Morrison Sports Ltd v Scottish Power UK Plc
| Jurisdiction | Scotland |
| Judge | LORD RODGER |
| Judgment Date | 28 July 2010 |
| Neutral Citation | [2010] UKSC 37 |
| Date | 2010 |
| Docket Number | No 1 |
| Year | 2010 |
| Court | Supreme Court (Scotland) |
and others
[2010] UKSC 37
Lord Rodger
Lord Walker
Lady Hale
Lord Collins
Lord Clarke
Appellant
Richard Keen QC
Jonathan Barne
(Instructed by Shepherd and Wedderburn LLP)
Respondent
R Gilmour Ivey QC
Philip M Stuart
(Instructed by Andersons Solicitors LLP)
LORD RODGER (delivering the judgment of the court)
In March 1998 Mr Brian Pitchers owned two buildings, at 23 and 25 Moss Street, Paisley. The tenants of the ground floor shop at number 23 were Morrison Sports Ltd ("Morrison Sports"). On 6 March 1998 the building at number 23 was destroyed by fire. The neighbouring building at number 25 was also damaged and had to be demolished. This left the gable wall between numbers 25 and 27 exposed. As a result, the owners of flats at 27 Moss Street had to carry out weatherproofing work to the gable wall.
Investigations identified the seat of the fire as an electricity meter cupboard in number 23. Mr Pitchers, Morrison Sports Ltd and the flat owners at 27 Moss Street ("the pursuers") raised three separate actions for damages against Scottish Power UK plc ("Scottish Power") in Glasgow Sheriff Court. The actions were remitted to the Court of Session.
All three actions are framed in the same way. The pursuers aver that, in order to improve the fit between the prongs and the fuse-holder, a metal shim had been wrapped around the end of the prongs of the cut-out fuse before it was inserted into the fuse-holder in the ground floor premises at number 23. The pursuers further aver that the presence of the shim caused heating and that this led to arcing which in turn caused the fire. The pursuers allege that the shim was fitted by employees of Scottish Power. Scottish Power largely admit the pursuers' averments as to the cause of the fire, but deny that the shim was fitted by their employees. They believe and aver, rather, that the cut-out fuse had been tampered with by someone acting on behalf of Morrison Sports.
On the basis of their factual averments the pursuers seek to hold Scottish Power liable on two bases. First, they allege that Scottish Power are vicariously liable for the negligence of their employees in fitting the shim. Secondly, and separately, in article 6 of condescendence they aver that the fire was caused by Scottish Power's breach of their statutory duty under regulations 17, 24 and 25 of the Electricity Supply Regulations 1988 (SI 1988 no 1057) ("the 1988 Regulations"). The defenders deny the averments of fault and aver that the fire was caused by the sole fault of Morrison Sports.
Scottish Power accept that a proof before answer must be allowed in respect of the pursuers' common law case of negligence. But they plead that the pursuers' averments in article 6 of condescendence, relating to the alleged breach of statutory duty, are irrelevant and should not be admitted to probation. In short, Scottish Power submit that a breach of the relevant provisions of the 1988 Regulations does not give rise to any liability in damages to those who may suffer loss as a result of the breach. The Lord Ordinary (Lord Wheatley) rejected Scottish Power's argument and allowed a proof before answer on the whole case: 2007 CSOH 131; 2007 SLT 1103. Scottish Power reclaimed, but, varying the Lord Ordinary's interlocutor, an Extra Division (Lady Paton, Lady Dorrian and Lord McEwan) repelled Scottish Power's plea to the relevancy insofar as it extends to the pursuers' averments in article 6 of condescendence: 2009 CSIH 92; 2010 SLT 243. In effect, therefore, they allowed a proof of those averments. Before this Court the Dean of Faculty explained that, in pronouncing this particular interlocutor, the Extra Division proceeded on the basis of a concession that, if they rejected Scottish Power's argument that a breach of the regulations did not give rise to civil liability, the averments in article 6 should be treated as being otherwise relevant.
The 1988 Regulations were made by the Secretary of State by virtue of his powers under section 16 of the Energy Act 1983 ("the 1983 Act"). So far as relevant, section 16 provided:
"The Secretary of State may make such regulations as he thinks fit for the purpose of -
(a) securing that supplies of electricity by Electricity Boards or other persons are regular and efficient; and
(b) eliminating or reducing the risk of personal injury, or damage to property or interference with its use, arising from the supply of electricity by an Electricity Board or any other person, from the use of electricity so supplied or from the installation, maintenance or use of any electrical plant.
