N.v DEVOS GEBROEDER v SUNDERLAND SPORTSWEAR Ltd
| Jurisdiction | Scotland |
| Judgment Date | 09 March 1990 |
| Docket Number | No. 30. |
| Date | 09 March 1990 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION.
Lord Allanbridge.
PrescriptionNegative prescriptionCommencement date of prescriptive periodAction for recompenseWhether obligation enforceable only after claim under contract judicially rejectedPrescription and Limitation (Scotland) Act 1973 (cap. 52), sec. 6 (3).1
PrescriptionNegative prescriptionInterruption of prescriptive periodAmendment to introduce case of recompense into action based upon contractWhether original claim for payment under that contract sufficient to interrupt prescriptive periodWhether a relevant claim to action based upon recompensePrescription and Limitation (Scotland) Act 1973 (cap. 52), sec. 6 (1),2 Sched. 1, para. 1.3
Statutes and ordersStatutory interpretationPrescriptionNegative prescriptionDate when the obligation became enforceablePrescription and Limitation (Scotland) Act 1973 (cap. 52), sec. 6 (3).1
Fabric manufacturers supplied the defenders, whose business was that of manufacturers of golf rainwear, with knitted, nylon-based cloth with a
polyurethane coating. The cloth was manufactured by the defenders into golfing jackets and trousers, which they sold to customers. In 1981 the defenders began to receive complaints from their customers that the polyurethane coating on their garments had broken down. Some of the cloth proved to be usable and was made up and sold by the defenders prior to 1st December 1982. The defenders refused to pay on two bills of exchange which they had issued in part-payment for the goods supplied and, in March 1983, the fabric manufacturers raised an action in the Court of Session in which they sought payment of the price due under the contract for the goods supplied. In March 1986, after proof, the Lord Ordinary (Jauncey) found that the pursuers had been in material breach of contract and accordingly were not entitled to payment from the defenders of the price for the cloth. The pursuers reclaimed and a minute of amendment was allowed to be received in December 1987. The closed record was opened up and amended in February 1988, the effect of the amendment being to introduce a case based upon recompense. The case based on recompense was thereafter remitted to the Lord Ordinary. After a procedure roll hearing, the Lord Ordinary (Allanbridge) found that the claim for recompense had prescribed and refused decree for recompense. The pursuers thereafter reclaimed, contending: (a) that their claim for recompense had not been capable of being enforced until their claim under the contract had been determined judicially, so that time did not begin to run against the pursuers until the Lord Ordinary pronounced his interlocutor in March 1986; and (b) that, if the obligation to make recompense arose at some earlier date, a relevant claim in relation to it had been made when the action was raised seeking payment of the goods suppliedHeld (aff. judgment of Lord Allanbridge), (1) that the obligation to make recompense first became enforceable when the defenders first became lucrati by making up and selling the goods supplied by the pursuers on or before 1st December 1982; (2) that the effect of Lord Jauncey's decision was that the pursuers were deprived of their right to claim payment of the price from the moment they were in material breach of contract so that the only remedy available to them, having in material breach of contract delivered defective goods to the defenders, was a possible claim quantum lucratus to the extent to which the defenders had been enriched, it being the pursuers material breach of contract, not Lord Jauncey's opinion to that effect, which deprived them of the right to sue for the price; (3) (Lord Coulsfield dissenting) that an obligation to pay the price due under a contract and an obligation to make recompense, being based upon different principles of law, no relevant claim for the action based on recompense had been made in terms of sec. 6 (1) and 9 (1) of the Prescription and Limitation (Scotland) Act 1973; and reclaiming motion refused.
Per Lord Coulsfield (dissenting), that, although it was unquestionable that a claim founded upon the equitable rule of recompense and one founded upon the terms of the original contract are different legal grounds of claim, or that the value of the claim for recompense was different from that of the claim for the contract price, nevertheless, in the circumstances of the case, the proper view was that the pursuers' claim in the action as originally raised was a claim for what was due to them out of the transaction by which the supplied goods which the defenders used and the fact that the pursuers' claim was originally based upon the terms of the contract should not require that claim to be read so narrowly as to exclude another legal ground derived from exactly those facts and circumstances which have all along formed the subjectmatter of the action.
