CUMBERNAULD HOUSING PARTNERSHIP Ltd trading as SANCTUARY-áCUMBERNAULD Pursuers and Respondents against JANICE DAVIES Defender and Appellant
| Jurisdiction | Scotland |
| Judge | Sheriff Court |
| Judgment Date | 18 March 2015 |
| Neutral Citation | [2015] CSIH 22 |
| Docket Number | No 42 |
| Court | Court of Session (Inner House) |
| Date | 18 March 2015 |
[2015] CSIH 22
Extra Division
Sheriff Court
Prescription – Quinquennial prescription – Whether the liability of an owner of a tenement flat for management costs subject to quinquennial prescription – Prescription and Limitation (Scotland) Act 1973 (cap 52), sec 6, sch 1, paras 1(ac), (e), 2(e) – Tenements (Scotland) Act 2004 (asp 11), sec 12
Prescription – Quinquennial prescription – Relevant claim – Whether registration of notice of potential liability in terms of the Tenements (Scotland) Act 2004 constitutes a relevant claim for that liability – Prescription and Limitation (Scotland) Act 1973 (cap 52), sec 9(1) – Tenements (Scotland) Act 2004 (asp 11), sec 12
Evidence – Sufficiency – Proof of works done and costs incurred lead by means of an employee of pursuers speaking to pursuers' statements of account and invoices – Whether sufficient evidence that pursuers performed works and incurred costs
Section 6 of the Prescription and Limitation (Scotland) Act 1973 (cap 52) (“the 1973 Act”) provides that where certain obligations set out in sch 1 to the Act subsist for a continuous period of five years without any relevant claim or relevant acknowledgment having been made, those obligations shall become extinguished (“quinquennial prescription”). Section 9(1) provides that a relevant claim includes ‘the execution by or on behalf of the creditor in an obligation of any form of diligence directed to the enforcement of the obligation.’ Section 10(1) provides that that a relevant acknowledgment includes ‘such performance by or on behalf of the debtor towards implement of the obligation as clearly indicates that the obligation still subsists’. Paragraph 1(ac) of sch 1 provides, ‘any obligation to pay a sum of money by way of costs to which section 12 of the Tenements (Scotland) Act 2004 applies’ shall be subject to quinquennial prescription. Paragraph 1(e) of sch 1, read together with para 2(e), provides that contractual obligations are subject to quinquennial prescription except where the obligation is one ‘relating to land’.
The Tenements (Scotland) Act 2004 (asp 11) makes provision, inter alia, for the recovery of costs in respect of a maintenance scheme for tenement flats. Section 12 provides that the owner of a tenement flat remains liable for such costs notwithstanding that they might cease to be an owner. That section further provides that a new owner will be liable jointly and severally with the former owner for the costs of such a scheme. One condition of such liability is that a notice of potential liability for costs is registered with the Land Register at least 14 days before the new owner acquires ownership.
Factors provided management services in respect of a flat. On 14 February 2008 and 2 February 2011 the factors registered sec 12 notices of potential liability for costs in respect of the defender's flat. On 15 April 2011 they raised an action for payment of those costs against the proprietor of the flat. The defences were skeletal, with a standard plea to relevancy and specification and another as to prescription; there was no plea to the effect that the pursuer's averments were unfounded in fact. At proof, the only witness led was the factors' officer who spoke to statements of account and invoices produced in process. Although the sheriff found that witness to be credible, the sheriff assoilized the proprietor on the basis that the evidence lead was not sufficient to prove the factors' averments. The sheriff held in any event that any sums becoming due before 15 April 2006 had prescribed. The proprietor appealed. The sheriff principal allowed the appeal holding that the evidence lead was sufficient to prove the factors' averments as to their appointment, the work done, and the costs they incurred. The sheriff principal further held that correspondence in October 2010 followed by part payment by the defender in the following month constituted a new contract to pay the entirety of the costs incurred (including those which had hitherto prescribed).
The proprietor appealed and argued that: (1) there was an insufficiency of evidence to prove that any works had been done or costs incurred thereto; and (2) the sheriff principal was not entitled to find that that a new contract had been constituted.
The factors argued in addition that: (1) the management costs were not subject to quinquennial prescription, as they were obligations relating to land; (2) in any event, relevant claims had been made when the notices of potential liability for costs had been registered; and (3) if the part payment following the correspondence of October 2010 did not constitute a new contract, it was a relevant acknowledgment of the debt in so far as it had not prescribed.
Held that: (1) the obligation to pay a share of factoring costs was subject to extinction by quinquennial prescription (para 20); (2) the registration of sec 12 notices did not interrupt prescription (para 25); (3) in the circumstances, resumption of payment qualified as performance towards implement of such liability as had not already prescribed (para 29); (4) the sheriff would have found the evidence sufficient to establish the share of factoring fees and costs due (para 32); (5) the pursuers had not pled a case of a new contract in October or November 2010 and therefore could not argue it (para 34); and appeal allowed in part.
