Scottish Court of Session Decisions

In this Sheriff Court action, which was raised as long ago as August 1987, the pursuer seeks an award of compensation from the defenders under section 1(4)(a) of the Coal-Mining (Subsidence) Act 1957. He avers that his house 102 Station Road, Lochgelly suffered subsidence damage as a result of the working and getting of coal, and that this led to the demolition of the house in November 1994. In the meantime the 1957 Act had been superseded by the Coal Mining Subsidence Act 1991, but the pursuer's claim is governed by the earlier Act.

Section 1(2) of the 1957 Act provided that as soon as reasonably practicable after the occurrence of any subsidence damage the defenders were to execute "remedial works". According to subsection (1) of that section, the expression "subsidence damage" meant, inter alia, any damage to a building caused by the withdrawal of support from land in connection with the lawful working and getting of coal, or of coal and other minerals worked therewith. In the context of the present type of case subsidence damage was to be deemed to occur "at the time when evidence of the damage first appears" (section 17(2)). Subsection (3) of section 1 stated that the defenders might "instead of executing remedial works under the last foregoing subsection, elect - (a) to make a payment equal to the cost reasonably incurred by any other person in executing remedial works;...". Subsection (4) of section 1 stated:

Section 13(1) provided that any question arising in Scotland under the Act should, in default of agreement, be referred to the sheriff. Subsection (2) of that section provided:

Under subsection (3) the sheriff was empowered to make such orders as might be necessary to give effect to his determination, and in particular by order to require the defenders to carry out any obligations imposed upon them by the Act within such period as he might direct, and to award damages in respect of any failure of the defenders to carry out any such obligations within a reasonable time.

The main questions in this appeal arise out of the notice which the pursuer gave to the defenders of the fact that his house had sustained damage. Section 2(1) of the Act stated that the defenders should not be required to execute any works or to make any payment under subsections (2) to (5) of section 1 in respect of subsidence damage to any property unless the owner of the property or some other person who was liable to make good the damage in whole or in part had given notice in writing to the defenders of the occurrence of the damage in such manner, within such time, and containing such particulars as might be prescribed (in the Act referred to as a "damage notice") and had afforded the defenders reasonable facilities to inspect the property, so far as he was in a position to afford such facilities. Under the Coal-Mining (Subsidence) (Damage Notice) Regulations 1957, the time within which the damage notice had to be given, in the case of subsidence damage occurring after the passing of the Act, was two months from the occurrence of such damage. However, Regulation 4 provided that the relevant Minister or the defenders might on written application extend the time for giving a damage notice, whether it had expired or not, in any case in which it appeared that there was a reasonable ground for the notice not being given or not having been given within that time, or that the liabilities of the defenders in respect of that subsidence damage had not been substantially increased by the notice not having been given within that time. Regulation 6 provided that a damage notice was to be given in the form set out in the Schedule to the Regulations or in a form containing the like declaration and information. Part I of the Schedule, which related to damage to dwelling-houses, provided for the damage notice to contain information as to the "date when damage occurred" and "brief description of damage (e.g. walls cracked, windows jammed, etc.)".

Subsection (2) of section 2 of the 1957 Act provided that as soon after receiving from any person a damage notice as was reasonably practicable, the defenders were to consider whether or not to exercise their powers of election under subsections (3) or (4) of section 1 and to give notice in writing of their decision to the person aforesaid. Subsection (3) of section 3, which dealt with cases where further damage was likely or had occurred, provided that where in the case of any property a damage notice had been served on the defenders and before remedial works had been completed, and without the defenders having given notice under section 2(2) that they elected to make a payment under section 1(4), further subsidence damage occurred to that property, the damage referred to in the damage notice and that further damage should be treated as one. The subsection went on to provide, inter alia, that a fresh damage notice should only be required if, before the occurrence of the further damage, notice had been served under section 2(2) of an election under section 1(3).

Section 6(1) stated that the person entitled to serve a damage notice should not be entitled to proceed at the same time in respect of the same damage to that property with both a claim against the defenders by virtue of subsections (2) to (5) of section 1 and a claim against the defenders or a licensee of the defenders for damages or compensation under a liability arising apart from the Act, but might elect which of those claims he would proceed with for the time being.

On 24 September 1984 the pursuer submitted a "damage notice" to the defenders in respect of damage to his house. Under "brief description of damage" were the words "house sinking at one end causing other cracking through house & jammed window". Under "date when damage occurred" no information was given. Prior to submitting this form the pursuer had written a letter to the defenders dated 30 August 1984 in which he stated: "Over a period cracks have appeared in my property. Would it be possible for someone from your department to investigate it". On or about 3 October 1984 the pursuer's house was inspected by officials of the defenders. Cracking was found in several rooms and on the exterior of the house. There were evident signs of defects on the structure of the house. Thereafter by letter dated 16 October 1984 the defenders repudiated liability, on the ground that they were satisfied that the house had not been recently damaged by subsidence due to coal workings. The pursuer avers that the cracking continued to spread over the subsequent seven years, and that eventually in or about March 1991 the house became uninhabitable due to danger presented to the occupants by the risk of structural failure or its collapse into a plump-hole. He was advised to vacate the house. The damage to the house was caused by the withdrawal of support from land beneath it as a consequence of the working and getting of coal.

