Scotland. In my opinion sec. 1 (1) of the 1971 Act was passed to enable persons who would not be subject to the jurisdiction of the Court of Session to be made subject to it, in actions founded on delicts committed in Scotland. The 1971 Act does not stipulate that the party relying on sec. 1 (1) of that Act, in order to found jurisdiction, must have been the victim of the delict in question, nor does it make any reference to the remedy that must be sought. The only foundation, for the present action, as is perfectly clear from the

pursuers' whole averments, is the alleged delict committed on 24th December 1976. Had there been no alleged delict on that date the pursuers could not have had a ground of action. In my opinion the first defenders' first plea-in-law falls to be repelled.

It was submitted on behalf of the second and third defenders(1) that the Lord Ordinary erred in holding that the pursuers had been "found liable" in damages as required by sec. 3

(2) of the 1940 Act; (2) that the Lord Ordinary had erred in holding that the pursuers against whom a decree had passed in a foreign court had "been found liable in any such action as aforesaid"; and

(3) that the Lord Ordinary had erred in holding that a person, from whom a contribution was sought, need not have been capable of having been sued and held liable in the same jurisdiction as that in which the seeker of the contribution was found liable. Counsel presented three other propositions of a subsidiary nature which I will deal with in due course, but the main submissions for the second and third defenders were contained in the three propositions set out above. I will deal with these propositions in turn.

(1) Senior counsel for the second and third defenders, whose submissions on the above matters were adopted by senior counsel for the first defenders, put the matter this way, as I noted him. "The words in sec. 3 of the 1940 Act make it clear that the section is not intended as a statutory framework for the regulation, generally, of contributions among wrongdoers, but is dealing with the very specific and limited matter of the right of relief amongst wrongdoers recognised in Scotland, but not in England." If I might digress for a moment. So far as the law of England is concerned, I share the Lord Ordinary's view that while it may be interesting, it does not assist in a consideration of the provisions of sec. 3 of the 1940 Act which only apply to Scotland.

As a basis for the above proposition counsel submitted that the words "found liable" made it clear that sec. 3 was dealing with actions of relief and only with actions of relief. Counsel maintained that the words "found liable" were otiose if the section was not dealing with actions of relief. If it were not so there would be no need for a decree of court. The decree of court was a necessary prerequisite to an action of relief at common law and under the statute. The quantum in the action of relief must have been proved to the satisfaction of a judge or jury as a debt, not just as a settlement approved by a court, as described on p. 19 of the closed record. In support of these submissions counsel relied on the opinion of the majority of the court in the case of N.C.B. v. Thomson 1959 S.C. 353, as indeed they had done before the Lord Ordinary. I entirely agree with the way the Lord Ordinary dealt with the case of Thomson as prayed in aid by the defenders. In particular I agree that the decision in that action, in so far as it has any bearing in this action, does no more than require the pursuers in this action to have in their possession a decree of a court as a result of which the debt in question has been determined by a court. The pursuers aver that they have such a decree, and offer to prove it. For present purposes that, in my opinion, is enough.

(2) The argument in support of this proposition was that the pursuers in an action based on the provisions of sec. 3 (2) of the 1940 Act had to have been "found liable" in an action in the Scottish courts. The words "any such action as aforesaid" refer back to the opening words of sec. 3 (1) which "reek", so counsel said, of Scottish procedure. The rights of the two co-delinquents had to be commensurate ( Caledonian Railway Co. v. Colt (1860) 3 Macq. 833). If a foreign

