Thursday, 29 September 2016

DRAFT WRIT FOR DEFAMATION AGAINST MR IAIN SCOTT, SCOTTISH ENTERPRISE CHIEF FINANCIAL OFFICER AND COMPANY SECRETARY


a. Initial Writ

 

Sheriffdom of Glasgow, 1 Carlton Place, GLASGOW G5

Court reference 

 

INITIAL WRIT

In the cause

EDWARD EDELSTEN CAIRNS

Residing at 72 Hillhouse Street,

Springburn, GLASGOW G21 4HP

                                                                                                      PURSUER

against

 

IAIN SCOTT

c/o SCOTTISH ENTERPRISE, Atrium Court,

50 Waterloo Street, GLASGOW G2 6HQ

 

 

                                                                                                    DEFENDER

 

The pursuer craves the court:

1. To grant decree against the defender for payment to the pursuer of the sum of FIFTY THOUSAND POUNDS (£50,000), with interest thereon at the rate of eight per centum per annum from the date of decree until payment.

2. To find the defender liable in the expenses of the action.

 

 

CONDESCENDENCE

COND. 1 The pursuer resides at 72 Hillhouse Street, Springburn, GLASGOW G21 4HP. The defender’s address is unknown to the pursuer but he is employed in Scottish Enterprise which has a place of business at Atrium Court, 50 Waterloo Street, GLASGOW G2 6HQ and this court has jurisdiction since the defamatory statements were communicated to Mr Bob Doris MSP and the pursuer in the Glasgow area and damage was done to the pursuer in the Glasgow area. To the knowledge of the pursuer, no proceedings are pending before any other court involving the present cause of action and between the parties hereto. To the knowledge of the pursuer, no agreement exists between the parties prorogating jurisdiction over the subject matter of the present cause to another court.

 

COND. 2 On 27 November 2013 the defender wrote to Mr Bob Doris MSP in respect of the pursuer including the words that are reproduced below, in italics for convenience:

‘I understand that Mr Cairns has fully exhausted the complaints and review procedures of all the organisations that he has involved, including Scottish Enterprise and the Scottish Public Services Ombudsman.’

‘For a complaint to continue to be raised beyond all the review processes places Scottish Enterprise in a difficult, indeed, unprecedented position.’   

‘In our view, given the complaint has exhausted even the processes beyond Scottish Enterprise’s complaints procedure, the length of time since the original complaint and that staff involved at the time are no longer in the employment of Scottish Enterprise we do not believe that it is the public interest (sic) to dedicate any further public resource to re-addressing questions posed by Mr Cairns that were the subject of the original complaint.’

On 15 April 2016 the defender communicated the following words about the pursuer to Police Scotland and to Scottish Enterprise which disclosed to the pursuer in July 2016 the defender’s repetition of words about the pursuer:

‘Scottish Enterprise National took these allegations seriously, and investigated them thoroughly on the day that they were made. There is no substance to any of the allegations made regarding the receipt of European funds by Enterprise Ayrshire. Our enquiries are complete and there are no grounds for taking any action.’

‘Mr Gordon Brown, Enterprise Ayrshire’s director of business development, said it was aware of Mr Cairns’s allegations and rejected them totally. He said the European funds were handled absolutely correctly in legal and accounting ethical terms.’  

‘Following an allegation by a member of EA’s temporary staff, Tom Woodbridge requested that I visit EA to investigate the facts behind the report.’

‘A review of the bank reconciliation indicated that the bank statements had been reconciled only to the cash book. As the entry had been made in the cash book for the ERDF income, no discrepancy arose. Had the cash book balance been subsequently reconciled to the bank account in the financial ledger the difference would have been highlighted. There was no evidence that this reconciliation had been carried out.’

