David T Morrison & Company Ltd (t/a Gael Home Interiors) v ICL Plastics Ltd
| Jurisdiction | Scotland |
| Judge | Lord Sumption,Lord Toulson,Lord Hodge,Lord Neuberger,Lord Reed |
| Judgment Date | 30 July 2014 |
| Neutral Citation | [2014] UKSC 48 |
| Date | 2014 |
| Docket Number | No 13 |
| Year | 2014 |
| Court | Supreme Court (Scotland) |
[2014] UKSC 48
Lord Neuberger, President
Lord Sumption
Lord Reed
Lord Toulson
Lord Hodge
Appellant
Richard Keen QC Kay Springham
(Instructed by HBM Sayers)
Respondent
Robert Howie QC Paul O'Brien
(Instructed by MacRoberts LLP)
Heard on 7 April 2014
Lord Reed (with whom Lord Neuberger and Lord Sumption agree)
On 11 May 2004 there was an explosion at ICL's factory in Glasgow. Nine people were killed and many others were injured. Extensive damage was caused to neighbouring properties, including a shop owned by Morrison. On 13 August 2009 Morrison began the present proceedings, in which it seeks damages against ICL on the basis that the damage to its shop was caused by ICL's negligence, nuisance and breach of statutory duty.
The proceedings are defended on the basis that any obligation owed by ICL to make reparation to Morrison had prescribed before the proceedings began. The relevant prescriptive period is five years, by virtue of section 6(1) of the Prescription and Limitation (Scotland) Act 1973 ("the 1973 Act"). Morrison argues however that the prescriptive period did not begin to run until long after the explosion occurred, since it was not aware, and could not with reasonable diligence have been aware, that the damage had been caused by negligence, nuisance or breach of statutory duty until a much later date. In that regard, Morrison relies upon section 11(3) of the 1973 Act.
In the courts below, the case proceeded on the footing that section 11(3) was to be interpreted as meaning that the commencement of the prescriptive period was postponed where the creditor in the obligation was not aware, and could not with reasonable diligence have been aware, (1) that loss, injury or damage had occurred, and (2) that it had been caused by the breach of a duty owed to him. That interpretation was in accordance with a number of authorities. There was no doubt that Morrison knew that damage had occurred on the date of the explosion. In order to establish that it also knew or could with reasonable diligence have known at that date, or soon after, that the explosion had been caused by a breach of duty, ICL relied on the principle expressed in the maxim res ipsa loquitur.
The rationale of that approach is not immediately obvious, since the principle res ipsa loquitur is not concerned with the establishment of knowledge on the part of a pursuer, whether actual or constructive. The principle belongs to the law of evidence, and refers to circumstances from the establishment of which an inference of negligence can be drawn, so as to shift the evidential burden of proof to a defender. It appears to have been considered relevant in the present context because of a gloss placed in some recent decisions upon the earlier interpretation of section 11(3) as postponing the commencement of the prescriptive period until the creditor is aware, actually or constructively, that the damage has been caused by the breach of a duty owed to him. In reality, a creditor often cannot be aware of that until the circumstances and their legal consequences have been established after proof. The earlier interpretation of section 11(3) has therefore been refined in some recent decisions, as I shall explain, so as to postpone the commencement of the prescriptive period until the creditor has sufficient knowledge, actually or constructively, to enable a stateable prima facie claim properly to be advanced. On that approach, the law of evidence would have a bearing on the matter.
ICL succeeded before the Lord Ordinary, Lord Woolman, on the basis that the principle res ipsa loquitur applied in the circumstances of the explosion: [2012] CSOH 44; 2012 SLT 813. Morrison succeeded before the Inner House, on the basis that it did not: [2013] CSIH 19; 2013 SC 391. ICL then appealed to this court, where it has been permitted to raise the more fundamental issue of the correct interpretation of section 11(3).