decree were good enough, in this case a decree in the United States where awards of damages were notoriously higher than in Scotland, a Scottish co-delinquent could be held liable for a pro rata share in an award of damages higher than would have been made in the Scottish courts. With all respect the submissions made on behalf of the second and third defenders under this head highlight what, in my opinion, is the fallacy underlying their main submissions, namely, that this action is in the nature of an action of relief. In my opinion it is not. As your Lordship pointed out in the case of British Railways Board v. Ross and Cromarty C.C. 1974 S.C. 27 at p. 36 under reference to the case of Caledonian Railway Co. v. Colt an action of relief proper was defined by the Lord Chancellor (Campbell) as one "where the pursuer and defender were under a common obligation, which ought first to have been performed by the defender, and which by his neglect, was cast upon the pursuer, so that the pursuer having been sued, was forced to pay damages together with the costs of his adversary and his own costs in the suit." As your Lordship also pointed out that was the kind of action with which the case of N.C.B. v. Thomson was concerned. In the context of this case, whether the settlement of the action in Pennsylvania in respect of which the pursuers hold a decree is an "action as aforesaid" as required by sec. 3 (2) of the 1940 Act, depends on whether the pursuers have averred(1) that they have paid damages or expenses to Mrs Moore

(2) that they have been found liable to pay these damages or expenses

(3) that they did so in the course of an action in respect of loss or damage

(4) that the loss and damage occurred from acts or omissions amounting to negligence and

(5) that the loss or damage arose from the negligent acts of the defenders as well as the pursuers. The pursuers in this action have undertaken on averment to prove all these matters, and, in my opinion, have therefore relevantly averred that they have been found liable in damages in such an action as is described in the first part of sec. 3 (1) of the 1940 Act, namely "such an action as aforesaid". Furthermore they have averred that what they are seeking from the defenders is such contribution as the court may deem just—not be it noted a proportion of the damages they have paid to Mrs Moore.

(3) This is really covered by what I have already said in relation to (2) supra . The damages paid must have been paid on an action based on wrongful acts or negligent acts or omissions, but the statute does not require that action to have been raised in Scotland.

Only two of the minor submissions made on behalf of the second and third defenders were argued. The first of these concerned the relevancy of the averments supporting the second conclusion. It was conceded that these were irrelevant and senior counsel for the pursuers asked leave to amend in this respect and also to amend the second conclusion. The final submission was that there were no relevant averments in relation to the quantification of the sum sued for. This was a point which was not taken before the Lord Ordinary. This argument proceeds, in my opinion, on a misunderstanding of what the pursuers are seeking. They are not seeking a proportion of the damages awarded in Pennsylvania, but simply a contribution towards them. As junior counsel for the pursuers put it:

"The United States award simply provides the framework outwith which the Scottish courts cannot go, but within which they can exercise a very wide discretion as to what a just contribution from any of the defenders should be."

In my opinion the defenders have failed to demonstrate that the interlocutor of the Lord Ordinary should be recalled. If I understand the submission made by

senior counsel for the second and third defenders correctly they were founded on the assertion that the present action was an action of relief as defined by the Lord Chancellor in the case of Caledonian Railway Co. v. Colt . I understood him to say that if he was wrong about that the substance of the argument for the second and third defenders, which counsel for the first defenders adopted, disappeared. With respect I think he was wrong, and that accordingly the substance of his argument does disappear. The words "action of relief" of themselves suggest a process whereby a pursuer seeks to be relieved of an obligation which he has performed on behalf of someone else, because that someone else has failed to perform it. This is not such a process, but is one whereby the pursuers seek a contribution in respect of a wrong for which both they, and the other defenders are responsible. Co-delinquents are liable singuli et solidum . The loss or damage suffered by the victim is the common debt amongst the co-delinquents. Once that has been determined in an action, and satisfied by one of the delinquents, it forms the basis for an action against the other co-delinquents for a contribution. The delinquent who has satisfied the victim's claim is not seeking relief in an action such as this, but is seeking a contribution from alleged co-delinquents towards a sum paid in full satisfaction of the victim's claim. It is essential for the competency of such an action that the victim's claim has been fully satisfied. That can be done by an action fought to a finish, by an action in which liability is admitted, but quantum contested, or by an action settled by a joint minute or by a tender so framed as to make it clear that the victim's claims have been fully satisfied. The quantum is of no significance except to provide a total sum within which contributions are to be assessed. What has to be borne in mind in actions of this kind, founded on the provisions of sec. 3 of the 1940 Act is the necessity for the victim's claim to have been fully satisfied before any action for contribution from wrongdoers, other than those who have satisfied that claim, can be considered.