‘Strathclyde Police fraud squad is investigating alleged irregularities at Enterprise Ayrshire after an accountant claimed that £187,000 of European funding was omitted from the agency’s main computer for several months but was put in a high interest bank account. Enterprise Ayrshire has dismissed the allegations as utterly groundless, and says it has not been contacted by the police on the matter. Mr Eddie Cairns, 42, a management accountant from Springburn, Glasgow, claims he was sacked by Enterprise Ayrshire after questioning the accounts. Mr Cairns, who has 21 years’ experience in accounting, joined the LEC on contract from a Glasgow job agency in January this year. He claimed that in July he was going over the June accounts and discovered that £187,000 of European Regional Development Fund money had been noted in the cash book but left off the agency’s main computer ledger. He claimed the EC money came in in June, but did not appear in the computer records from June until August 18. He alleged photocopies of bank documents, which he produced for the Herald, showed the money had been transferred to a high interest account on July 1. Mr Cairns alleged that when he questioned why the figure had not appeared he was told it was not important, it was not a large amount of money, and it would be put into the computer later. He claims he continued to question the entries, and drew his concerns to the attention of his superiors at Enterprise Ayrshire, as well as Scottish Enterprise, a lawyer, the police, and the Chartered Institute of Management Accountants. On August 18, he alleges that after being told that the entry had been put through into the computer, he made a photocopy of it and was told to leave the office. He said he was given no explanation as to why he was being required to leave immediately. Mr Cairns said he had written to Strathclyde fraud squad and sent documentation, and had been called in for an interview on Tuesday. He claims he questioned the entries because he had believed it to be unethical to leave funds off the accounts. He said he has been left without a job because of the actions he had taken. A spokesman for Strathclyde police confirmed yesterday that the fraud squad was investigating alleged irregularities at Enterprise Ayrshire but would not comment further. Mr Gordon Brown, Enterprise Ayrshire’s director of business development, said it was aware of Mr Cairns’ allegations and rejected them totally. He said the European Funds were handled absolutely correctly in legal and accounting ethical terms. ‘The money was correctly received from Europe and correctly handled thereafter. Mr Cairns is incapable of accepting that. That’s why his contract was terminated. He was not sacked. His claims are without foundation.’ A Scottish Enterprise spokesman said it took Mr Cairns’ allegations seriously and investigated them thoroughly the day they were made.’

Copies of the letter from the defender to Mr Bob Doris MSP dated 27 November 2013 and the defender’s communication to Police Scotland and Scottish Enterprise on 15 April 2016, which was disclosed to the pursuer by Scottish Enterprise in July 2016, are produced and referred to for their terms which are held as incorporated herein brevitatis causa.

 

COND.3 The defender’s statements about the pursuer and the defender’s repetition of statements about the pursuer reproduced above were false and misleading.

The defender defamed the pursuer thereby since the defender’s words would tend to lower the pursuer in the estimation of right-thinking members of society generally.

According to Kenneth McK Norrie’s book, Defamation and Related Actions in Scots Law, Butterworths, (1995), at page 1:

‘The law of Scotland has always placed high regard on a person’s right to reputation. Stair, listing the important interests that are protected by the law, puts ‘fame, reputation, and honour’ third to ‘life, members and health’ and ‘liberty’.

‘(Institutions of the Law of Scotland, 1,4,4)’

‘If character, honour and reputation is unjustly attacked the law provides remedies through the actions for defamation, verbal injury, and even negligence.’

On page 8 the following is stated:

‘Defamation is, literally, the taking away of one’s fame and to be actionable the pursuer must establish that the statement or communication is injurious in the sense of being capable of harming the pursuer’s public character, honour or reputation.’

‘(Green’s Encyclopaedia of Scots Law, vol 5, 1102)’

And on page 9 the following is stated:

’Would the words tend to lower the plaintiff in the estimation of right-thinking members of society generally?’

‘(Sim v Stretch [1936] 2 All ER 1237 at 1240. This test has been accepted as representing the law of Scotland in Steele v Scottish Daily Record and Sunday Mail 1970 SLT 53 and in Thomson v News Group Newspapers 1992 GWD 14-925.)’

‘The significance of this test cannot be overstated.’

Any repetition of a defamatory statement is actionable. The defender has fallen foul of the “repetition rule”, i.e. that a person who repeats a libel is equally responsible with his author.

According to Kenneth McK Norrie’s book, Defamation and Related Actions in Scots Law, Butterworths, (1995), at page 74:

‘An individual is liable for his or her own delicts, committed either personally or through the medium of another. To instruct one’s employee to defame another is to commit the wrong oneself (though the employee will be personally liable too). If more than one person joins in the defamation each is personally liable for the whole loss to the pursuer, for, notwithstanding that the defamation is committed by more than one person, liability is individual and not joint and several.’

 

COND.4 The pursuer is a qualified accountant therefore the defender’s defamatory statements in the context of alleged financial irregularities in a public authority were particularly insulting and damaging. The words amounted to an unjustified attack on the pursuer’s professional competence and integrity. They falsely portrayed the pursuer as a dishonest and unreasonable person, an incompetent accountant, a false accuser and someone who had breached professional standards.

