Thursday, 29 September 2016

INTRODUCTION TO THE BLOG


SCOTTISH ENTERPRISE

 

This story highlights the dangers involved in being a whistleblower. It relates how trying to resist instructions to falsify accounts in any establishment organisation, in this case Scottish Enterprise, can swiftly lead to unemployment, destruction of your professional reputation, homelessness and bankruptcy. In the longer term it can result in grinding poverty, social isolation, mental health problems, being falsely classified by the government as a persistent correspondent and a vexatious litigant. In my case I attained the dubious honour of being listed on the Court of Session website as the number one vexatious litigant in Scotland for 11 years so far (as at September 2016). Some years ago the Herald referred to me as Scotland’s most prolific vexatious litigant.A friend recently suggested that I ought to write a book entitled ‘Confessions of a Vexatious Litigant’. In reality however none of my cases was vexatious.

I obtained important evidence in February 2003 and passed it on to the police.

In July 2003 the police asked the Lord Advocate to raise a petition for me to be categorised as a vexatious litigant.                     

Consequently from a very early stage the police and the Crown Office had no intention of reviewing properly this evidence.  Instead they wanted to cover up the failures revealed in the evidence by having me legally disabled.

The following statement was contained in a copy of a letter sent from the police to the Police Complaints Commissioner for Scotland dated 16 March 2009 which was disclosed to me in 2010 by the Police Complaints Commissioner for Scotland under the terms of the Data Protection Act 1998:

‘In July 2003, the Force took out an Action against Mr Cairns to have him declared a Vexatious Litigant in terms of the Vexatious Actions (Scotland) Act 1878 (sic).’   

However, the police were supposedly reviewing this case until 2008.

The Legal Services Ombudsman for England and Wales concurred with the Faculty of Advocates’ Ms Valerie Stacey QC, now Lady Stacey, a judge at the Court of Session, who advised me that I had grounds for a formal complaint about the conduct of the Lord Advocate in this case for interfering with live civil actions and misdirecting the police.

That complaint was submitted to the government on my behalf by Mr Bill Aitken MSP but the response was that since Mr Colin Boyd QC had already resigned nothing could be done.

When I was employed through Search Consultancy as a temporary accountant at Enterprise Ayrshire in 1993 I already had over twenty years experience working in finance. However, I had never before been instructed to disregard the deliberate falsification of a bank account.

When that happened my supervisors were so confident about it that I wondered if Scottish Enterprise had special rules that I didn’t know about. They told me that the money, £187,069 received from the European Regional Development Fund, would be left out of the books in order to get interest for six months then put through the books just before the auditors arrived. I telephoned my professional accounts institute, CIMA, in confidence for advice. They confirmed that it was definitely unethical to leave the funds off the balance sheet.

When I sent an email to my supervisors about it, on 17 August 1993, things became a bit heated and I was threatened with dismissal by Ms Janie Maxwell.

I approached Scottish Enterprise National for support but the Head of Finance, Mr Tom Woodbridge, refused to support me.

The next morning the correction to the accounts was made but the financial director of Enterprise Ayrshire, Mr Andrew Downie, told me I had been badly advised. The problem was that I didn’t understand the funding arrangements in Scottish Enterprise. He terminated my contract a few minutes after telling me that. Of course since he had just authorised the correction his comments were nonsensical. 

Although shocked and angry, I felt that since I had taken copies of documents to support my position before confronting my bosses it would just be a matter of time for order to be restored by the authorities. I sent copies of bank statements, the note in the manual cash book that there was ‘no journal required’ for the £187,069, my reconciliation highlighting the omission, and my memorandum resisting the instruction to exclude it from the balance sheet, to Strathclyde Police, my professional body CIMA, and my MP. A couple of weeks later I showed the documents to the Herald and they published details.

However, the following month the Herald and several other newspapers published articles saying that investigations had found that there was ‘no substance to the allegations’. The Herald article quoted director Andrew Downie saying ‘Allegations of this nature can damage the probity which Enterprise Ayrshire insists on in all aspects of its operations and we are delighted that, after a thorough investigation, Strathclyde police have confirmed that there is no substance to the allegations.’