For all these reasons, and for those given by your Lordship in the chair with whose opinion and reasoning I fully concur, I agree that this reclaiming motion must be refused.

LORD MCDONALD .—The widow of the late Michael Robert Moore raised an action in America for damages against inter alios the pursuers. The action sought reparation for loss sustained in consequence of the death of Mr Moore in off-shore operations in Scottish waters in the North Sea. The action was settled with the approval of the American court which gave judgment against those who had been sued for certain specified sums. These were paid. In the present action the pursuers seek a contribution from the three defenders in accordance with sec. 3 (2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940.

The first defenders plead that they are not subject to the jurisdiction of the Scottish courts in this matter. The Lord Ordinary has held that they are, by virtue of the provisions of sec. 1 (1) of the Law Reform (Jurisdiction in Delict) (Scotland) Act 1971. In my opinion his decision was correct.

The essence of sec. 1 (1) is that for the Court of Session to have jurisdiction in any procedure founded on delict it shall be sufficient that the delict forming the cause of action was committed within Scotland. The first defenders argued that the present action was not founded in delict. It was founded, it was said, upon the statutory provisions of the 1940 Act. This overlooks the fact that the whole basis of sec. 3 of that Act is that a delict has been in fact committed. This is implicit

in the words which head the section:

"Contribution among joint wrongdoers".

Unless there has been a delict committed the section cannot be invoked. In the present case a delict was committed in Scotland. This, under the 1971 Act, gives jurisdiction to the Scottish courts against the alleged wrongdoer, wherever he may be. I do not accept the argument for the first defenders that only the person directly wronged by the delict can invoke the jurisdiction conferred by the 1971 Act. The Act does not say so. In my opinion the jurisdiction extends to any proceedings arising out of that delict, and an action which seeks contribution from alleged co-perpetrators of the delict falls within that definition.

All three defenders also plead that the pursuers' averments based on sec. 3 of the 1940 Act are irrelevant. The Lord Ordinary has allowed proof before answer on these matters. In my opinion he was well-founded in so doing.

Section 3(1) and

(2) apply to two different situations. Section 3 (1) occurs where two or more wrongdoers have been found jointly and severally liable in damages by the verdict of a jury or the judgment of a court. They are to be liable inter se to contribute to such damages in such proportions as the jury or the court deem just. The finding of liability, the assessment of damages and the apportionment thereof are done in one single action. Section 3 (2) applies where one wrongdoer has paid damages in which he had been found liable in an action for loss arising from his wrongful or negligent act. He is entitled to recover from any other person who, if sued, might also have been held liable in respect of the loss on which the action was founded such contribution as the court may deem just. In other words one wrongdoer who has made good the loss to the person wronged may invite the court to ordain another alleged wrongdoer to make whatever contribution to the payment made is considered to be just. There is an important distinction in the wording used by the two subsections. Section 3 (1) speaks of proportions, i.e. an apportionment between defenders of a fixed sum found due by the court. Section 3 (2) speaks of a contribution to be made by one alleged wrongdoer to another wrongdoer who has been found liable. It does not, in my view, necessarily follow that the amount of such contribution should be related to the sum in which the latter has been found liable.

The main argument turned upon the meaning to be given in "found liable" in sec. 3 (2). The defenders argued initially that both liability and assessment of damages had to be established as a result of a fully contested action with parties at arms length throughout. Subsequently it was conceded that sec. 3 (2) would apply where the finding of liability was based upon admission by the defenders. It was maintained, however, that the quantification of damages must be contested to the end and a decree for the amount thereby assessed obtained. A wrongdoer who was sued and who settled the action in the course of the proceedings could not obtain a contribution under sec. 3 (2) even where the court interponed authority in the settlement and gave decree for the agreed sum.

