Linda Anne Gordon And Others Against Campbell Riddell Breeze Paterson Llp
| Jurisdiction | Scotland |
| Judge | Lady Paton,Lord Bracadale,Lord Malcolm |
| Judgment Date | 08 March 2016 |
| Neutral Citation | [2016] CSIH 16 |
| Published date | 08 March 2016 |
| Docket Number | A240/12 |
| Court | Court of Session |
| Date | 08 March 2016 |
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2016] CSIH 16
A240/12
Lady Paton
Lord Bracadale
Lord Malcolm
OPINION OF LADY PATON
in the cause
LINDA ANNE GORDON AND OTHERS
Pursuers;
against
CAMPBELL RIDDELL BREEZE PATERSON LLP
Defenders:
Act: Howie QC, Sutherland; Drummond Miller LLP
Alt: Johnston QC, McKinley; Brodies LLP
8 March 2016
[1] I agree with the opinion of Lord Malcolm, and have only a few observations to add.
[2] It might be thought that the facts in the present case could be distinguished from those in David T Morrison & Co Ltd (t/a Gael Home Interiors) v ICL Plastics Ltd 2014 SC (UKSC) 222. In Morrison, there was an explosion in a building causing widespread damage. It was instantly obvious to all that “something had gone wrong” and that loss, injury or damage had been suffered, even if it was not possible at that stage to ascertain whether or not the underlying cause was negligence. By contrast, payment in the ordinary course of business of solicitors’ fees for services rendered might not, at the time of payment of the fees, have the appearance of something having gone wrong. That may only emerge later.
[3] In this particular case however, I consider that the evidence accepted by the Lord Ordinary demonstrates that the pursuers were alerted to the fact that “something had gone wrong” by the defenders’ letter dated 10 November 2005 (referred to by the Lord Ordinary in paragraph [19] of his opinion and copied in the appendix at pages 442-444). That letter not only advised the pursuers that the tenant was refusing to quit, but also that the pursuers should obtain the services of other solicitors because of “a potential conflict of interest”. In particular, the letter advised the pursuers as follows:
“ … take immediate steps to select a firm to advise you in relation to Mr Craig [the tenant] and your concerns regarding our firm … you will obviously be seeking advice regarding the actings of our firm, and it may be necessary consequently for my firm to obtain separate advice for our own benefit in relation to those actings … [emphasis added]”.
[4] Thus the letter warned not only that there was difficulty removing the tenant, but also that there was a potential dispute concerning the services rendered by the defenders, an implication being that those services might, on one view, be considered unsatisfactory or even professionally negligent. The pursuers acted on the advice contained in the letter, certainly in one respect, for they instructed other solicitors, Messrs Anderson Strathern, who were in place by 8 December 2005 (paragraph [19] of the Lord Ordinary’s opinion). It was Messrs Anderson Strathern who submitted applications to the Land Court with a covering letter dated 9 February 2006 (paragraph [1] of the opinion).
[5] Thus in my opinion, the letter of 10 November 2005 gave the pursuers clear notice that they should (i) change their solicitors (a disruptive event); (ii) request the new solicitors’ advice not only about the tenant who refused to quit, but also about the actings of their previous solicitors – both matters which might result in litigation (the Land Court in relation to the tenant, and an action for professional negligence in relation to the agents). Changing solicitors and asking for advice about the actings of previous solicitors are troublesome and expensive procedures. Moreover, as is generally accepted, litigation is an anxious, costly, and time-consuming procedure. The outcome of any litigation can never be predicted with any certainty. A losing party may be faced with considerable costs. Even if a party is wholly successful, the judicial award of expenses is usually less that the outlays actually incurred in the litigation. I therefore consider that as soon as the pursuers received the letter of 10 November 2005, they had clear intimation that they were suffering, and would continue to suffer, loss, injury or damage.
[6] In my view therefore, following Morrison, the five year prescriptive period began to run on 10 November 2005. The present action for reparation was not raised until 17 May 2012, more than five years later. In the result, I agree with the conclusion reached by Lord Malcolm. The reclaiming motion must be refused, and the interlocutor of the Lord Ordinary dated 25 March 2015 adhered to.