In the Scotsman the following appeared:

‘...... an inquiry into the alleged fraud at Enterprise Ayrshire, involving £187,000 of European regional development funding, had resulted in the LEC being given ‘’a clean bill of health’’. The allegations centred on a claim that the money was not entered in the company’s computerised accounts until two months after it was received, during which time it was placed in a high interest account....’

My career ended there. Within a few years I had also lost my car and my house and I was eventually declared bankrupt.

In February 2003 I obtained copies of the Scottish Enterprise report and the Strathclyde Police report with the help of the Data Protection Act.

The handwriting and initials on the police report matched that of the Scottish Enterprise investigating accountant. The police report appeared actually to have been produced by Scottish Enterprise.   

There was no mention that I had been questioning the omission in my reconciliation work and had objected in writing to the instruction to comply. Both reports falsely stated that there was no evidence that any reconciliation had been done highlighting the £187,069 difference. However, contrary to what had appeared in the press, both reports confirmed my allegation that the money had been received in June 1993 and should have been entered in that month but had not been entered into the accounts until 18 August 1993. Also, both reports mentioned that the money was transferred through three separate high interest bank accounts within a week and that there was in the manual cash book a note beside the receipt in question stating that there was no journal required. Clearly, such a note supported my allegation that the omission was deliberate, not an oversight.

Both reports failed to mention that the money was resting in an account in the name of my boss ‘C/O ENTERPRISE AYRSHIRE’.[1]

One of the documents I obtained in 2003 showed that in 1993 the government and Scottish Enterprise were well aware of the important documents omitted from the Scottish Enterprise and Strathclyde Police reports. The Scottish Office wrote to Scottish Enterprise:

‘.......I am afraid that, given the serious nature of Mr Cairns’ allegations, the contents of the documents which Mr Cairns took from Enterprise Ayrshire and the use which could be made of them by the press, this is an issue which is not likely to go away quietly.’

Publicly however the Scottish Office dishonestly tried to pass off these serious allegations as ‘an essentially technical accounting matter’.

The Scottish Office later wrote to me:

‘I should perhaps add that we naturally agree that correct accounting practice requires that receipts should be entered into accounts promptly and accurately. However if that does not happen, it does not necessarily follow that the person who omitted to complete the accounts promptly and accurately had fraudulent intentions.’

And what were the intentions of those responsible for instructing that there was ‘NO JOURNAL REQUIRED’ for the £187,069 and for simultaneously transferring the cash into high interest bank accounts marked ‘STRICTLY PRIVATE AND CONFIDENTIAL’ and ‘ALL ENQUIRIES TO ..... ANDREW DOWNIE  NO-ONE ELSE’ where it was resting in the name of my boss ‘C/O ENTERPRISE AYRSHIRE’?  What possible suspicion could arise from their furious reaction to my memorandum dated 17 August 1993 which mildly stated ‘I am not comfortable with your instruction to exclude from Enterprise Ayrshire’s balance sheet funds received from the EC’? All these details were contained in the documents available for investigation.  

I reported these matters to Strathclyde Police in 2003 and further investigations were carried out over a period of almost five years, ending in December 2007. But the Procurator Fiscal maintained the position first notified to me in 2005:

‘The evidence of one witness, no matter how credible or reliable, will not be sufficient. In this particular case the only witness alleging that criminal conduct took place by either the police officers or any personnel of Ayrshire Enterprise or the organisations that reviewed Ayrshire Enterprise’s intromissions with these funds is a single source, namely yourself.’

I requested clarification on that since I had already pointed out in a letter dated 11 February 2006:

‘I do not agree that in this particular case the only witness is a single source or that there is no corroboration of any of my allegations. According to Fiona Raitt’s book Evidence, Third Edition, W Green/ Sweet & Maxwell, (2001), at page 143:

‘The reference to ‘’two witnesses’’ must not be taken literally, since what is required is two independent items of evidence which may not necessarily be in the form of testimony (e.g. a forensic report, or the behaviour of the tracker dog in Patterson v Nixon above), but which point to the crucial fact which needs to be established. Corroboration is evidence that ‘’strengthens, or confirms, or supports a statement or the testimony of a witness’’ (Fox v HM Advocate, 1998 SLT 335 at 339.)’