An attempt was made to support this argument by reference to two English statutes, viz. : the Law Reform (Married Women and Tortfeasors) Act 1935 and the Civil Liability and Contribution Act 1978. In my opinion it is unsafe to attempt to construe a Scottish statute by reference to other statutes which apply exclusively to England and for that short reason I do not find it necessary to consider this aspect of the argument further.

The defenders relied strongly on the case of N.C.B. v. Thomson 1959 S.C. 353. According to the rubric in the report the decision in that case was "that a joint

or several decree, or some equivalent instrument constituting the debt, was an essential prerequisite to an action of relief; that such constitution was implicit in sec. 3 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940; and that since the debt lacked such constitution, the action, in so far as it was one of relief, was irrelevant." It is important to note that the case of Thomson was not based upon sec. 3 of the 1940 Act. It was an action for relief at common law against an alleged co-delinquent for a pro rata share of the sum which a delinquent had paid to his victim. In that context references to sec. 3 of the 1940 Act are obiter .

I prefer to treat the problems under sec. 3 as a straight question of statutory construction. So doing I find that sec. 3 (2) can only be invoked where the person seeking contribution has been found liable in an action of damages. This implies, in my opinion, a finding of liability by the decree of a competent court. I do not find in the wording any requirement that such decree must be pronounced after a fully contested action either on the question of liability or of quantum or both. I see no reason why a decree pronounced in implement of an extra-judicial settlement should not suffice. That is precisely the situation in the present case. The contrary view would involve unnecessary waste of time and money in contesting hopeless actions and deprive a defender of his right to make use of the judicial expedient of tendering, if so advised. It is, of course, essential that the victim has accepted the decree in full and final satisfaction of his claim, and that he had been paid under it. The wrongdoer who pays may, if he wishes, take an assignation from the victim of his whole claims in respect of the incidents giving rise to these, but this is not essential. A claim for a just contribution from a co-delinquent, remains open under sec. 3 (2) of the 1940 Act whether there is an assignation or not.

For these reasons I am of opinion that the defenders' argument based upon the meaning to be given to the words "found liable" in sec. 3 (2) is unsound. Moreover, for the reasons stated by your Lordship in the chair I am of opinion that the subsidiary arguments advanced by the defenders are also unsound. I would refuse the reclaiming motion.

The defenders appealed, with the leave of their Lordships in the First Division, to the House of Lords. The first-named defenders lodged their petition of appeal on 4th July 1986; and the second and third-named defenders lodged their petition of appeal on 7th July 1986. The appeals were consolidated and heard in the House of Lords by Lord Keith of Kinkel, Lord Fraser of Tullybelton, Lord Brandon of Oakbrook, Lord Ackner and Lord Goff of Chieveley on 9th, 10th, 11th and 12th February 1987.

At delivering judgment, on 9th March 1987,—

LORD KEITH OF KINKEL .—My Lords, the action with which these consolidated appeals are concerned arises out of a tragic episode which occurred in the Scottish

sector of the North Sea on 24th December 1976. A diver named Michael Robert Moore made a dive, together with a companion, from an oil rig operated by Texaco North Sea U.K. Co. Ltd. ("Texaco") under instructions issued to him by the respondents Comex Houlder Diving Ltd. ("Comex"). Things went wrong. Moore became separated from his companion and was unable to get into the cage lowered from the oil rig to hoist him from the water. He drifted off, supported by an inflated life jacket. A safety vessel, the Carbisdale , was standing by to deal with such emergencies. The vessel, which was provided by the first appellant under contract with Texaco, was owned by the second appellant and crewed by the third appellant. Those aboard the vessel made efforts to pick up Moore, but these were unsuccessful. He floated away and was drowned.

