Karl Construction Ltd v Palisade Properties Plc

JurisdictionScotland
Judgment Date14 January 2002
Docket NumberNo 26
Date14 January 2002
CourtCourt of Session (Outer House)

OUTER HOUSE

Lord Drummond Young

No 26
KARL CONSTRUCTION LTD
and
PALISADE PROPERTIES PLC

Diligence—Inhibition on dependence—Recall of inhibition—Whether colourable case where pursuer undisclosed principal of party to building contract—Whether contingent claim only prior to certification under building contract—Whether automatic grant of inhibition on warrant following signeting of summons contrary to Art 1 of the First Protocol to the European Convention on Human Rights1

A company raised an action for payment in respect of building works said to have been carried out but which had not yet been certified. A claim for damages for breach of contract was also advanced in the alternative. The summons contained the usual warrant for inhibition and arrestment on the dependence, and the pursuers inhibited the defenders, who thereafter moved for recall of the inhibition.

The defenders argued that the inhibition should be recalled for three reasons. First, the pursuers had no title to sue in terms of the contract between the parties and therefore no colourable case. The contract had been concluded between the defenders and a third party, who had been acting as an undisclosed principal, namely, the pursuers. It was a contract which was personal and could neither be performed vicariously nor enforced by an undisclosed principal. Secondly, the pursuers' claim was essentially contingent and therefore diligence on the dependence was incompetent unless special circumstances were averred. There were no such averments. Thirdly, the automatic grant of inhibition failing a justification advanced constituted an infringement of the defenders' rights under art 1 of the First Protocol of the European Convention on Human Rights.

The pursuers argued first, that the nature of the contract as a personal one was unclear, and therefore a preliminary proof on the matter to determine the pursuers' right to enforce the contract was required. Secondly, even where sums had not been certified as due under the contract, a right of action existed in respect of those sums. The damages claim was an ordinary claim and not contingent. Thirdly, that the present common law rules applying to inhibition on the dependence struck a fair balance between the pursuers' interest in having assets available to satisfy a decree and the defenders' right to use their property.

Held (1) that although the contract in question was personal to the parties involved, it was not clear that it was of a...

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26 cases
  • Barrie Tonner And Another V. Reiach And Hall
    • United Kingdom
    • Court of Session
    • 12 Junio 2007
    ...The Court therefore had a duty to wake up sleeping dogs. Reference was made to Karl Construction Ltd. v Palisade Properties Plc 2002 SC 270, Lord Drummond Young at paragraphs 75 and 76. In this case there were two aspects to a possible breach of Article 6(1) of the Convention. The first was......
  • Pet Shabana Yasmin Soofi Or Murtaza (fe) For Suspension Ad Interim
    • United Kingdom
    • Court of Session
    • 22 Diciembre 2011
    ...hurdle and it is not sufficient for the Petitioner to present a "colourable" case [cf. Karl Construction Ltd v Palisade Properties plc [2002] SC 270; Gillespie v Toondale Ltd 2006 SC 304; Cowan v The Royal Bank Of Scotland Plc [2011] CSOH 85 (17 May 2011)]. [25] The substance of what the le......
  • Anwar v The Advocate General (representing the Secretary of State for Business Energy and Industrial Strategy)
    • United Kingdom
    • Supreme Court (Scotland)
    • 13 Octubre 2021
    ...No 1 (“A1P1”) of the European Convention for the Protection of Human Rights and Fundamental Freedoms (“ECHR”). In Karl Construction Ltd v Palisade Properties plc 2002 SC 270, a defender in a building contract claim applied successfully for recall of an inhibition on the dependence on the g......
  • Fourie v Le Roux and Others
    • United Kingdom
    • House of Lords
    • 24 Enero 2007
    ...is not to be held to be incompatible with article 1 of the First Protocol to the European Convention on Human Rights: Karl Construction Ltd v Palisade Properties plc 2002 SC 270; Advocate General for Scotland v Taylor 2003 SLT 7 Those cases were concerned primarily with issues of Scots pro......
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