Especially damaging were the defender’s repetitions of statements that the pursuer’s allegations that £187,000 of European funding had been omitted from the agency’s main computer for months but put in a high interest bank account were utterly groundless and the defender’s repetitions of statements that the pursuer was incapable of accepting that the money was correctly received from Europe and correctly handled thereafter.

The defender’s defamatory statements about the pursuer resulted in Mr Bob Doris MSP deciding to take no further action on behalf of the pursuer. Clearly the defender’s words had lowered the pursuer in the estimation of Mr Doris.

The defender’s defamatory statements about the pursuer resulted in Scottish Enterprise disregarding the pursuer’s rights as a former employee, whistleblower and complainant. Clearly the defender’s words had lowered the pursuer in the estimation of Scottish Enterprise.

It was simply false for the defender to pretend that the pursuer had exhausted the complaints and review procedures of Scottish Enterprise and the Scottish Public Services Ombudsman, that Scottish Enterprise National had taken the pursuer’s allegations seriously and had investigated them thoroughly on the day that they were made, that there was no substance to any of the allegations made regarding the receipt of European funds by Enterprise Ayrshire, that their enquiries were complete and there were no grounds for taking any action, that the European funds were handled absolutely correctly in legal and accounting ethical terms, that the bank statements had been reconciled only to the cash book, that as the entry had been made in the cash book for the ERDF income, no discrepancy arose, that had the cash book balance been subsequently reconciled to the bank account in the financial ledger the difference would have been highlighted, that there was no evidence that this reconciliation had been carried out, that the pursuer’s allegations that £187,000 of European funding had been omitted from the agency’s main computer for months but was put in a high interest bank account were utterly groundless and that the pursuer was incapable of accepting that the money was correctly received from Europe and correctly handled thereafter.

Taken as a  whole these false statements would undoubtedly tend to lower the pursuer in the estimation of right-thinking members of society generally, especially in view of the pursuer’s status as a qualified accountant and in the context of the pursuer’s valid objection to financial irregularities in a public authority.

The reconciliation in question is included in the productions. It shows that £187,069 had been omitted from the balance sheet, in accordance with Mr Gary Tracey’s unlawful directions to more junior finance staff, as other productions confirm.

Clearly the correction to the accounts on 18 August 1993 was forced by the pursuer’s crucial email dated 17 August 1993 to his supervisors in Enterprise Ayrshire, Mr Gary Tracey and Ms Janie Maxwell but the report makes no mention of this email which stated the following, reproduced here in italics for convenience:

‘For the record, as I said to you both today, I am not comfortable with your instruction to exclude from Enterprise Ayrshire’s balance sheet funds received from the EC.’

‘Your comment that the management accounts do not matter so much, being produced only for internal use, seems to underplay the potentially serious consequences of circulating figures that are incorrect.’

‘I stated to you both that I know this aspect of Scottish Enterprise’s finances is under investigation by the National Audit Office therefore you must accept my concern as genuine.’

‘I have been advised that such omissions from management accounts are in breach of the Institute’s ethical guidelines.’  

 

COND.5 The defender either knew that the words communicated about the pursuer were false, or communicated the damaging statements about the pursuer recklessly not caring whether or not the damaging statements were false, therefore the defender acted maliciously.

By communicating defamatory statements about the pursuer either knowing that they were false or recklessly not caring whether or not the statements were false, the defender acted without the defence of qualified privilege.

In these circumstances the defamatory statements are assumed to be false and the burden of proof is on the defender.

Under defamation law the falsity of a defamatory statement is rebuttably presumed leaving the defender with the onus of proving, as a defence, truth or veritas, according to Kenneth McK Norrie’s book, Defamation and Related Actions in Scots Law, Butterworths, (1995), at page 8.

 

COND.6 The pursuer is entitled to reparation from the defender for damaging the pursuer’s professional reputation, and solatium in respect of insult and hurt feelings.

Heads of damage and amounts claimed are solatium £50,000 and economic losses £0.

 

COND. 7 The defender has been called upon to make reparation to the pursuer but refuses or at least delays to do so. This action is accordingly necessary.

 

 

PLEAS-IN-LAW FOR THE PURSUER

 

1. The pursuer, having been defamed by the defender, is entitled to solatium.

 

2. The defender, having communicated the damaging words about the pursuer either knowing that the words were false or recklessly not caring whether or not the words were false, acted maliciously.

 

3. Since the defender acted maliciously, the defender acted without the defence of qualified privilege.

 

4. The sum sued for being a reasonable amount of reparation in respect of solatium for insult and hurt feelings, decree should be granted as craved.

 

 

 

17 September 2016

 
                

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