Moore's widow, on behalf of herself and her children, raised an action of damages in the United States District Court for the Eastern District of Pennsylvania against Texaco, Comex and other corporations associated with Comex. In consequence of jurisdictional pleas by the Comex companies, a similar action was raised in Texas. The defendants were advised to settle the actions, and this was brought about by a settlement of the Pennsylvanian action, under which the plaintiffs received a sum of U.S. $234,000, of which $50,000 was contributed by Texaco and $184,000 by the Comex operations. According to the averments of Comex in the present action, the settlement was put before the court for approval, and the court, upon evidence from the plaintiff, found that the settlement was reasonable and well within the probable results of the litigation and approved it, and went on to give judgment against Texaco for $50,000 and against the Comex corporations for $184,000, each party being ordered to pay its own costs. The costs of Texaco and the Comex corporations amounted to a very considerable sum—about $75,000 in all to American legal advisers and £20,000 to British.

Comex obtained from Texaco and the other Comex corporations assignations of their respective claims against each of the appellants, and commenced the present action against them in the Court of Session. The conclusions of the summons are three in number, but these appeals are concerned only with the last of them, whereby Comex seeks declarator that it is entitled to contribution from the appellants under sec. 3 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 in respect of the sums which Comex and its cedents paid by way of damages and their own costs in the Pennsylvania proceedings.

The appellants tabled a number of preliminary pleas and argued them on procedure roll before the Lord Ordinary (Lord Mackay of Clashfern) with varying success. For present purposes the only plea which is in point is a general plea to the relevancy of the respondent's case in so far as founded on a right to contribution under sec. 3 of the Act of 1940. As regards that matter the Lord Ordinary held that the respondent's averments did disclose a case capable of establishing a right to contribution and he allowed a proof before answer. Upon a reclaiming action by the appellants the First Division of the Inner House (Lord President Emslie, Lord Grieve and Lord McDonald) affirmed the Lord Ordinary. As the judgment was interlocutory, the appellants required and duly obtained leave of the First Division to appeal to your Lordships' House.

Section 3 of the Act of 1940 provides: [His Lordship set forth the terms of sec. 3 and continued thereafter.]

It is upon subsec. (2) that the respondent relies, maintaining that by the

judgment of the Pennsylvanian court and it and its cedents (to all of which I shall henceforward refer collectively as "Comex") have been found liable in an action of damages in respect of loss arising from negligent acts or omissions and have paid such damages, and further that the appellants are persons who, if sued, might also have been held liable, on grounds of their negligence, for the same loss. The appellants presented three principal arguments. In the first place they maintained that the words "found liable" in sec. 3 (2) on a proper construction required that Comex should have had liability fixed upon it by judgment in a contested action. This had not happened in this case. What had happened was that Comex had voluntarily entered into a settlement of the plaintiff's claim in the Pennsylvanian suit, and the judgment of the court had merely given effect to that settlement. It was argued secondly that subsec. (2) had application only where the person claiming contribution had been found liable in damages in a Scottish court, so that no judgment of any foreign court could in law give rise to such a claim. The third argument was to the effect that in any event it was necessary that the party against whom contribution was sought should have been one who might have been successfully sued in the same court as that which found liable in damages the party claiming the contribution. That position did not exist in the present case because the appellants were admittedly not subject to the jurisdiction of the Pennsylvanian court.

