Scottish Court of Session Decisions

In April 1991 officers of Lothian and Borders Police were carrying out enquiries in respect of certain scaffolding which they suspected was stolen property. In the course of those enquiries they obtained access to premises at North Berwick where a quantity of scaffolding was found. The Inspector in charge authorised the removal of the scaffolding from those premises.

At that time a David Thomson carried on a haulage business from a yard at East Calder. The pursuer, who brings this action in his own name and on a contention that he is the assignee of David Thomson in respect of the claim made herein, avers that on or about 13 April 1991 a contract was entered into between Thomson on the one hand and officers of the Lothian and Borders Police on the other under which the scaffolding would be transported by Thomson from North Berwick to his yard at East Calder and be stored there. He avers that various lorry loads of scaffolding were, in furtherance of that contract, transported to the yard at East Calder on that and on the following day. He further avers that on succeeding days further quantities of scaffolding were, on the instructions of police officers, transferred by other hauliers from North Berwick to Thomson's yard. All those loads, it is averred, were, in furtherance of Thomson's arrangements with the police, accepted by him to be stored at his yard. During those operations, the pursuer avers, Thomson was assured by a police officer that he would be paid for the storage of that material, although no particular rate was then discussed.

That scaffolding has remained at the yard since that time - that is, for a period now well in excess of seven years. Certain criminal proceedings were instituted by the Procurator Fiscal at Haddington against an individual in connection with that scaffolding. Subsequently an action of multiplepoinding was also commenced by the Procurator Fiscal. Notwithstanding those proceedings the scaffolding remains undisposed of at Thomson's yard.

The claims made in this action are for storage charges for that material (1) from 13 April 1991 to 31 March 1998 (shortly before the commencement of the action) and (2) from the latter date on a continuing basis until payment. The amounts claimed are at the rate of 10 pence per square foot per week, averred to be a reasonable charge for the storage in question.

The defender denies any liability to make payment to Thomson or to any assignee of him for such storage. There is a factual dispute about the arrangements under which the scaffolding came to be stored at Thomson's yard. The defender has also convened the Procurator Fiscal as a third party to the action but the latter took no part in the debate with which this Opinion is concerned.

The debate was directed to two principal issues. The first was focused by the defender's first plea-in-law - "No title to sue". The second was concerned with a contention by the defender that any obligation to make payment of storage charges in respect of the period from 13 April 1991 to 15 May 1993 (the date falling five years prior to the commencement of the action) has been extinguished by prescription.

The first principal issue arises in the following way. When the summons was served it contained an averment that Thomson "by letter of 3 April 1998 which is produced in process assigned his right of action against the defender to [the pursuer]". That letter was listed in the schedule appended to the summons and was lodged with the summons at calling. It is on business stationery bearing to be of David Thomson carrying on business as a general and specialised haulage contractor, is addressed to the pursuer and reads:-

The defences as lodged did not contain any challenge to the pursuer's title to sue. However, in the course of adjustment the defender's now first plea-in-law was added; at a continued preliminary hearing held on 31 July 1998 counsel for the defender stated that it was intended to challenge the effectiveness of the letter of 3 April 1998 to confer on the pursuer a title to sue, it being the defender's contention that that letter did not bear to carry any underlying debt or debts. Thereafter on 27 August 1998 the pursuer lodged a further letter on the same style of stationery and again bearing to be addressed by Thomson to the pursuer. It bears the date 23 February 1998. It is in the following terms:-