Henderson v Foxworth Investments Ltd 2014 SC (UKSC) 203 and McGraddie v McGraddie2014 SC (UKSC) 12distinguished.
Cumbernauld Housing Partnership ltd trading as Sanctuary Cumbernauld raised an action for payment against Janice Davies at the sheriff court in Airdrie. On 23 September 2013, after a proof, the sheriff granted decree of absolvitor. The pursuers appealed to the sheriff principal. On 31 March 2014, the sheriff principal (IR Abercrombie QC) sustained the appeal, recalled the decree of the sheriff and granted decree for payment. The defender appealed to the Court of Session.
Advocate (Lord) v Royal Bank of Scotland LtdSC 1977 SC 155; 1978 SLT 38
Ellon Castle Estates Co Ltd v MacDonald 1975 SLT (Notes) 66
Henderson v Foxworth Investments Ltd sub nom Liquidator of Letham Grange Development Co Ltd v Foxworth Investments Ltd [2014] UKSC 41; 2014 SC (UKSC) 203; 2014 SLT 775; 2014 SCLR 692; [2014] 1 WLR 2600; 158 (27) SJLB 37
McGraddie v McGraddie [2013] UKSC 58; 2014 SC (UKSC) 12; 2013 SLT 1212; [2013] 1 WLR 2477
O'Donnell v Murdoch McKenzie & Co LtdSC 1967 SC (HL) 63; 1967 SLT 229; 3 KIR 299
Richardson v Quercus LtdSC 1999 SC 278; 1999 SLT 596; 1999 SCLR 133
Ross v Associated Portland Cement Manufacturers LtdWLR [1964] 1 WLR 768; [1964] 2 All ER 452; 62 LGR 513
Smith v Stuart [2010] CSIH 29; 2010 SC 490; 2010 SLT 1249
Dickson, WG, A Treatise on the Law of Evidence in Scotland (3rd Grierson ed, T & T Clark, Edinburgh, 1887), paras 114(4), 1104
Erskine, J, An Institute of the Law of Scotland (3rd ed, Bell and Bradfute, Edinburgh, 1793), IV, ii, 4
Graham Stewart, J, A Treatise on the Law of Diligence (W Green, Edinburgh, 1898), p 1
Gretton, GL, ‘Diligence and Enforcement of Judgments’ in Stair Memorial Encyclopaedia:The Laws of Scotland (Butterworths/Law Society of Scotland, Edinburgh, 1992), vol 8, para 101
The cause called before an Extra Division, comprising Lord Brodie, Lord Malcolm and Temporary Judge Sheriff Principal MM Stephen QC, for a hearing on the summar roll, on 3 March 2015.
At advising, on 18 March 2015, the opinion of the Court was delivered by Lord Brodie—
[1] The defender and appellant (“the defender”) is the proprietor of a flatted property, 12C Scott House, Seafar, Cumbernauld. This flat is on the eleventh floor of the block known as Scott House. The defender purchased her flat from and was granted a disposition of it by the Cumbernauld Development Corporation. Her title was registered on 5 March 1992 with title no DMB44814. Her title includes rights of common ownership and other rights in respect of Scott House. The title is subject to real burdens including those imposed as conditions eleventh and sixteenth in entry no 1 and conditions fourth, fifth and thirteenth in entry no 2. Inter alia, these burdens impose an obligation to share in the cost (to the extent of 1/45, reflecting the number of flats in the block) of maintenance of the parts and pertinents which are common and mutual to the several proprietors. Condition eleventh in entry no 1 gave an option to the development corporation, as the then feudal superior, to act as factor for the block with a view to the management of the maintenance of the common parts. In the event of the superior declining to act provision is made for the proprietors appointing a factor with the various powers conferred on the factor by the relevant condition. Among the powers conferred on the factor is that of suing in its own name.
[2] The pursuers and respondents (“the pursuers”) are Cumbernauld Housing Partnership Ltd. They are successors in title to Cumbernauld Development Corporation in respect of subjects including Scott House and the whole rights effeiring thereto, in terms of disposition in their favour by Scottish Homes dated 10 November and registered in the Land Register of Scotland on 14 December 2000. In this action the pursuers aver that they were appointed factors and provided management services in respect of the defender's flat. They sue for £9,574.50 as the sum outstanding in respect of fees for these management services and costs expended in carrying them out. An element in the sum sued for relates to what is stated to be due by the defender to the common repair fund.
[3] The action was raised in the sheriff court at Airdrie on 15 April 2011. Prior to that, on 14 February 2008 and again on 2 February 2011, the pursuers had registered with the Land Register of Scotland, notices of the...
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