Highlands And Islands Airports Limited V Shetland Islands Council
| Jurisdiction | Scotland |
| Judge | Lord Menzies,Lord President,Lord Drummond Young |
| Judgment Date | 21 April 2015 |
| Neutral Citation | [2015] CSIH 30 |
| Court | Court of Session |
| Date | 21 April 2015 |
| Published date | 21 April 2015 |
| Docket Number | [A532/11] |
FIRST DIVISION, INNER HOUSE, COURT OF SESSION
[2015] CSIH 30
[A532/11]
Lord President
Lord Menzies
Lord Drummond Young
OPINION OF THE LORD PRESIDENT
in the Reclaiming Motion
in the cause
HIGHLANDS AND ISLANDS AIRPORTS LIMITED
Pursuer and Respondent;
against
SHETLAND ISLANDS COUNCIL
Defender and Reclaimer:
Act: Reid QC, Duthie; Burness Paull LLP
Alt: Keen, QC, MacColl; Brodies LLP
21 April 2015
Introduction
[1] This is a reclaiming motion from an interlocutor of the Lord Ordinary dated 4 February 2014. It raises a question as to the interpretation of sections 6 and 9 of the Prescription and Limitation (Scotland) Act 1973 (the 1973 Act) and, in particular, a question as to the meaning of the expression “relevant claim” in section 6(1)(a).
The Prescription and Limitation (Scotland) Act 1973
[2] Sections 6 and 9 of the 1973 Act, so far as relevant, provide as follows:
“6 Extinction of obligations by prescriptive periods of five years
(1) 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 …
9 Definition of ‘relevant claim’ for purposes of sections 6, 7 and 8
(1) In sections 6 [7 and 8A] of this Act the expression “relevant claim” in relation to an obligation, means a claim made by or on behalf of the creditor for implement or part-implement of the obligation, being a claim made-
(a) in appropriate proceedings; …”.
The action
[3] The pursuer operates Sumburgh Airport, Shetland. In 2005 it entered into a contract with the defender for professional services in relation to a runway extension. On 1 November 2011 the pursuer raised this action. It concluded inter alia as follows -
(1) for declarator that the defender is in breach of its contract with the pursuer
entered into in or about January 2005 for the provision by the former to the latter of professional services relative to the extension of runway 09/27 at Sumburgh Airport, Zetland, et separatim is in breach of its duty of care to the pursuer in relation to the provision of those services; and that it is accordingly liable to the pursuer in damages et separatim in reparation for the loss suffered by the pursuer as a result of those breaches or either of them;
(2) for declarator that in the provision of services by the defender to the pursuer
under the contract for the provision of professional services by the former to the latter in connection with the extension of runway 09/27 at Sumburgh Airport, Zetland, entered into between them in or about January 2005, “defects” within the meaning of clause 41 of that contract have arisen, and that the defender having failed to correct the same, it has become liable to pay the pursuer the cost of repairing the same pursuant to that clause.”
[4] There was no conclusion for payment of damages because, according to the pursuer, the extent of the alleged loss could not then be properly quantified. It is agreed that the action was raised within the prescriptive period.
[5] In May 2013 the pursuer lodged a proposed amendment to add a conclusion for payment by the defender of £14,210,000, with interest. In October 2013 the closed record was opened up and amended accordingly. It is agreed that by then the prescriptive period had expired. In answer 34.1 the defender pled that when the action was raised, it had declaratory conclusions only. Therefore the summons advanced no claim for implement of any obligation on the part of the defender to make reparation to the pursuer.
[6] The Lord Ordinary heard parties on the Procedure Roll on the defender’s fourth and fifth pleas in law; namely –
“4. Esto the defender would otherwise be under any obligation to make payment to the pursuer by way of reparation or under the contract (which is denied), any such obligation having been extinguished by the operation of prescription, the defender should be assoilzied.
5. The pursuer’s declaratory conclusion not being claims for implement of any obligation to make reparation arising under the parties’ contract or in delict, those conclusions have not interrupted the running of prescription and, accordingly, the pursuer’s averments in Article 34.1 are irrelevant and should be excluded from probation.”