Mr Stuart for the defender submitted that the letter of 3 April 1998 founded on in the summons as served was ineffective to assign or transfer to the pursuer the debt allegedly due by the defender. While no words of style were required for an assignation, it was necessary, in the case of a debt, that there be an irrevocable order authorising one person to pay and another to receive the debt; the document must show a present intention to transfer and such acts must be authorised as will make the assignee's right effectual (Gloag & Irvine - Rights in Security p. 471). Reference was made to International Fibre Syndicate Ltd v Dawson (1901) 3 F.(H.L.) 32. It was vital that the document relied on should inform the debtor of the extent of the right transferred (Gallemos Ltd v Barratt Falkirk Ltd 1989 S.C. 239, especially per Lord Dunpark at p. 242 and per Lord Clyde at pp. 250-1). That had been achieved in Slattadale Ltd v Tilbury Homes (Scotland) Ltd 1997 S.L.T. 153 where what had been assigned was the right and title of the assignor in a particular depending action; moreover, in that case, the original contract having been repudiated, there was no underlying right to assign, only the right embodied in the depending action. The letter of 3 April did not satisfy what was required for a valid assignation in the circumstances. All it bore to do was to transfer a right of action; that was merely an ancillary right which did not include any underlying debt. Nor was any debt to which the ancillary right might relate specified in that letter. It would be impossible for the defender, as alleged debtor, to know from the terms of that letter the extent of his obligation to the assignee. Accordingly, that letter did not confer any valid title on the pursuer to bring the present action. The letter of 23 February had not been referred to in the summons as served nor had it been produced when the summons was lodged. It had been introduced by amendment in August 1998. Notwithstanding that it bore to be dated prior to the raising of the action, it could not, having been first produced and founded on in August, confer a valid title to pursue this action. Intimation to the debtor was necessary to complete an assignee's title (Gloag & Irvine - Rights in Security pp. 476-8; Gallemos Ltd v Barratt Falkirk Ltd). Intimation might be made by execution of a summons against the debtor in which the assignation was founded on (Gloag & Irvine - op. cit. at p. 484). The letter of 23 February had not been referred to or founded on in the summons as executed; there was not even a suggestion that the pursuer was aware of it at that time. The pursuer's lack of title when the action was raised could not be cured by the subsequent production of and reliance on another writ. Reference was made to Bentley v Macfarlane 1964 S.C. 76. Slattadale Ltd v Tilbury Homes (Scotland) Ltd was distinguishable on this aspect. In that case there was a pre-existing action which had been raised by a person with a proper title to do so; there had, at the time Slattadale had been sisted, been a defect (cured by subsequent assignation), not an absence of title. Here there had been no pre-existing action and no intimated title at the time the present action was raised. The action should be dismissed.

The pursuer, who appeared in person, submitted that the letter of 3 April satisfied the requirements laid down in Gloag & Irvine - op. cit. for a valid and effectual assignation. As had been held in Slattadale Ltd v Tilbury Homes (Scotland) Ltd a document of this kind amounted to a great deal more than a mere mandate to pursue the action (per Lord Coulsfield at p. 156). It did carry the underlying debt. It was sufficiently specific in its terms. It had also been accompanied at lodgement by an invoice which identified the rate and the period of the charge, referred to the criminal proceedings to which it related and bore to have been issued from the premises where the scaffolding had been stored. There could be no doubt in the mind of the defender as to the nature and extent of the obligation with which the assignation was concerned. In any event, the pursuer had as at the time of raising the action a good title to sue. The letter of 23 February (which had been communicated to the pursuer immediately following the date which it bore) and the letter of 3 April (which had been likewise communicated) should be read together, the latter clarifying that the right earlier transferred included the right to bring an action in respect of the debt. Bentley v Macfarlane, where the pursuer had had no title at all when the action was raised, was clearly distinguishable. The position of the present pursuer was stronger than that of unconfirmed executors, whose title had been recognised as sufficient to bring proceedings. The present case was on all fours with Slattadale Ltd v Tilbury Homes (Scotland) Ltd.

