PE Limited v Tominey [2025] CSOH 74
In this case, two software developers sought to recall a section 1 order under the Administration of Justice (Scotland) Act 1972. Their former employer was the petitioner. The order was granted without the respondents being aware of the proceedings or being represented. Commissioners were appointed, and the order also allowed them to enter residential properties to take possession of items set out in the schedule (e.g. computers). The petitioner based its submissions for the order on the grounds that it owned the copyright in the software produced and that the source code was a core asset. It also argued that the former employees were aware that the source code was confidential and that they had then started a rival business.
The petitioner’s position was that the former employees were using or had adapted the source code.
At the hearing to recall the order, the former employees’ position was that the petitioner had not disclosed materially relevant factors to the court when it sought the section 1 order. The court found that, in relation to three specific matters, there had not been adequate disclosure. Some of the terminology used in the petition had created an impression that was incorrect. This resulted in the order being recalled.
The decision serves as a reminder that there is a duty on those seeking such orders to be candid in their disclosure of any relevant circumstances that the court should be made aware of, whether those are supportive of their position or not. In this case, as the order allowed access to someone’s home, the court was required to carry out a balancing exercise between the competing aims of protecting the petitioner’s rights and the respondents’ right to privacy.
Ruby Properties (Scotland) Limited v James and Kathleen Watt [2025] CSOH 61
This was a commercial action for breach of warranties by the sellers under a share purchase agreement. The warranties related to a subsidiary company’s accounts. The subsidiary company operated a flight training school which ran a degree course. Tuition fees for the course were required to be paid in advance.
The pursuer argued that the accounting treatment of the fees was incorrect: the fees should have been deferred and shown in the accounts as a liability (instead, they were treated as income). The pursuer’s position was that it had suffered a loss of around £910,000.
Best evidence rule
A key part of the pursuer’s evidence was a spreadsheet prepared by one of its witnesses. This was objected to (as was much of the pursuer’s evidence) as being inadmissible. The pursuer also did not lodge the 2020 accounts.
The decision sets out the scope of the best evidence rule, which is, except in certain circumstances, to exclude secondary evidence of physical objects or documents not produced in the court action. In this case, the court found that the 2020 accounts were a critical piece of evidence for the pursuer to establish the breach of warranty. Secondary evidence about the figures and the content of the accounts was therefore inadmissible.
A spreadsheet prepared by one of the pursuer’s employees was admissible, but the court took the objections into account when considering what weight to give to it.
Breach of warranties
The court held that one of the warranties had been breached, as the 2020 accounts had been prepared using a different methodology from the 2017 accounts. This had not been disclosed by the defender, and so they were in breach of warranty, but only in relation to the 2017 accounts.
The case highlights the importance of using the correct evidence to support your case.
Kidd v Lime Rock Management LLP and others [2025] CSIH 11
This was an appeal of a decision by the Commercial Court in an unlawful means conspiracy case. The background was that the pursuer alleged that a private equity house and a solicitor had induced him to enter an investment and share purchase agreement. The pursuer claimed this resulted in him losing $150 million. The commercial judge held that there was no such conspiracy.
The pursuer needed to prove that two or more people had combined to take unlawful action intending to, and successfully, cause damage to him. However, he was unable to prove that there was any express or tacit agreement between the defenders to cause him loss, and so the court said his case fell at the first hurdle.
The court also found that the commercial judge did not require to take into account the motives or intentions of a third party when deciding whether that party was dishonest. It was sufficient for the subjective beliefs of the defenders regarding the party’s conduct to be considered.
On factual causation, the court held that Mr Kidd would have gone ahead with the transaction regardless of any unlawful means conspiracy and so he had not established that the alleged wrongdoing resulted in the loss.
It is not often that unlawful means conspiracy claims are reported on in Scotland, although they are becoming a more common feature of disputes. This is therefore a useful decision in setting out what a pursuer requires to prove to be successful.
Caledonia Water Alliance v Electrosteel Castings (UK) Ltd [2025] CSIH 21
This was an Inner House decision about the formation of contracts. An action for breach of contract and damages was raised by a water company against a pipe supplier. Each party automatically attached its standard terms and conditions to its communications. The water company argued that the Scottish Water framework agreement terms applied.
The Inner House held that the usual offer and acceptance rule did not apply where a reasonable person would have concluded that the parties did not intend to contract on the basis of the last set of terms. The court also said that there is a high bar to be met where such an inference is made. A key reason for this decision was that the parties’ terms and conditions were automated, and so the court concluded that the parties did not intend to contract on that basis. The framework agreement therefore applied.
This decision was an interesting one, as it is not often that a court decides that neither party’s terms and conditions applied to the contract.
Legal & General Assurance (Pensions Management) Ltd v Halliday Fraser Munro and others [2025] CSIH 24
This was an appeal against a decision not to dismiss claims by the owner of a multi-storey office building against an architects’ firm. The architects’ position was that the pursuer had already suffered loss by the time the collateral warranty was entered. The court held that it did not matter that the collateral warranty was entered into after the pursuer bought the building.
The architects also argued that the pursuer’s case was time-barred, as more than five years had passed since practical completion of the building. The Inner House held that there was no default rule that a collateral warranty must have the same prescriptive period as the original contract. It was a distinct contract with its own rights, and the parties had not expressly or impliedly sought for the same prescriptive period to apply as that of the original contract.
This decision is of importance as it distinguished the leading authority on collateral warranties (British Overseas Bank Nominees Ltd v Stewart Milne Group [2020] SC 245). The architects are seeking permission to appeal to the Supreme Court, so this will be a case to watch in 2026.
There was much to reflect on in 2025, and we very much expect that 2026 will be no different.