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2016] CSIH 16
A240/12
Lady Paton
Lord Bracadale
Lord Malcolm
OPINION OF LORD BRACADALE
in the cause
LINDA ANNE GORDON AND OTHERS
Pursuers;
against
CAMPBELL RIDDELL BREEZE PATERSON LLP
Defenders:
Act: Howie QC, Sutherland; Drummond Miller LLP
Alt: Johnston QC, McKinley; Brodies LLP
8 March 2016
[7] I agree that this appeal should be refused. I agree with Lord Malcolm’s analysis of the case in the light of the decision of the Supreme Court in David T Morrison & Co Ltd (t/a Gael Home Interiors) v ICL Plastics Ltd 2014 SC (UKSC) 222 and have nothing to add to it. In addition, I agree with your Ladyship that the pursuers were put on notice as to loss, injury or damage on 10 November 2005.
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2016] CSIH 16
A240/12
Lady Paton
Lord Bracadale
Lord Malcolm
OPINION OF LORD MALCOLM
in the Reclaiming Motion
by
LINDA ANNE GORDON AND OTHERS
Pursuers and Reclaimers;
against
CAMPBELL RIDDELL BREEZE PATERSON LLP
Defenders and Respondents:
Act: Howie QC, Sutherland; Drummond Miller LLP
Alt: Johnston QC, McKinley; Brodies LLP
8 March 2016
[8] The pursuers own three fields in the Killearn area. In 2004 their solicitors (the defenders) advised them to end the agricultural tenancies over the fields. The defenders were instructed to serve notices to quit to take effect on 10 November 2005. However, the tenant remained in possession. In February 2006 applications were lodged with the Scottish Land Court seeking his removal. On 24 July 2008, following a hearing on evidence, the applications regarding two of the fields were refused because of defects in the notices. Almost four years later, to be precise on 17 May 2012, the present action was raised in which the pursuers seek damages from the defenders on account of their alleged breach of contract in drafting ineffective notices to quit. The defenders do not concede the merits of the case, but also plead that, in terms of section 6 of the Prescription and Limitation (Scotland) Act 1973, any obligation to pay damages to the pursuers has prescribed in that it was enforceable for more than five years before the action was raised. Particular reliance is placed on the fact that the heads of loss include legal fees paid to the defenders well before May 2007 in respect of the Land Court proceedings. After a preliminary proof on this issue the Lord Ordinary upheld the plea of prescription and absolved the defenders. The pursuers now reclaim against (appeal) that decision.
[9] In resisting the plea of prescription the pursuers rely upon the terms of section 11(3) of the 1973 Act. For the purpose of the identification of the date on which the five year prescriptive period will commence, section 11(1) provides that, subject to the remaining subsections, an obligation “to make reparation for loss, injury or damage caused by an act, neglect or default shall be regarded ... as having become enforceable on the date when the loss, injury or damage occurred.” Section 11(3) states that where on the date referred to in subsection(1) “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 substituted a reference to the date when the creditor first became, or could with reasonable diligence have become, so aware.”
The submissions of parties
[10] The pursuers submit that not all expenditure amounts to a loss, and that, prima facie, money spent upon services rendered by solicitors will not usually be regarded as “loss, injury or damage” within the meaning of the Act. Until the judgment of the Land Court the pursuers did not and could not have known that the liability in respect of legal fees amounted to “loss, injury or damage caused as aforesaid”, thus the five year period did not begin until the date of that decision, namely 24 July 2008. If this is correct the action was raised within the five year prescriptive period.
[11] Relying upon the decision of the UK Supreme Court in David T Morrison & Co Ltd (t/a Gael Home Interiors) v ICL Plastics Ltd 2014 SC (UKSC) 222, the submission for the defenders is that section 11(3) only applies in cases of latent damage, that is where the problem is not manifest and the claimants are justifiably unaware of the fact of loss, injury or damage. The prescriptive period began when the pursuers knew that they were incurring expenditure on legal fees. This remains so even if, at the time, the pursuers were unaware that (a) the notices were invalid, and (b) that but for a breach of duty the costs would not have been incurred.
The case law and the Lord Ordinary’s decision
[12] In Morrison the fact of loss was obvious – it involved damage to a building caused by an explosion at a neighbouring property. Given the devastation, the question of whether the claimants knew that damage had been sustained did not arise. It was held that the five year prescriptive period began when they knew of the impact on their property. Here the pursuers say – what if the damage is purely financial in nature, and at the time seems no more than expenditure on services bought and paid for? If it is not immediately ascertainable that the costs may have been caused by an act or omission which might amount to a legal wrong, does that mean that, in terms of section 11(3), the commencement of the prescriptive period is postponed? That is the question raised in this appeal.
[13] If the question was asked before the decision in Morrison, the answer would...
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