Per the Lord President (Hope) (doubting the Lord Ordinary (Allanbridge)): "The Lord Ordinary said that the obligation to make payment under a contractual claim and the obligation to make recompense are two quite separate and distinct claims. I would prefer to say that they are two quite separate and distinct obligations, but I agree with him that the original claim which was so clearly one for payment of the price due under the contract cannot save the claim for recompense from the operation of the prescription."
N.V. Devos Gebroeder, a Belgian company, raised an action for payment for cloth supplied against Sunderland Sportswear Ltd. in the Court of Session. The payment sought was evidenced by two bills of exchange and was in respect of the third of three batches of cloth supplied. The defenders denied liability, claiming that the pursuers were in material breach of contract and lodged a counterclaim for damages in respect of breach of contract in relation to all three batches of cloth supplied.
After proof before the Lord Ordinary (Jauncey), on 26th March 1986, his Lordship sustained the defenders' plea that they were not bound to make payment to the pursuers, repelled the pursuers' plea that they were not bound to make reparation to the defenders' for breach of contract, and allowed a proof of damages in the counterclaim. [See:N. V. Devos Gebroeder v. Sunderland Sportswear Ltd.UNK1987 S.L.T. 331.]
The pursuers reclaimed to the Inner House where they were allowed to amend the pleadings so as to add a claim for recompense. The reclaiming motion was then refused in relation to the claim under the contract and allowed in relation to the claim for recompense. The action was thereafter remitted to the Outer House and came before the Lord Ordinary (Allanbridge) on procedure roll on 20th December 1988 on the defenders' preliminary plea that the claim for recompense had prescribed. Eo die his Lordship made avizandum.
At advising, on 9th March 1990;
LORD PRESIDENT (Hope).The pursuers are a company incorporated in Belgium which manufactures fabrics including cloth coated with polyurethane. Between 1980 and 1982 they supplied substantial quantities of coated cloth to the defenders, who carry on business in Glasgow as manufacturers of golf rainwear. The defenders used the cloth for the manufacture of golf jackets and trousers, which they then sold to customers. In 1981 they began to receive complaints from their customers that the polyurethane coating on their garments had broken down. They continued to take delivery of the cloth from the pursuers, but further complaints of cracking in the polyurethane coating were received. In August or September 1982 they ceased to take further supplies of cloth from the pursuers and they also refused to pay on two bills of exchange which they had issued in part payment for the goods. In March 1983 the pursuers raised the present action, in which at that stage they sought payment of the price due under the contract for the goods supplied. The defenders denied liability to pay the price, claiming that the pursuers were in material breach of contract, and they lodged a counterclaim for damages in respect of loss and damage which they claimed to have sustained as a result of the breach. In January 1986 a motion was granted of consent to separate proof of the merits from proof on quantum of damages, and the case then proceeded to a proof before answer before Lord Jauncey. On 26th March 1986 he held that the pursuers were in material breach of contract and that they were not entitled to payment from the defenders of the price for the cloth. He allowed a proof before answer on the counterclaim: see N. V. Devos Gebroeder v. Sunderland SportswearUNK 1987 S.L.T. 331.
A reclaiming motion was enrolled against Lord Jauncey's interlocutor of 26th March 1986. The cause was appointed to the summar roll for hearing and then sisted for a time for negotiations which were unsuccessful. On 23rd December 1987 the court allowed a minute of amendment to be received and answered and on 26th February 1988 the closed record was opened up and amended in terms of the minute of amendment and answers as adjusted. The effect of this amendment was to introduce into the action for the first time a claim by the pursuers for recompense to the extent to which the defenders had been lucrati by the supply of the material, to which the defenders' reply was that any such claim against them had prescribed. On the same date the motion for review of the Lord Ordinary's interlocutor was refused insofar as it related to the unamended record but allowed in so far as it related to the record as amended, and the cause was remitted to the Lord Ordinary. On 7th October 1988 the allowance of proof was withdrawn by the Lord Ordinary and the cause was appointed to the procedure roll. Lord Allanbridge then heard a debate on the procedure roll, following which on 18th January 1989 he held that the pursuers' claim for recompense had prescribed on or before 1st December 1987, with the result that...
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