In this particular case the available documents and reports provide independent items of evidence which point to the crucial facts which need to be established.’   

Although the prosecuting authorities don’t want to take action, the available documents and reports provide independent items of evidence supporting my version of events. There are compelling grounds for the government to ask Scottish Enterprise to re-open the investigation because that evidence shows that it was rigged and, as my MP Mr Michael Martin wrote to the government:

‘It would appear to me that Mr Cairns was punished for acting in a very honest and professional manner. I am at a loss to understand why the sum of £187,069 was omitted from the accounts of this public body for so long. I would be obliged if this matter could be fully investigated’.    

As CIMA stated years ago ‘.....in the event of the case being re-opened, the Institute believes that the action taken by Mr Cairns in reporting to his superiors the apparent discrepancy of £187,069 in the main account of Ayrshire Enterprise was entirely correct......’

Disclosures from Audit Scotland in 2009 included the following significant statements by Mr Jim Martin, reproduced here in italics for convenience:

Mr Cairns is correct in his view that the ERDF monies should have been included in the EA June Management Accounts and it looks as though they might have been omitted from the July accounts but for his actions ....................... Speculation on why the monies were not disclosed in the management accounts is academic at this stage but it does seem odd that he was allegedly instructed to exclude them from the July accounts.

Responses to Mr Cairns (sic) complaints from Scottish Enterprise and the Scottish Office Ministers dismiss the omission of the receipts as a technical accounting matter. That is disingenuous. Mr Cairns (sic) issue is about the deliberate misstatement of management accounts; there are governance issues here ................ The Board of EA were receiving these management accounts as was Scottish Enterprise, the principal funders. I see no reason why the ERDF monies should not have been shown in the first management accounts after their receipt. Scottish Enterprise should have been concerned that Mr Cairns was allegedly instructed to exclude them.

 

.............. If Mr Cairns is seeking recompense for his dismissal we should not get drawn in.

 

In 2010 a very unhelpful and inaccurate report by the Police Complaints Commissioner for Scotland, Professor John McNeill, was published and I received prominent adverse and unjustified publicity.

The most serious inaccuracy was the assertion that I had raised 82 complaints against the police. In fact I only raised 8 complaints over a period of 17 years, and I quickly withdrew 2 of these in any event because I recognised that the officers involved were young and inexperienced, so only 6 complaints proceeded.

On 10 November 2014 I wrote a letter to Mr Iain Scott, Scottish Enterprise’s Chief Financial Officer and Company Secretary, including the following:

‘I have obtained a copy of a letter written by SPSO Mr Jim Martin to Ms Lena Wilson on 31 March 2010 which includes the following statements, reproduced here in italics for convenience:’

‘‘I have recently reviewed several complaints that Mr Cairns has brought to us on this subject since May 2009. Having done so, it has become apparent to me that none of the issues he has raised are suitable for consideration by my office.’’

 

‘I can therefore prove that your notification to Mr Doris MSP on 27 November 2013 that I had exhausted the SPSO complaints and review procedures was false.’

 

‘You also misled Mr Doris on 27 November 2013 in respect of me having exhausted Scottish Enterprise’s complaints and review procedures.’ 

 

‘I informed you several months ago that I had never received any complaints response from Scottish Enterprise.’

‘I had also pointed this out to Scottish Enterprise in a letter to Ms Lena Wilson dated 10 December 2010 which included the following extract, reproduced here in italics for convenience:’

‘‘In a letter dated 24 November 2010 the Information Commissioner informed me that it had been decided that it was unlikely that Scottish Enterprise had complied with the DPA.’’

‘‘I was also informed that the Information Commissioner had asked Scottish Enterprise to provide me with a copy of the personal data I was entitled to receive as a matter of urgency.’’

‘’It is therefore a matter of very serious concern that your letter dated 3 December 2010 and disclosures still do not satisfy the requirements of the Act as detailed below:’’

‘‘1. No disclosures of Scottish Enterprise’s responses to any complaint from me have been provided.’’