The first question relates to the relevancy and specification of the pursuer's averments as to the occurrence of damage relative to the notice which was given by him to the defenders on 24 September 1984. It was not disputed by counsel for the pursuer that in order to be able to enforce any obligation against the board it was mandatory for the pursuer to give a damage notice to the board within two months of the occurrence of the damage. In Petch v. Gurney [1994] 3 All ER 731 Millett L.J. at page 738 said:

Counsel for the pursuer also did not dispute that it was for the pursuer to make averments which, if proved, would establish that the notice in the present case satisfied the requirement that it should be given within two months of the occurrence of the damage.

As we have already noted, section 17(2) stated that subsidence damage should be deemed to occur "at the time when evidence of the damage first appears". Counsel for the parties were not at one as to how this statutory language should be applied. For the pursuer it was submitted that what mattered was when the pursuer realised there was a connection between the damage and subsidence, or at any rate when a reasonable person in his position would have made that connection. It could not have been the intention of the legislature that a claimant should be deprived of his remedy if the discovery of the subsidence damage was less than two months before the notice. The pursuer's approach was said to be supported by the terms of section 3(3) of the Coal Mining Subsidence Act 1991 in which the period allowed for the giving of a damage notice began with "the first date on which any person entitled to give the notice had the knowledge required for founding a claim in respect of the damage", and extended for a period of six years beginning with that date. For the defenders it was submitted that "the time when evidence of the damage first appears" did not depend on what was seen or understood by the person giving the notice, but on what could be seen. If this was thought to be a severe consequence of the language of the statute, it should be borne in mind that under Regulation 4 the time limit for the giving of a damage notice could be extended, and that it followed from the terms of section 13(2) that a claimant could rely on being able to discharge the initial onus upon him by showing merely that the nature of the damage and the circumstances were such as to indicate that the damage might be subsidence.

As regards the pursuer's averments on this matter, the defenders pointed out that all that the pursuer averred was that:

Counsel for the pursuer submitted that this provided a relevant and sufficiently specific basis for the application of the provisions of the 1957 Act. Counsel for the defenders pointed out that the pursuer's pleadings lacked any averment which stated specifically when the cracking, or indeed any other sign of alleged subsidence damage, had first appeared. If the pursuer was in a position to make out a relevant case, why did he not spell that out? His admissions as to the terms of his letter dated 30 August 1984 and the notice dated 24 September 1984 tended to support the view that the pursuer was in no position to make the critical averment.

There is considerable force in the defenders' submissions, whether the period within which the damage notice had to be given ran from the date when the damage could be seen or from when the pursuer first became aware of damage. The pursuer does not in terms aver when the cracking was first seen or could have been seen by him. Moreover the admissions made by him tend to indicate that it is doubtful whether the notice satisfied the extremely strict requirement of the two month period. With some reluctance, however, we have come to the conclusion that it would be going too far and too fast to take the view that on these pleadings the pursuer would be bound to fail to show that the notice was given timeously. The existing averment as to what he observed in or about August 1984 could be read as conveying that it was not until that month that such cracking first became apparent. Another factor is of some significance. It became apparent during the discussion of the appeal that the defenders did not challenge the timeousness of the notice until the raising of the present action some three years later. In these circumstances we do not consider that at this stage it is appropriate to sustain this attack on the relevancy and specification of the pursuer's averments. It follows that we do not agree with the sheriff's view that on his averments the pursuer was "quite uncertain of the date when the subsidence occurred". The sheriff also made a number of observations which the pursuer criticised. These were that any subsidence might have taken place during the occupancy of a previous heritable proprietor; that perhaps the pursuer paid a low price for the property when he bought it in 1975; and that the value of the property might have been reduced as a result of subsidence. For the pursuer it was submitted that there were no averments to support any of these statements, which were no more than speculation on the part of the sheriff. The sheriff was also criticised for observing that one obvious significance of the date of the occurrence of the damage was in order to determine a "terminus a quo from which one can calculate and determine how the Limitation Acts apply". It was submitted that such legislation had no application to the circumstances of the present case. These criticisms were, in our view, well-founded. What the sheriff required to do was to concentrate on the pleadings and not to embark on a series of surmises in reaching a decision upon a debate on relevancy and specification. Whether the date of the occurrence of the subsidence damage was a matter of importance depended on the terms and intention of the 1957 Act and not on other legislation.

