Johnson And Smart (projects) Limited V. Angus Sinclair And Others
| Jurisdiction | Scotland |
| Judge | Lord Malcolm |
| Neutral Citation | [2011] CSOH 166 |
| Court | Court of Session |
| Published date | 13 October 2011 |
| Year | 2011 |
| Date | 13 October 2011 |
| Docket Number | CA61/11 |
| OUTER HOUSE, COURT OF SESSION [2011] CSOH NUMBER 166 | |
| CA61/11 | OPINION OF LORD MALCOLM in the cause JOHNSON & SMART (PROJECTS) LTD Pursuers; against ANGUS SINCLAIR Defender: ________________ |
Pursuers: Lindsay, Q.C.; Semple Fraser LLP
Defender: Logan, Advocate; Balfour + Manson LLP
13 October 2011
[1] In this action the pursuers sue for payment in respect of services and goods provided to the defender in respect of his purchase, refurbishment and modification of two fishing vessels. A verbal contract was entered into in January 2005. The pursuers had provided similar services to the defender over the previous fifteen years. It is averred that all invoices were rendered on a continuing account basis. In 2006 the defender requested the pursuers to submit final accounts. This was done on 9 February in respect of services, and on 22 February, both of 2006, regarding goods. The present action was not served upon the defender until early March 2011. The defender pleads that any obligation upon him to make payment in respect of the invoices has been extinguished by the operation of prescription, all under reference to section 6 and schedule 2(1) of the Prescription and Limitation (Scotland) Act 1973 (as amended).
[2] The pursuers' pleadings in response are not particularly specific, but Mr Lindsay, Q.C. explained that the pursuers offer to prove that, as a result of a course of dealing over many years, it was a term of the parties' agreement that (a) the defender would receive invoices in respect of services provided and goods delivered; and (b) that in respect of services invoices there would be a 30 day period of grace thereafter (10 days in respect of goods invoices) when no interest would be charged and no court proceedings for enforcement would be raised against the defender. The submission was that this postponement of the enforceability of the sums sought in the invoices delayed the start of the five year negative prescriptive period, thus the present action was commenced before, albeit only very shortly before its expiry. If this submission is wrong, then the claim has prescribed. Both counsel agreed that, for present purposes, I require to assume that the pursuers' averments are true, and assess the submission by reference to the terms of section 6 and schedule 2(1) of the Act.
[3] Schedule 2(1) applies to any obligation to pay money in respect of goods supplied on sale or services rendered in a series of transactions between the same parties (whether under a single contract or under several contracts) and charged on a continuing account. The schedule provides that the "appropriate date" for the commencement of the prescriptive period under section 6 of the Act is the date on which payment for the goods last supplied, or, as the case may be, the services last rendered, "became due". The short submission for the pursuers was that, standing the parties' agreement as outlined above, the start of the prescriptive period had been delayed until the expiry of the periods of grace, which in turn depended upon the dates of the invoices. The concept of a debt becoming "due" was equiparated with enforceability by way of court proceedings. For the defender Mr Logan submitted that any such agreement did not have that effect. Payment was due, at latest, from the date of the invoices. It followed that the claim had prescribed before the action began. Both counsel made reference to the decision in McNicoll v Walter Davidson & Sons Ltd 2000 SLT (Sh.Ct.) 16, and indicated that their researches had not uncovered any other case directly in point. In the event I have gained little assistance from McNicoll, which was decided on the basis that the pursuer had not averred any agreement relevant to the issue.
[4] The purpose of schedule 2(1) is to delay the start of the prescriptive period until the end of a running account. However it is well established that, notwithstanding the terms of section 13 of the Act, parties can agree a condition precedent which postpones the existence of an obligation to pay until a date which is later than would otherwise apply. Reference can be made to Royal Bank of Scotland v Brown 1982 SC 89 (Second Division) and McPhail v...
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