‘No complaints responses were disclosed to me even after that letter.’

‘The Information Commissioner had already confirmed to me that information relating to my complaints is regarded as personal data for the purposes of the Data Protection Act 1998.’

‘So as you can see I already formally requested these documents under the terms of the Data Protection Act but Scottish Enterprise failed to produce them.’

‘Therefore there is clear evidence that your statements to Mr Doris in respect of both the SPSO and Scottish Enterprise were false and damaging towards me, an ex-employee, complainant and whistleblower to whom Scottish Enterprise owes a duty of care.’

 

‘A reasonable suspicion arises that you made these false statements in order to avoid addressing the pertinent questions Mr Doris had raised in his letter to Ms Lena Wilson dated 5 November 2013 with reference to the statements about my case in Ms Lena Wilson’s letter to Ms Patricia Ferguson MSP dated 30 May 2012 that ‘the accounting requirements for Local Enterprise Companies were clarified’ and ‘no evidence of fraud or wrongdoing was found’.’

‘Those questions are reproduced below in italics for convenience:’

‘‘Can you elaborate on what clarification was provided and to whom? Were Enterprise Ayrshire’s accountants unaware of their obligations to log cash receipts on time? Was Enterprise Ayrshire unaware that accounting standards apply to LECs?  If no wrongdoing had occurred, why was it necessary to clarify the requirements? I gather that an additional £187,069 was retrospectively added to the accounts following the investigation. Again, if accounting standards had been followed, why was this necessary?’’

 

‘Mr Doris tried again in vain to obtain answers to these questions in his letter to you dated 7 March 2014 in which he included the following, reproduced here in italics for convenience:’

 

‘‘Thank you for your letter of 27 November 2013 regarding Mr Cairns, which I enclose for reference.’’

 

‘‘Having reviewed the case, I note you allude in that letter to Mr Cairns having exhausted your complaints procedures. That being the case, it would be most helpful if you could inform me how the complaints process dealt with the questions raised in the penultimate paragraph of my most recent letter, which I also enclose.’’

 

Scottish Enterprise continues to evade the issue and to conceal material evidence.

Disclosures from Scottish Enterprise in July 2016 in respect of communications to Police Scotland from Scottish Enterprise’s Chief Finance Officer and Company Secretary, Mr Iain Scott, provided important new evidence.

Mr Scott’s inclusions of the Strathclyde Police report on Enterprise Ayrshire and other productions in the scanned documents he sent to Police Scotland on 15 April 2016, which report Scottish Enterprise knows was in fact produced by one of their accountants Ms Mandy Dickson and not by the police at all, give rise to some important considerations:

 

     (a)     The police informed me that their copy of this report had been destroyed several years ago, around the year 2000.

 

Its provision to Police Scotland by Scottish Enterprise now permits perusal of its contents in the light of the available evidence.        

 

     (b)     The first matter of concern is the amount of evidence concealed by Scottish Enterprise and the police, including in the recent review, as already detailed above and further detailed below.         

 

     (c)     In his communication with DC Stewart Mr Scott included a scanned copy of my reconciliation showing the omission of the £187,069 in question from the company’s balance sheet as at 2 July 1993.

 

The report falsely stated that there was no evidence that this reconciliation had been carried out.

 

     (d)     In his communication with DC Stewart Mr Scott included a scanned copy of my email to Mr Gary Tracey and Ms Janie Maxwell dated 17 August 1993 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.’  

 

The report completely excluded this very important evidence.

 

    (e)     In his communication with DC Stewart Mr Scott included a scanned copy of the extract from the manual cash book showing the following words at the record of £187,069 received on 25 June 1993, reproduced here in italics for convenience:

 

‘NO JOURNAL REQUIRED AS PER G.TRACEY’

 

The report referred to a later version where the words ‘TO GO THROUGH JULY ACCOUNTS’ had been added.

    

The report offered no explanation for this note, which corroborated my allegation of having been instructed by Mr Gary Tracey to falsify the accounts in respect of this receipt from the European Regional Development Fund.