The second point at issue in this appeal was concerned with the fact that in the notice the pursuer had given no information as to the "date when damage occurred". For the pursuer it was submitted that the requirement for such information, which reflected the language of the Schedule to the Regulations, was merely a direction as to the giving of such particulars. Any deficiency in this respect could be made good at a later stage. The defenders submitted that a notice would not be a valid damage notice unless it contained information as to the date when the damage occurred. They relied on what they described as the strong terms of section 2(1), and submitted that the reason why the provision of that information was mandatory was that it enabled the defenders at the stage when the damage notice was submitted to decide whether, on the face of the notice, the Act applied. It was moreover information which was peculiarly within the knowledge of the claimant.

We are not persuaded that the statutory provisions have the mandatory effect for which the defenders contended. The fundamental purpose of a damage notice was to enable the defenders to obtain early warning of subsidence damage so that they could carry out any remedial works which were required as promptly as possible. No doubt that object would be defeated if there were not a time limit, although there could be a case for extending the original period in the circumstances of the particular case. The same considerations do not appear to us to apply to the need to specify when the damage occurred. The intention of the statute was to enable the defenders to investigate claims of subsidence damage, and during the course of such investigation it would have been open to them to call on the claimant to supplement the information contained in the damage notice. There would not have been a failure to carry out a fundamental object of such a notice. In passing we would observe that the layman, faced with a requirement to state the "date when damage occurred", might well find that it was difficult to comply with the requirement. The notice did not acquaint him with the fact that subsidence damage was to be deemed to occur "at the time when evidence of the damage first appears". Accordingly, while the notice failed to give information as to the date of occurrence of damage, that failure related to a requirement which was directory rather than mandatory. We therefore reject the defenders' attack on this aspect of the notice which was given to them by the pursuer on 24 September 1984.

At this point it is convenient for us to refer to the pursuer's averment in Article 3 of the Condescendence to the effect that the defenders were personally barred from refusing service of the damage notice. This appears to proceed on the basis of an averment about a letter from the defenders to David Tanner & Partners, Chartered Surveyors dated 15 January 1986, followed by averments designed to show that the defenders generally "waived" insistence in the two month period and allowed claims to be submitted up to six years after the damage occurred. Counsel for the pursuer accepted that these averments could be of no relevance in dealing with a complaint that the notice given on 24 September 1984 was out of time since, in the absence of any extension of the period under Regulation 4, a notice which was out of time was of no effect whatever. Accordingly, these averments could only be relevant to a failure to carry out a requirement of the Regulations as to the provision of information which was directory only. However, as the defenders pointed out, that did not dispose of the difficulty, since there is no averment that the pursuer acted to his disadvantage in reliance on any of the defenders' actions which are the subject of these averments. In our view, therefore, these averments are irrelevant.

It remains for us to deal with submissions which were made by the parties in regard to the remedy sought by the pursuer in this action, which is one of compensation under section 1(4)(a) of the 1957 Act.

At first sight it might appear that it is not open to a claimant to insist on the payment of compensation. The structure of the Act, as we have already narrated, imposes a duty on the defenders under section 1(2) to execute remedial works. The payment of compensation, whether it is under subsection (3) or (4) of section 1 of the Act is expressed as a matter for election on the part of the defenders. At the same time, however, section 6(1) plainly envisaged that a claimant might competently proceed against the defenders with a claim by virtue of subsections (2) to (5) of section 1 of the Act as an alternative to a claim of damages or compensation under a liability arising apart from the Act. In the present case it is to be noted that the pursuer's claim relates to damage to a property which has since been demolished, and that the quantification of the claim is apparently designed to follow the alternative to the carrying out of remedial works which is set out in subsection (4) of section 1, namely by way of a payment equal to the amount of the depreciation in the value of the property caused by the damage. This is an alternative which would, if anything, be favourable to the defenders. In these circumstances we do not accept the argument which the defenders presented for the first time in the appeal, that even if the house had sustained subsidence damage, the defenders were not subject to a duty to make payment of compensation in accordance with section 1(4)(a).

During the course of his discussion of the pursuer's averments in regard to the quantification of compensation the sheriff made a number of criticisms of the quality of the pursuer's averments. However, we consider that the pursuer has given adequate notice as to the nature of the damage sustained by the house, and of the basis on which the compensation sought is arrived at. The defenders questioned whether it was correct for the pursuer to quantify his loss as at November 1994, when the demolition of the house took place. However, this is a point which it would be more appropriate to consider in the light of the results of enquiry.

In these circumstances we are satisfied that the appeal should be allowed, and that there should be enquiry by way of proof before answer, subject to the exclusion from probation of the pursuer's averments in Article 3 to which we have already referred, namely from "By letter dated 15th January 1986" on page 14 of the Appeal Print to "said Notice" on page 15.

During the course of the discussion it was suggested that it might be appropriate in the present case for proof to be restricted in the first instance to one or more issues relating to the merits of the present action, leaving over enquiry into the quantification of the pursuer's claim. In the circumstances this appeal will be put out by order in order that this matter can be discussed.