Peacock Group Plc V. Railston Limited
| Jurisdiction | Scotland |
| Judge | Lord Emslie |
| Neutral Citation | [2010] CSOH 173 |
| Court | Court of Session |
| Published date | 24 December 2010 |
| Year | 2010 |
| Date | 24 December 2010 |
| Docket Number | A15/09 |
| OUTER HOUSE, COURT OF SESSION [2010] CSOH 173 | |
| A15/09 | OPINION OF LORD EMSLIE in the cause PEACOCK GROUP plc Pursuers; against RAILSTON LIMITED Defenders: and WM MURCHLAND & COMPANY LIMITED Third Parties ________________ |
Pursuers: Wolffe QC, Watson, solicitor advocate; Simpson & Marwick
Defenders: Cowie; Balfour + Manson LLP
Third Parties: Haldane QC; Dundas & Wilson CS LLP
24 December 2010
Introduction
[1] The pursuers are a retailing company whose business premises in and after 2000 included a Unit in Kilmarnock. On 6 July 2001 the premises were flooded when a mains water connection failed at first floor level. According to the pursuers, that failure and the resulting loss and damage were caused by breach of contract on the part of the main contractors by whom shop-fitting works had been carried out. Convened as defenders in this action, the main contractors have tabled a claim to what they call "indemnity" from their sub-contractors under third party procedure, and it is these third parties who now take the lead in seeking dismissal of the action on various grounds.
[2] Without going into unnecessary detail, the pursuers allege that the mains installation at the locus included a connector by which respective lengths of plastic and copper pipe were joined together; that the connector embodied a metal gripper ring with teeth which, when tightened, should have engaged physically with the copper pipe; that the connector came adrift from the copper pipe because it was never properly tightened by the third parties; and that this was evident from the absence of (i) any gripper ring marks where the connector had been in contact with the copper pipe and (ii) gouge marks such as would have been caused if a properly tightened gripper ring had been pulled from the copper pipe. On these grounds the pursuers claim damages from the defenders for breach of their implied contractual obligation (through the third parties) to carry out the plumbing element of the shop-fitting works with reasonable care and skill.
[3] In reply the defenders, without admitting the sequence of failure alleged, maintain that any breach of contract on their part was brought about by the third parties' equivalent breach of the relevant sub-contract. The third parties, for their interest, do not dispute that they were under an implied obligation to carry out the plumbing works with the skill and care to be expected of contractors of ordinary competence. That said, however, they flatly deny having breached any such obligation.
[4] Against that background, it might be thought that a proof should now take place on the disputed issues as to (i) how and why the connection failed, and (ii) whether, in the circumstances, either the defenders or the third parties or both were in breach of their respective contractual obligations. There are, however, complications. First, the failure of the pipework did not occur until some eleven months after the relevant works were completed, leading the third parties to maintain that the connection could not have been defective as alleged. According to them, an inadequately tightened connection would have failed immediately, or very soon, upon normal mains water pressure being restored.
[5] Second, the present action was raised in early 2009 following the dismissal, two years earlier, of a previous case having substantially the same characteristics. Unusually, that previous case was dismissed because the actual connector and the copper piping from which it parted - physical productions, evidence of whose condition would be of crucial significance to the determination of the claim - had been borrowed out and apparently lost by the pursuers' agents in November 2003. By that stage, unfortunately, the third parties were newly convened into the process and, unlike the pursuers and defenders, had had no opportunity to have the connector and copper piping examined by any relevant expert. Somehow, the disappearance of these important items did not come to light until the latter part of 2005, and it was after that (following a preliminary proof as to the circumstances and consequences of the loss) that the action was dismissed. According to the Lord Ordinary at that time, the prejudice to the third parties was so severe and irremediable, by reason of crucial primary evidence being unavailable for expert inspection on their behalf, that the action could not fairly be allowed to proceed against them or against the defenders whose right of relief had been rendered inoperable.
[6] The pursuers acquiesced in this decision, and it was only on the chance rediscovery of the missing items in December 2008 that the prospect of raising fresh proceedings arose. The present action was signetted without delay on 15 January 2009; the third parties were again brought into the process by the defenders in February 2009; and since then the action has followed a fairly unremarkable course leading up to the present diet of debate. In the interesting discussion which has now taken place before me over two days, significant reliance has been placed on the two complicating factors to which I have referred, and certain major disputed issues have been focused for the court's determination. For convenience I propose, in the paragraphs which follow, to deal with each of these disputed issues in turn.
Relevancy and remoteness
[7] In challenging the validity of the claim which they faced, the third parties maintained (i) that no relevant breach of contract was averred against them on Record, and (ii) that the particular risk which transpired, namely an escape of mains water nearly one year after the completion of their work, was not one which they could fairly be held to have assumed at the time of contracting. By reference to a line of authorities including Koufos v C Czarnikow Limited 1969 1 AC 350, Transfield Shipping Inc v Mercator Shipping Inc 2009 1 AC 61; Donoghue v Greater Glasgow Health Board and another 2009 CSOH 115 and Upton Park Homes Limited v Macdonalds, solicitors 2009 CSOH 159, it was argued that the limits of contractual liability were much narrower than for delictual acts or omissions; that these limits depended on what the contracting parties must reasonably be held to have had in contemplation at the material time; and that mere forseeability of a given head of loss, while essential, was not a sufficient basis for liability in itself. Prima facie any unusual and potentially significant future loss would fall outwith the reasonable and proper limits of a contracting party's responsibility for breach of contract, and here it was unrealistic to suppose that the third parties could, in 2000, have undertaken an open-ended and potentially unlimited liability for any failure of the installation which might materialise months, or even years, after completion of the relevant works. As explained by Lord Hoffmann in Transfield, at para. 15, the key question was "...whether the loss for which compensation is sought is of a "kind" or "type" for which the contract-breaker ought fairly to be taken to have accepted responsibility." Lord Hope's observations at para. 32 were to a similar effect, and in addition his Lordship stressed that "...the more...
To continue reading
Request your trial
-
Michael Fox And Agnes Fox Against United Biscuits (uk) Ltd
...Tonner v Reiach & Hall 2008 SC 1; Ross v Giles Insurance Brokers Ltd (unreported), 22 July 2011; and Peacock Group plc v Railston Ltd [2010] CSOH 173. [5] In that regard, counsel accepted that the decision in each case tended to turn upon the particular facts and circumstances involved. How......
-
'Lost and found' Creates A Bad Case Of Dèjá Vu For Railston Ltd
...Group plc v Railston Ltd and WM Murchland & Company Ltd [2010] CSOH 173 Introduction In 2001, the Peacock's store in Kilmarnock flooded when a mains water connection on the first floor failed. They raised a Court of Session action alleging that the loss and damage suffered was a result ......