 

Further corroboration is provided by the actions of other finance staff who acted in accordance with Mr Tracey’s fraudulent instructions to falsify the accounts

 

(f)     In his communication with DC Stewart Mr Scott included a scanned copy of the SE report which concluded the following, reproduced here in italics for convenience:

 

 

‘The receipt of ERDF money was brought into the July financial ledger on 18 August. The money was received in June 1993 and should therefore have been accounted for in this month.’

 

 

This conclusion justifies my concern about the Enterprise Ayrshire accounts as they stood when I wrote my email on 17 August 1993.

 

(g)     In his communication with DC Stewart Mr Scott included a scanned copy of a press release in the following terms, reproduced here in italics for convenience:

 

 

‘STATEMENT GIVEN TO KIRSTY SCOTT, THE HERALD regarding allegations of mis-accounting at Enterprise Ayrshire’

‘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.’

 

‘Issued by the Press Office of Scottish Enterprise’

‘September 1, 1993’

 

Since the accounts had been corrected by £187,069 within hours of my written objections to the financial irregularities, plainly the press release was false.

 

Mr Scott included a scanned copy of this press release in his communication with DC Stewart. Clearly, Mr Scott is persisting in concealing material evidence and knowingly providing false information to the police to this day, a very grave matter.

 

 

Separately, there were several other new items of evidence submitted recently to Police Scotland which have either not been adequately considered or not considered at all by Scottish Enterprise, or by the police or by the Crown Office.

 

These appear to have been completely disregarded, which indicates beyond reasonable doubt that the police have colluded with Scottish Enterprise in a disgraceful attempt to undermine my credibility, to conceal material evidence, to avoid carrying out a proper investigation into alleged criminality and to pervert the course of justice in this case.

 

In his communication with DC Stewart dated 15 April 2016 Mr Iain Scott, Scottish Enterprise’s Chief Financial Officer and Company Secretary, indicated in the following terms that he would shortly be providing a statement on this case for Police Scotland:

 

 

‘I look forward to hearing from you next week regarding you coming in to our office to take a statement.’

 

 

Mr Scott’s statement did not lead to any report from Police Scotland to the Crown Office and Procurator Fiscal Service, which raises a reasonable suspicion that in his statement Mr Scott misrepresented the evidence he had attached to his email to DC Stewart on 15 April 2016.

Mr Scott had provided a copy of the original Scottish Enterprise report and other scanned documents that are rather obviously incompatible with that manifestly defective report, without qualification, comment or explanation, indicating that important evidence had been concealed by Scottish Enterprise in 1993 and again in April 2016.

Why then was no report submitted to the Crown Office and Procurator Fiscal Service following on from the review by Detective Chief Inspector Kenneth Thomson, Detective Sergeant Steven Adams and Detective Constable Yuan-nee Stewart which was completed in May 2016?

In these circumstances the fact that no report from Police Scotland has been submitted to the Crown Office and Procurator Fiscal Service cannot be relied upon to mean that there was no reasonable suspicion of criminality that ought to have been reported by the Police.   

 

In August 2016 I submitted a draft writ against Mr Scott for defamation to the Court of Session requesting permission to proceed in accordance with the requirements of the vexatious actions order made against me in 2005.

Lord Woolman refused permission stating that ‘the averments are not defamatory’.

An expanded version was refused by Lady Rae stating that there is effectively no difference between this writ and that which was refused because the averments do not disclose any remarks which would be classed as defamatory.

Again, a further expanded version was refused by Lord Pentland stating that the further changes to the Initial Writ have done nothing to render this proposed action a relevant one and that none of the statements complained of is even arguably defamatory of the pursuer.

A final version was refused by Lord Brailsford stating ‘I do not think anything of importance has been added to the latest version of the writ. The new averments are no more than a narration of additional facts, they do not address the concerns of Lord Woolman, Lord Pentland or Lady Rae. The case remains one where there is, in my view, nothing averred which is either defamatory or capable of hearing (sic) a defamatory innuendo.’

The final version of the draft writ is reproduced below:

 

 

 

 

 

 

 

 

 

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

 

               



[1]  However, the so-called police report did include a copy of a bank statement containing this information.

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