…
(3) Regulations under this section may provide that any person who contravenes any specified provision of the regulations, or any person who does so in specified circumstances, shall be guilty of an offence under this section.
(4) A person guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale."
In 1988 section 16 was the latest embodiment of a power to make regulations, for securing the supply of electricity and for preserving the safety of life and property, which has existed in different incarnations since the earliest days of the public supply of electricity in this country. See, for instance, section 6 of the Electric Lighting Act 1882 and section 60(1) of the Electricity Act 1947.
Part I of the 1983 Act, including section 16, was repealed by the Electricity Act 1989 ("the 1989 Act"), but the power to make regulations was maintained in section 29 of the new Act which, so far as relevant, provides:
"(1) The Secretary of State may make such regulations as he thinks fit for the purpose of -
(a) securing that supplies of electricity are regular and efficient;
(b) protecting the public from dangers arising from the generation, transmission, distribution or supply of electricity, from the use of electricity interconnectors, from the use of electricity supplied or from the installation, maintenance or use of any electric line or electrical plant; and
(c) without prejudice to the generality of paragraph (b) above, eliminating or reducing the risks of personal injury, or damage to property or interference with its use, arising as mentioned in that paragraph.
(2) Without prejudice to the generality of subsection (1) above, regulations under this section may—
…
(e) make provision requiring compliance with notices given by the Secretary of State specifying action to be taken in relation to any electric line or electrical plant, or any electrical appliance under the control of a consumer, for the purpose of—
(i) preventing or ending a breach of regulations under this section; or
(ii) eliminating or reducing a risk of personal injury or damage to property or interference with its use….
(3) Regulations under this section may provide that any person -
(a) who contravenes any specified provisions of the regulation; or
(b) who does so in specified circumstances,
shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale; but nothing in the subsection shall affect any liability of any such person to pay compensation in respect of any damage or injury which may have been caused by the contravention."
In the Court of Session Scottish Power argued that, even though the 1983 Act had been repealed by the 1989 Act, the court should proceed on the basis that the 1988 Regulations still have effect on the basis that they were made under the 1983 Act. Under reference to para 3(a) of Schedule 17 to the Electricity Act 1989 ("the 1989 Act"), however, the Extra Division rejected that argument and held that the 1988 Regulations have effect as if they were made under section 29 of the 1989 Act. Scottish Power now accept this and so there is no need to examine that particular argument: the 1988 Regulations are to be treated as having effect as if they had been made under section 29(1) of the 1989 Act.
The difference between section 16 of the 1983 Act and section 29 of the 1989 Act – and, hence, the point of the dispute in the Court of Session – lies in the concluding words of section 29(3). While both section 16(3) and (4) of the 1983 Act and section 29(3) of the 1989 Act envisage that regulations may provide for a person who contravenes the regulations, or who does so in specified circumstances, being guilty of a criminal offence and liable to a fine not exceeding level 5 on the standard scale, section 29(3) goes on to provide that nothing in subsection (3) "shall affect any liability of any such person to pay compensation in respect of any damage or injury which may have been caused by the contravention."
Regulation 39 of the 1988 Regulations does indeed provide that any supplier who fails to comply with any provision of the Regulations shall be guilty of an offence under section 16 of the 1983 Act, now section 29(3) of the 1989 Act. It follows that, if, as the pursuers aver, Scottish Power failed to comply with regulations 17, 24 and 25 of the 1988 Regulations, they would be liable to a fine under section 29(3).
In these circumstances the Extra Division attributed critical importance, for present purposes, to the concluding words of section 29(3). They noted that section 27(5) of the 1989 Act provides for a licence holder to be liable in damages to those suffering loss as a result of a breach of a final or provisional order; similarly, section 39 provides for a public electricity supplier to make compensation to any person affected by a failure to meet a prescribed standard of performance. The Extra Division then said, 2010 SLT 243, 252, paras 43-46:
"This is not therefore a regulatory scheme conferring no private rights of action for damages. On the contrary, it is a regulatory...
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