Before examining the appellants' arguments in detail it will be helpful to consider briefly how the law relating to contribution among co-delinquents stood prior to the passing of the Act of 1940. In Palmer v. Wick and Pulteneytown Steam Shipping Co. Ltd. (1894) 21 R (HL) 39 the widow of a man killed by the breakage of tackle being used to unload a ship obtained a joint and several decree for damages and expenses against the shipowners and a stevedore involved in the unloading. The widow charged the shipowners with the whole sum, and the latter thereupon paid it and took an assignation of the decree. They then sued the stevedore for half the sum, and were held entitled to recover it, both in the Inner House and in your Lordships' House. Much attention was given by Lord Watson to consideration of the rule against contribution among wrongdoers. He took the view, with the concurrence of Lord Halsbury and Lord Shand, that the rule did not apply to quasi-delicts involving no moral blame on the part of the delinquent, and he held that in any event the rule was inapplicable where contribution was sought upon the basis of a decree constituting a civil debt against both parties. It was also held to be no objection to the right of recovery that it was limited to a pro rata share of the liability, irrespective of the degree of fault which might be attributable to each of the parties. Then in Glasgow Corporation v. John Turnbull & Co. 1932 S.L.T. 457 the widow and daughter of a man killed as a result of a collision between a tramcar owned by the corporation and a motor lorry owned by John Turnbull & Co. had raised an action of damages against the corporation alone and obtained after jury trial a decree against them for damages and expenses. The corporation then raised an action against the owners of the motor lorry claiming relief against them in respect of one-half of the sum decerned for. The defenders pleaded that the corporation's case was irrelevant, but the Lord Ordinary (Murray) held that the corporation had set forth a relevant case entitling them to claim relief against the defenders, and to that extent repelled the plea to

relevancy. The defenders reclaimed, and after a hearing before the Second Division the Lord Ordinary's interlocutor was of consent recalled, and a proof before answer on the whole case was allowed. History does not record what happened to the case after that. Lord Murray's judgment was based upon what he took to be a statement of general principle in the speech of Lord Watson in Palmer's case [(1894) 21 R. (H.L.) at p. 45]:

"[T]he claim of relief rests … upon the fact, as Lord Bankton puts it, that by the use of [the claimant's] money the rest have been freed from their obligation—a circumstance which, in ordinary cases, is sufficient, according to the law of Scotland, to raise a right of relief."

Section 3 of the Act of 1940 changed the law in a number of ways. First of all, it made it possible, where two or more persons had been convened as defenders in an action seeking damages against them jointly and generally on the ground of wrongful acts or negligence, for their liability inter se for the damages to be apportioned among them in that action. Further, it enabled the apportionment to be made not on a pro rata basis but in such proportions as might seem just. These changes were a development of the law as stated in Palmer's case. Then by subsec. (2) a person who had been found liable in damages in an action on similar grounds was given the right to recover a just proportion of the damages he had paid from any other person who, if sued, might also have been held liable for the same loss. This gave statutory force to the law as it had been held to be by Lord Murray in Glasgow Corporation v. John Turnbull & Co. , but extended it so as to enable recovery not merely of a pro rata proportion of the damages, but of such contribution thereto as might seem just.

Turning now to the first argument for the appellants, the question for resolution is whether, on a proper construction of the words "found liable" in sec. 3 (2) of the Act of 1940, that subsection takes effect only where there has been a judgment of the court on liability and damages in a contested action, or whether it suffices that there has been a formal decree of the court giving effect to an agreed settlement. Some assistance is, I think, to be gathered from the use of the word "found" in relation to the liability of the person claiming contribution in contradistinction to the word "held" used in relation to the liability of the person against whom he is claiming it. The words "found … liable" appear also in subsec. (1). It is true that the reference there to the verdict of a jury would normally involve that there should have been a contested action resulting in a verdict. But that is not necessarily so. It is not an impossible scenario that two defenders sued jointly and generally should each admit liability but seek a verdict or a judgment of the court upon quantum of damages and upon apportionment of the damages inter se , or indeed that they might also agree damages with the pursuer and seek a verdict or judgment on apportionment only. Parliament cannot reasonably be taken to have intended that the subsection should not be operative in such a situation. If the word "found" in subsec. (1) is not to be construed as requiring that there should have been a judicial decision upon a contested issue of liability, the same meaning is properly to be attributed to it in subsec. (2).

