Greater Glasgow Health Board v Baxter Clark & Paul
| Jurisdiction | Scotland |
| Judgment Date | 23 January 1990 |
| Docket Number | No. 24. |
| Date | 23 January 1990 |
| Court | Court of Session (Outer House) |
OUTER HOUSE.
Lord Clyde.
Personal bar — Prescription — Quinquennial prescription — Relevant acknowledgement of subsistence of an obligation — Purported relevant acknowledgement executed and given in deed by obligants to obligees stating that causes of loss and damage not practicably ascertainable — Whether obligants personally barred from contradicting that.
Prescription — Quinquennial prescription — Obligees refraining from making claim by reason of error induced by obligants' conduct — Whether specific case made out by obligees for error induced by obligants' conduct — Prescription and Limitation (Scotland) Act 1973 (cap. 52), sec. 6.1
Prescription — Quinquennial prescription — Relevant acknowledgement of subsistence of an obligation — Purported relevant acknowledgement executed and given in deed by obligants to obligees purportedly within quinquennium — Whether deed a relevant acknowledgement sufficient to halt the prescription — Prescription and Limitation (Scotland) Act 1973 (cap. 52), sec. 10.1
Prescription — Quinquennial prescription — Reparation — Terminus a quo — Date on which obligation to make reparation became enforceable — Whether terminus a quo date that obligees became aware that loss and damage caused by negligence — Whether terminus a quo deferred by lack of awareness of identity of obligants — Prescription and Limitation (Scotland) Act 1973 (cap. 52), sec. 11.1
Section 6 (1) of the Prescription and Limitation (Scotland) Act 1973 enacts, inter alia, that:—"If, after the appropriate date, an obligation to which this Section applies has subsisted for a continuous period of five years — (a)without any relevant claim having been made in relation to the obligation, and (b) without the subsistence of the obligation having been relevantly acknowledged, then as from the expiration of that period the obligation shall
be extinguished …". Section 6 (4) enacts, inter alia, that:—"In the computation of a prescriptive period in relation to any obligation for the purposes of this section — (a) any period during which by reason of … (ii) error induced by words or conduct of the debtor or any person acting on his behalf, the creditor was induced to refrain from making a relevant claim in relation to the obligation … shall not be reckoned as, or as part of, the prescriptive period. Provided that any period such as is mentioned in paragraph (a) of this subsection shall not include any time occurring after the creditor could with reasonable diligence have discovered the … error … referred to in that paragraph." Section 10 (1) enacts, inter alia,that:—"The subsistence of an obligation shall be regarded for the purposes of sections 6 and 7 of this Act as having been relevantly acknowledged if, and only if, either of the following conditions is satisfied, namely — (a) that there has been such performance by or on behalf of the debtor towards implement of the obligation as clearly indicates that the obligation still subsists; (b) that there has been made by or on behalf of the debtor to the creditor or his agent an unequivocal written admission clearly acknowledging that the obligation still subsists." Section 11 (1) enacts, inter alia, that:—"Subject to subsections (2) and (3) below, any obligation … to make reparation for loss, injury or damage caused by an act, neglect or default shall be regarded for the purposes of section 6 of this Act as having become enforceable on the date when the loss, injury or damage occurred." Section 11 (3) enacts, inter alia, that:—"In relation to a case where on the date referred to in subsection (1) above … the creditor was not aware, and could not with reasonable diligence have been aware, that loss, injury or damage caused as aforesaid had occurred, the said subsection (1) shall have effect as if for the reference therein to that date there were substititued a reference to the date when the creditor first became, or could with reasonable diligence have become, so aware."In 1966 the pursuers appointed the defenders as architects for the reconstruction of a hospital. The pursuers entered into a contract with a building company for the carrying out of the project and the works were executed between about 1969 and 1971. The defenders issued a practical completion certificate in March 1972. Defects became apparent in certain areas of the hospital from 1972. An action for damages was served on the defenders in November 1982. The pursuers case rested on five grounds, namely (a) that they were not aware and could not with reasonable diligence have become aware that they had sustained loss, injury or damage caused by negligence of the defenders until after 3rd March 1978 being the date of a deed of acknowledgement concerning defects signed by the defenders1; (b) that during the period from 1972 to 1978 they were induced to refrain from making a claim against the defenders by reason of error to the effect that the building failures were attributable to acts and omissions of the building contractor alone which error was induced by words and conduct of the defenders on whom they had relied for advice throughout that period; (c) that the defenders had made a relevant acknowledgement in terms of sec. 10 of the Prescription and Limitation (Scotland) Act 1973 by said deed; (d) that the defenders were personally barred from maintaining that they, the pursuers, knew or ought to have known the full extent and nature of the building defects or the causes thereof prior to 3rd March 1978; and (e) that they refrained from making a claim in the belief that no claim had properly arisen and that any claim which had arisen or might have arisen during the currency of the deed was relevantly acknowledged. The defenders averred that the obligation had been extinguished by the operation of quinquennial prescription. The cause came before the court on procedure roll solely to determine the application of the Prescription and Limitation (Scotland) Act 1973.