Section 6(1) of the 1973 Act provides:
"(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…"
The obligations to which section 6 applies include any obligation arising from liability to make reparation (Schedule 1, para 1(d)), subject to specified exceptions. The "appropriate date", when the five year period begins to run, is defined by section 6(3) as meaning the date when the obligation became enforceable, subject to specified exceptions, none of which is relevant to the present case.
In relation to the date when the obligation became enforceable, section 11 of the 1973 Act provides:
"(1) Subject to subsections (2) and (3) below, any obligation (whether arising from any enactment, or from any rule of law or from, or by reason of any breach of, a contract or promise) 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.
(2) Where as a result of a continuing act, neglect or default loss, injury or damage has occurred before the cessation of the act, neglect or default the loss, injury or damage shall be deemed for the purposes of subsection (1) above to have occurred on the date when the act, neglect or default ceased.
(3) In relation to a case where on the date referred to in subsection (1) above (or, as the case may be, that subsection as modified by subsection (2) 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 substituted a reference to the date when the creditor first became, or could with reasonable diligence have become, so aware."
The interpretation of section 11 has to begin with the text itself. The opening words of section 11(1) ("Subject to subsections (2) and (3) below") make it clear that that subsection sets out the general rule, which applies without modification in all circumstances other than those covered by subsections (2) and (3). The general rule applies to "any obligation … to make reparation for loss, injury or damage caused by an act, neglect or default". The general rule is that the obligation is to be regarded as having become enforceable on the date when loss, injury or damage occurred.
The phrase "act, neglect or default" has appeared in statutory provisions concerned with limitation periods since the Public Authorities Protection Act 1893. It appeared, in particular, in section 6(1)(a) of the Law Reform (Limitation of Actions) Act 1954 ("the 1954 Act"), which was the predecessor of section 17(1) of the 1973 Act. The meaning of the phrase in that context was considered by the House of Lords in Watson v Fram Reinforced Concrete Co (Scotland) Ltd 1960 SC (HL) 92. Lord Reid construed "default" as meaning "breach of duty" (p 109). Lord Keith of Avonholm was of the opinion that the phrase did not refer to a historical event, as the Inner House had considered in that case, but referred to negligence or a failure of duty (p 111). Lord Denning, echoing the Book of Common Prayer, stated at p 115:
"The words 'act, neglect or default' are perhaps a little tautologous: for 'act' in legal terminology often includes an omission as well as an act of commission: and 'default' certainly includes 'neglect'. But tautologous as they may be, the words are apt to cover all breaches of legal duty, no matter whether it be by leaving undone those things which we ought to have done, or by doing those things which we ought not to have done."
Given that the phrase had been authoritatively determined to have that meaning in legislation which was repealed and replaced by the 1973 Act, Parliament can be presumed to have intended it to bear the same meaning in section 11(1). So understood, section 11(1) establishes a general rule that an obligation to make reparation is to be regarded for the purposes of prescription as having become enforceable on the date when loss, injury or damage has occurred (traditionally denoted by the Latin term damnum) which has been caused by an act, neglect or default ( injuria): in other words, when the relevant right of action arises. This was explained by Lord Keith of Kinkel in Dunlop v McGowans 1980 SC (HL) 73, 81:
"The language of section 11(1) affords no warrant for splitting up … the loss, injury or damage caused by an act, neglect or default. An obligation to make reparation for such loss, injury and damage is a single and indivisible obligation, and one action only may be prosecuted for enforcing it. The right to raise such an action accrues when injuria concurs with damnum. Some interval of time may elapse between the two, and it appears to me that section 11(1) does no more than to recognise this possibility and make it clear that in such circumstances time is to run from the date when damnum results, not from the earlier date of injuria. The words 'loss, injury and damage' in the last line of the subsection refer back to the same words in the earlier part and indicate nothing more than the subject-matter of the single and indivisible obligation to make reparation."
Section 11(2) then sets out a special rule which...
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