In my view the defender's plea of no title to sue cannot be sustained at this stage. The pursuer maintains that the letters of 23 February and 3 April 1998 were communicated to him immediately following the dates which they respectively bear. Mr Stuart did not dispute that the letter of 23 February was, in a question between the assignor and the assignee, sufficient in its terms to carry the debt sued for in the present action. Accordingly, on the above hypothesis, as at or about 23 February 1998 the pursuer was, to adopt the words of Lord Coulsfield in Slattadale Ltd v Tilbury Homes (Scotland) Ltd at p. 156I, "entitled to the benefit of the claim" against the defender. That entitlement existed as at the date the action was raised and subsists. It has been founded on in this action since August 1998 when judicial intimation was given of it. This is not a case, such as Bentley v Macfarlane, where the pursuer has, as at the date of raising of the action, no right, title or interest in respect of a claim; it is rather that his title was not (subject to the effect of the intimation of the letter of 3 April) completed by intimation to the defender until some months after the raising of the action. Although one would ordinarily expect the relative assignation to be founded on in the summons as served (Gloag & Irvine - op. cit. p. 484), no authority was cited to me to the effect that failure to do so was fatal to the competency of the action. In principle, it is difficult to see why founding on it pendente processu (or in any event prior to completion of the pleadings) should not suffice, provided always that the assignation has been granted prior to the action being raised. Moreover, in the present case the assignation relied on at the outset of the action was of a right of the same creditor to sue the same debtor in respect of the same general subject matter as had been dealt with by the prior assignation of the debt. The letter of 3 April served only (and, in my view, unnecessarily) to corroborate the transfer of a right which had impliedly, if not expressly, been transferred by the prior assignation (Watt v Scottish North Eastern Railway Co (1866) 4 Macph. 318, per Lord President McNeill at p. 321). In these circumstances it cannot be said either that the present pursuer had on raising the action no right, title or interest to the debt claimed nor that the intimation of assignation which he gave at that time was of a wholly different right than that subsequently founded on. In these circumstances the pursuer's averments are not, in my view, irrelevant to instruct a valid title to sue.

In these circumstances it is unnecessary to decide whether the letter of 3 April was in nature and content sufficient, on intimation to the defender, itself to confer a completed right, title and interest to pursue the present action. I am inclined to think that, standing alone, it was not. It bears to transfer only "my right of action". It makes no reference to any underlying substantive right. While there are some similarities with Slattadale Ltd v Tilbury Homes (Scotland) Ltd, the assignation in that case was of Cityploy's "whole right, title and interest in [an identified and subsisting action]". Lord Coulsfield found it "not at all difficult to conclude that the intention of that document was to convey the rights which Cityploy were seeking to enforce in the action". Those rights would include the substantive right (to damages for breach of contract) which Cityploy had enjoyed. In the context of the dependence of an action in which such a substantive right was being pursued, it is easier to construe the assignation granted as one carrying the underlying substantive right. As I understand the view expressed by Lord Coulsfield in that action, a title to sue in the assignee's name would be validly conferred only if the effect of the assignation was to confer on him that substantive right. In the present case only the ancillary right ("my right of action") bears to have been assigned by the letter of 3 April. That, standing alone, is consistent with the grant only of a mandate to pursue an action, a grant which would not confer title to bring an action, at least in the present form.

I would not have been disposed to hold, at least at this stage, that the assignation of 3 April was insufficient for want of adequate definition of the subject matter. The degree of definition required will depend on the particular circumstances, the requirement being that the particular debtor should be able to know what is the obligation or the extent of the obligation which he is now to hold to the account of the assignee. It is not possible at this stage to determine whether, in respect of the dealings between Thomson and the defender, there is any material uncertainty as to the relevant obligation.

The second principal issue concerns prescription. The defender avers:-

The defender has an appropriate plea directed to that contention.

In response the pursuer avers:-

The pursuer also relies in his pleadings on the raising and service of the action of multiplepoinding as interrupting the running of any period of prescription; but at the debate the pursuer departed from that contention.

The defender denies on averment that there was a series of transactions between Thomson and the defender charged on a continuing account. He also has a preliminary plea (plea 3) directed to the relevancy and specification of the pursuer's averments on the matter of prescription.