Held (1) that, in respect of the pursuers' first ground, subsec. 11 (3) required knowledge that the loss, injury or damage was caused by negligence, but that subsec. 11 (3) was not available with a view to deferring the start of the prescriptive period when the creditor knew of the loss, knew that it was caused by negligence, but did not know the identity of the obligant; (2) that consequently the fact that the pursuers believed that their loss was due to a construction fault rather than a design fault did not prevent the five year period from starting to run against them in relation to the defenders; (3) that subsec. 11 (3) required the pursuers to establish that they could not, with reasonable diligence, have become aware that loss, injury or damage "caused as aforesaid" had occurred; (4) that the pursuers' pleadings failed to establish this; (5) that, in respect of the pursuers' second ground, the application of sec. 6 (4) (a)(ii), where one was dealing with alleged representations which were said to have induced a particular state of mind, the defenders were entitled to some detail of what they were alleged to have said or done so that the consequences of it could be considered; (6) that the averment in this regard was quite unspecific and gave no fair notice to the defenders of the case which they were required to answer; (7) that the obligation was thus extinguished by reason of prescription before 1978; (8) that consequently the pursuers' third and fourth grounds, which were made on the assumption that the obligation was still subsisting in 1978, accordingly fell; and defenders' first plea-in-law sustainedand action dismissed.
Opinion, that in any event, (1) in respect of the pursuers' third ground, the basis for a relevant acknowledgement for the purposes of sec. 10 must be a clear and unequivocal recognition that an obligation subsists; (2) the deed in this case fell short of those requirements as it could not be regarded as an unequivocal admission which clearly acknowledged that the obligation which was now alleged existed then; (3) in respect of the pursuers' fourth ground, the pursuers had not given fair notice of the argument of estoppel by deed which they came to present; (4) the plea was misconceived as it tied awareness to the element of the defenders' negligence and the defenders were not now arguing that awareness of the identity of the negligent party was essential; and (5) in respect of the pursuers' fifth ground, the averment was unspecific and irrelevant as an answer under sec. 6 (4) (a) (ii).
Dunfermline D.C. v. Blyth and Blyth AssociatesUNK 1985 S.L.T. 345, per Lord McDonald at p. 345, approved.
Peco Arts Inc. v. Hazlitt Gallery Ltd.WLR [1983] 1 W.L.R. 1315, at pp. 1325–1326 approved.
Fortunato's J.F. v. FortunatoUNK 1981 S.L.T. 277 andLieberman v. G. W. Tait & SonsUNK 1987 S.L.T. 585,approved.
Observed that it could not be reasonably taken from the pleadings that what the pursuers were here averring was a multiplicity of causes of action in relation to each of which different considerations might arise, particularly so far as prescription was concerned and so it was not open for the pursuers to raise this argument.
Greater Glasgow Health Board brought an action against Messrs Baxter Clark and Paul for damages of £7,250,000 arising out of breach of contract and negligence. The pursuers' averments and the defenders' answers thereto were, inter alia, as follows:—"(COND. II). By exchange of letters between the parties dated 2nd and 6th June 1966 the defenders were appointed by the pursuers as architects for the...
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