The decision of the Lord Ordinary
[7] The Lord Ordinary accepted the pursuer’s submission that she should adopt a purposive approach to the statutory interpretation of sections 6 and 9. She accepted that account could be taken of authorities that preceded the Act. She also took account of the recommendations and approach of the Scottish Law Commission, on whose Report, Reform of the Law Relating to Prescription and Limitation of Actions (Scot Law Com No 15 (1970)), the 1973 Act was based; and in particular, its proposal to “clarify, co-ordinate and modernise” the law of prescription rather than to introduce new law or signify a change from the underlying principles of the common law. In essence the Lord Ordinary concluded that since prescription involved curtailment of rights, the legislation fell to be construed in a way that minimised that effect. She considered that the action specified the nature of the alleged liabilities in detail. Only the quantification of loss was absent. In this respect the case was to be distinguished from Wylie v Avon Insurance Ltd (1988 SCLR 570), to which I shall refer, since the obligation in question in that case was not addressed in the declaratory conclusion. This case did not seek declarator of the mere existence of obligations, it specified the nature of the loss and damage that followed from the breach of them. In the view of the Lord Ordinary the action constituted a claim in part-implement of the obligations alleged. It gave fair notice of the claim. She could see no basis for any prejudice or disadvantage to the defender. The action served justice in the protection of rights. It was in accordance with good practice that pleadings should be made only where there was a proper evidential basis for them.
[8] The Lord Ordinary therefore excluded the averments in answer 34.1 from probation, sustained the pursuer’s fifth plea in law, repelled the defender’s fourth and fifth pleas in law and allowed a proof before answer. That is the interlocutor that is reclaimed against.
The grounds of appeal
[9] The defender’s grounds of appeal are that the Lord Ordinary erred (1) in holding that the declaratory conclusions seek “part-implement” of the contractual and delictual obligations in respect of which the pursuer now seeks payment; (2) in holding that the action gives fair notice of the claim; (3) that the action serves justice in the protection of rights and is consistent with the underlying purposes of the 1973 Act; and (4) in placing weight on the pursuer’s argument that it felt that it was unable properly to quantify its claim.
Conclusions
The approach to the interpretation of sections 6 and 9
[10] I agree with the decision of the Lord Ordinary. A “relevant claim”, so far as is material to this action, is a claim made in implement or part-implement of the obligations, contractual and delictual, on which the action is founded and is a claim made in appropriate proceedings (s 9(1)(a)).
[11] Section 4(2)(a) implies that the requirement that the proceedings should be “appropriate” refers to the forum in which the proceedings are brought rather than to the form that the proceedings take (MRS Hamilton v Baxter 1998 SLT 1076). The present proceedings are therefore appropriate.
[12] It is not disputed that if the claim can be said to have been made only when the amendment was allowed, the claim has prescribed. The short question therefore is whether the declaratory conclusions in this action constituted the making of a relevant claim.
[13] The defenders insist that the pre-1973 law is of no relevance to that question since the purpose of the 1973 Act was to put the law of prescription on a new footing. I do not agree. In my view, the 1973 Act altered the rules of prescription, for example in relation to the period of the short negative prescription and the cases to which it applied; but it did not alter the principles on which prescription is held to occur. In Central SMT Co Ltd v Lanarkshire CC (1949 SC 450) this court held that a conclusion for declarator of liability was sufficient to prevent the operation of a time bar (cf also Lancashire Textiles (Jersey) Ltd v Thomson Shepherd & Co Ltd 1985 SC 135, Lord Davidson at p 140). That view was consistent with the principle that a declarator of liability is the first stage in every petitory action, whether or not such a declarator is expressly concluded for (Union Electric Co v Holman & Co 1913 SC 954, Lord President Dunedin at pp 957-958). In my view, the 1973 Act does not abridge these principles.
[14] But even if one interprets sections 6 and 9 in isolation from any prior case law, the...
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