Mr Stuart submitted that the pursuer's averments in respect of Schedule 2 to the 1973 Act were irrelevant. He referred to sections 6(1), (2) and (3), 9(1) and (4) and 4(2)(a) of the Act and to Schedule 1 paragraph 1(g) and Schedule 2 paragraph 1(1), (2)(b) and (4). The alleged contractual obligation to make payment for the storage of the scaffolding arose once the contract was made on 13 April 1991 or when the various loads were taken into storage on that or on the immediately following day or, in any event, very shortly thereafter. The pursuer's reliance on Schedule 2 was misconceived. Paragraph 1 of that Schedule applied to an obligation to pay money in respect of services rendered only when they were so rendered in a series of transactions and charged on continuing account. The pursuer's averments provided no basis for either a series of transactions or of their being charged on continuing account. The implication from the averments was that there had not been a series of transactions but rather a single transaction. There was nothing to suggest that Thomson had kept a continuing account or that the defender had agreed to such an arrangement. Nothing at all was averred about the operation of any such account. In H. G. Robertson v Murray International Metals Ltd 1988 S.L.T. 747 there had been no dispute that there had been a series of transactions; it was plain from the references to various journeys on various dates that there had been such a series. The issue in that case was whether there were relevant averments of a continuing account; it was held that the averments made, although not very full, were sufficient (in light inter alia of the invoices produced) to allow inquiry. In the present case there was no offer to prove that a continuing account had been kept by Thomson. The only invoice produced and relied on was in respect of the whole period from April 1991 to March 1998. In R. Peter & Co Ltd v The Pancake Place Ltd 1993 S.L.T. 322 there had been three separate and distinct transactions but no continuing account. Reference was also made to Walker - Prescription and Limitation of Actions (5th ed.) pp. 59-60. Moreover, if contrary to the defender's averments on title to sue the pursuer had averred a relevant title as from August 1998, prescription would cut off any obligation falling due prior to August 1993.

The pursuer submitted that his averments with respect to prescription were relevant. The 1973 Act should be interpreted in favour of the creditor who in this case had provided services for more than seven years. If on a true construction there was a single contract enforceable only when the services had been finally completed, that event had not yet occurred. The alternative construction, although perhaps not spelt out very clearly, was based on the fact that Thomson had made up his charge for storage on a weekly basis. That was the sort of situation envisaged by paragraph 1 of Schedule 2. The situation could not be equiparated to that of periodical payments falling due under a lease. The storage arrangements were terminable by Thomson at any time. H. G. Robertson v Murray International Metals Ltd was helpful to the pursuer. It was also appropriate to have regard to the invoice lodged in this case. For the purpose of a continuing account it was unnecessary that the creditor should actually have done anything in respect of keeping an account; nor was it necessary that the debtor had to agree to anything the creditor was doing in that respect. In contrast to the circumstances in R. Peter & Co Ltd v The Pancake Place Ltd the pursuer here had made a "consolidated demand for payment". The pursuer was entitled to inquiry in respect of his whole claim.

In my view in approaching the application of the 1973 Act it is first necessary to identify the character of the claim made. In the present case the pursuer by his first conclusion sought payment of £118,885 (subsequently amended to £159,087). That conclusion is based on the proposition (reflected in the pursuer's pleas-in-law) that the defender "made a contract with the said David Thomson for the storage of material" and that the sums sued for in each conclusion are "a reasonable charge for the storage in question". The computation of the sum first concluded for is brought out in a single invoice lodged with the summons. That invoice is dated 3 April 1998 and carries a specific sales invoice number. Under the heading "Description" there appears after a reference to a particular prosecution the following:-

Certain totals are then brought out.

There are no averments by the pursuer expressly condescending on when the sum first sued for or any part of it first became enforceable within the meaning of the latter part of section 6(3) of the 1973 Act. It is, however, necessarily implicit in the bringing of this action that the sum first concluded for was due and resting owing by at least May 1998 when the action was raised. There is, on the other hand, no suggestion on averment that that sum and every part of it became due only on demand (and, if so, when any such demand was first made). No such suggestion was made at the debate where reliance was placed on and only on Schedule 2 to the Act. In these circumstances the inference must be that obligations to pay storage charges arose and became enforceable periodically at the expiry of each appropriately chargeable period of storage. The charging of storage at a weekly rate suggests prima facie that the charge for the immediately preceding week would become enforceable at the end of that week. A slightly longer period (possibly to the end of the calendar month) might be an alternative. However that may be, the implication, in the absence of averments to the contrary, is that an obligation on the defender to make payment first became enforceable on or about 20 April 1991 (or possibly 30 April 1991) in respect of storage to that time; and that thereafter periodical payments additionally became enforceable at relatively short intervals. The periodicity is not unlike rental payments arising under a lease or a contract of hire. The circumstance that the present contract may have been terminable at will is not, in my view, a relevant distinction.