The effect of a decree against a defender in an action of damages, whether following on a contest or pronounced by agreement, is to turn a previously unliquidated claim into an ascertained and liquidated liability for a debt. There is, in my opinion, no sound reason in principle or from considerations of convenience why a defender who has incurred such a liability following upon an agreed settlement, and has paid the debt, should be deprived of the right to seek

contribution under subsec. (2). If there has been any connivance or collusion with the pursuer, that would be a matter proper for consideration in determining what contribution, if any, was just. The agreed amount of damages would not be conclusive against the party from whom contribution was sought, nor indeed would the quantum of damages awarded in a contested action to which he had not been a party. In either event it would be open to him to contend, and lead evidence in support of the contention, that the damages were excessive. There would, on the other hand, be grave inconveniences if a decree following an agreed settlement were incapable of founding a claim under the subsection. It would be necessary for the defender first sued to insist upon the action going to trial, however bad his case and however easy of ascertainment the damages. He would be obliged to incur unnecessary expenses not recoverable under the subsection—which mentions only expenses for which he has been found liable to the pursuer. Further, he would be deprived of the safeguard otherwise available to him of proceeding by way of tender, for fear that it might be accepted to the effect of his losing his right to contribution.

Counsel for the appellants placed some reliance on N.C.B. v. Thomson 1959 S.C. 353. That was a case where a collision between two vehicles had resulted in injury to a passenger in one of them. The owners of one of the vehicles paid the passenger a sum of money in settlement of all claims he might have arising out of the accident. Later they took from him an assignation of all claims that he might have arising out of the accident, including any such claims against the owners of the other vehicle. They then raised an action against these owners, claiming payment of one-half of the sum they had paid to the injured passengers. The claim was based on common law, and the contribution claimed was a pro rata one. The Second Division (Lord Strachan dissenting) held that the pursuers were not entitled to recover any contribution, because they had never been liable for any debt constituted by decree of the court. Section 3 (2) of the Act of 1940 was naturally, there having been no decree of any kind against the pursuers, not founded on by them. Their claim was purely under common law. But the terms of the subsection were considered in the opinions of the judges, the majority taking the view that the nature of the right it conferred, namely to a contribution based on a just apportionment of liability, was inconsistent with there being a right at common law to a pro rata contribution in a situation where the claimant's debt had not been constituted by the decree of a court. While there are certain passages in the opinions of the judges indicating that they had in mind the operation of the subsection in the situation where the claimant to contribution had been pursued to judgment, it is clear that none of them was directing his mind to the question whether a decree in a contested suit was essential to that operation or whether a decree by consent would suffice. In my opinion the case does not assist towards the resolution of that question.

My Lords,

for these reasons I am of the opinion that the Lord Ordinary and their Lordships of the First Division rightly rejected the first argument for the appellants.

With regard to the second argument for the appellants, the question is whether Parliament, when it referred in sec. 3 (2) of the Act of 1940 to "any such action is aforesaid," had in contemplation only actions in a Scottish court or actions in any court anywhere in the world. In enacting sec. 3, Parliament was setting out to alter the common law of Scotland in the respects which I have described earlier.

In my opinion it did not have in view any international dimension. It is clear enough that subsec.(1) is concerned with actions in Scotland only. It is not concerned with actions which might be raised in foreign courts arising out of negligent acts or omissions occurring in Scotland, or seeking to confer rights or create liabilities enforceable in foreign courts. Thus if two French drivers were to have a collision in Scotland resulting in injury to a French passenger, and were to be sued by the passenger in France, I would not expect the French court to apply sec. 3 (1). On the other hand, if two Scottish drivers were to collide in France, injuring one of their passengers, in an action raised by the passenger in Scotland against both drivers the Scottish court would, in my opinion, rightly apply sec. 3 (1). If the passenger were to sue one only of the drivers in Scotland, and obtain decree for damages against him, that driver would, in my opinion, he entitled to take proceedings against the other in Scotland under sec. 3