Section 6(1) of the 1973 Act provides for the extinction of certain obligations if after "the appropriate date" the relative obligation has subsisted for a continuous period of five years without certain steps having been taken. Those obligations include any obligation arising from a contract (Schedule 1 paragraph 1(g)). Section 6(3) provides:-

It follows in my view that, subject to the contention that the obligations in question in the present action are obligations of the kind specified in Schedule 2, such obligations as are referable to periods in respect of which payment was due prior to five years before the action was raised have been extinguished by prescription.

In my view there are no relevant averments which, if proved, would establish that the obligation or obligations in questions in the present action are of the kind specified in Schedule 2. Paragraph 1 of that Schedule is relied on. To bring the present case within that paragraph it would, however, be necessary to prove particular facts and circumstances demonstrating that the obligation to pay money in respect of the storage services rendered was:-

The essence of that provision is, in my view, that there exists or has existed between the parties a relationship or a course of dealings under which there has occurred a series of transactions for the supply of goods or the rendering of services (or both) and in respect of which the creditor has charged on continuing account. The notion of a series of transactions imports a number of distinct dealings (whether under a single contract or under several contracts) had between the parties from time to time, the individual dealings together comprising a series. It is illustrated by the individual transportation transactions on various dates referred to in H. G. Robertson v Murray International Metals Ltd. The notion of "repeatedly transacting" was adopted in H. G. Robertson v Murray International Metals Ltd at p. 749E and followed in R. Peter & Co Ltd v The Pancake Place Ltd at p. 324E-F. The paragraph is not concerned with single transactions (Walker - Prescription and Limitation of Actions (5th edition) at p. 60). A single transaction which gives rise to periodical obligations to pay is not, in my view, within the scope of the paragraph. Thus, the appropriate date for the running of the prescriptive period on rental payments under a lease or a contract of hire is, subject to any contractual provision to the contrary, the date on which each payment respectively becomes due. Prima facie the same is, in my view true in respect of payments periodically falling due under a contract, as here, for storage. There are here no averments which, if proved, could establish that the money obligation sought to be enforced is in respect of services rendered in a series of transactions.

Moreover, there are no averments which, if proved, could establish that the obligation was "charged on continuing account". While I do not accept Mr Stuart's submission that the keeping of a continuing account by the creditor requires to be with the agreement of the debtor, it is necessary that such an account should in fact have been kept. To save from the operation of prescription under section 6 an obligation prestable more than five years prior to the raising of the action, it must in my view be demonstrable that that obligation was entered by the creditor into a continuing account, albeit that account may not then have been rendered to the debtor. Prima facie the averments and the invoice produced in this case point merely to an account having been made up retrospectively as at April 1998. There are no factual averments to support any rebuttal of that prima facie inference. For that reason also the application of Schedule 2 is not relevantly pled. I would add that I find no support for the pursuer's submission that the statutory provisions fall to be construed benevolently in favour of the creditor.

For these reasons I shall exclude from probation the pursuer's averments relative to Schedule 2. It is not possible at this stage precisely to determine what obligations are extinguished by prescription or the monetary value of them. That is best determined when after proof the terms and incidents (express or implied) of any contract are established. I would add, however, that, if the pursuer establishes a title to sue the present action, the circumstance that the letter of 23 February 1998 was founded on in the action only in August 1998 does not necessarily bring forward to August 1993 the "appropriate date" for the purposes of prescription.

At the outset of the debate Mr Stuart intimated that the defender was not insisting in his averment "In the circumstances the defender believes and avers that this letter purportedly dated 23 February 1998 is not genuine". It is to that averment that the pursuer's tenth plea-in-law is directed.

In the whole circumstances I shall sustain the defender's third plea-in-law to the effect of excluding from probation the pursuer's averments in Article 9 "The obligation upon the defender to make payment ... the pursuer relies to found the present action". The averments so excluded include the averment expressly departed from in relation to the raising of the action of multiplepoinding. I shall also of consent sustain the pursuer's tenth plea-in-law and exclude from probation the sentence in Answer 11 "In the circumstances ... is not genuine". I shall then put the case out By Order for discussion of further procedure.