(2) to the effect of recovering such contribution as might be just. What both subsec. (1) and subsec. (2) are doing is to alter the law of Scotland as regards the effect of Scottish judgments and the rights arising out of them. They are not saying anything about the effect of foreign judgments, and in my opinion it does not make any difference that a foreign judgment arises out of a quasi-delict occurring in Scotland. If before the Act of 1940, and before the law of England was altered by the Law Reform (Married Women and Tortfeasors) Act 1935, a party had obtained from an English court joint and several judgment for damages against two defendants, one resident in England and the other in Scotland, in respect of negligent acts committed in Scotland, and had obtained satisfaction of the judgment against the English defendant, I apprehend that the latter would not have been entitled to recover a pro rata contribution from the Scottish defendant in a Scottish court. The reason is that the only foundation of his claim would be an English judgment which did not give him that right: Merryweather v. Nixan (1799) 8 Durn. & E. 186. The fact that the lex loci delicti was Scots law would be irrelevant. On the basis that that would have been the position at common law before the Act of 1940, I am satisfied that sec. 3 does nothing, by the language used, to alter that position. In my opinion the intention of sec. 3 was to alter the law as to the effect of certain Scottish judgments. It was not purporting to deal with the effect of foreign judgments.

My Lords,

for these reasons I am of opinion that the second argument for the appellants is well-founded and that the Lord Ordinary and their Lordships at the First Division fell into error in rejecting it. It follows that the appeals must be allowed, and it thus becomes unnecessary to consider the further arguments for the appellants.

In the result, the appropriate course would be to recall the interlocutors appealed against, to sustain the sixth plea-in-law for the first defenders and the third plea-in-law for the second and third defenders and to dismiss the action. The appellants are entitled to their costs of the appeal to the House and their expenses in the Court of Session.

LORD FRASER OF TULLYBELTON .—My Lords, I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Keith of Kinkel. I entirely agree with it. I add a few words of my own on the point on which we are differing from the Court of Session only out of respect for the judges.

The question is whether the expression "any such action as aforesaid" in sec.

3 (2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 applies only to actions in the Scottish courts or applies also to actions in the courts of other countries. The words "as aforesaid" clearly refer back to subsec.(1) of sec. 3; no other antecedent seems possible and none was suggested in argument. Both parties agreed that the direct application of subsec. (1), although it is not restricted to the Scottish courts in express terms, is in fact so restricted because the Act applies only to Scotland. If that be so, as I think it is, then in my opinion a necessary consequence is that subsec.

(2) is to be read in the same restricted sense. "Such action as aforesaid" must mean the same kind of action as is referred to in subsec. (1), with all its qualifications and restrictions, both express and implied.

Senior counsel for the respondents sought to escape from that position by submitting that, where a question concerning a right of relief by one co-delinquent against other co-delinquents arose in connection with a quasi delict committed in Scotland, a foreign court would apply the law of Scotland as the proper law of the delict. But I am by no means satisfied that this is correct, and the law on the subject appears to be uncertain: see Dicey & Morris, The Conflict of Laws , 10th edn. (1980), vol. 2, p. 967. Accordingly I am of opinion that there is no reason to depart from the natural grammatical meaning of subsec. (2) which I have stated already.

I would allow the appeals and make an order in the terms proposed by my noble and learned friend, Lord Keith of Kinkel.

LORD BRANDON OF OAKBROOK .—My Lords, I have had the advantage of reading in draft the speeches prepared by my noble and learned friends, Lord Keith of Kinkel and Lord Fraser of Tullybelton. I agree with both of them, and for the reasons which they give I would allow the appeals and make an order in the terms proposed by my noble and learned friend, Lord Keith of Kinkel.

LORD ACKNER .—My Lords, I have had the advantage of reading in draft the speeches prepared by my noble and learned friends, Lord Keith of Kinkel and Lord Fraser of Tullybelton. I agree with them, and for the reasons which they give I would allow these appeals.

LORD GOFF OF CHIEVELEY .—My Lords, I have had the advantage of reading in draft the speeches of my noble and learned friends, Lord Keith of Kinkel and Lord Fraser of Tullybelton. For the reasons they give I too would allow the appeals and make an order in the terms proposed by my noble and learned friend, Lord Keith of Kinkel.