Scottish Court of Session Decisions

[1] This is an appeal by the defender against an interlocutor of the Sheriff Principal of Tayside, Central and Fife dated 15 March 1999 in which he refused an appeal by the defender against an earlier decision of the Sheriff by which the defender was found liable to pay damages to the pursuers on the ground of the defender's negligence et separatim breach of contract. By his said interlocutor the Sheriff Principal pronounced decree for firstly the sum of £10,344.52 with interest and secondly the sum of £1,000 with interest. The only issue in the appeal to this court relates to the award of the said sum of £10,344.52 which the defender submitted should be reduced to a sum of £1,014.52.

[2] The defender's fault, which is no longer disputed, was alleged to be in his failure to show the care to be expected of an ordinarily competent structural engineer, having been instructed by the pursuers in that capacity. He had been requested by the pursuers to prepare a report on the type of foundations necessary for a house which they proposed to erect on land which they owned in Musselburgh, East Lothian. In February 1991 the pursuers were advised by the defender that "nominally reinforced strip footings" were appropriate as foundations for the proposed house. These foundations, which are formed by a trench filled with concrete, are cheaper to construct than piling foundations, which are columns sunk into the ground. In reliance on the defender's said advice the pursuers purchased a timber framed house kit and instructed contractors to erect the house on the site. The contractors commenced digging the foundations in May 1992 and it shortly became apparent that strip foundations could not be used because of the existence of a wall which ran across the site and which had been exposed by the digging. The defender's negligence consisted in his failure to discover and advise the pursuers of the presence of this wall and the consequent need for piling foundations. The pursuers were independently advised that concrete piling foundations would have to be used and these were then constructed at an additional cost to the pursuers of a sum of £9,320. The award to the pursuers of this sum, which is included in that of £10,344.52, is the only matter now in issue.

[3] It seems to us that, in the circumstances which we have narrated, the additional cost incurred by the pursuers for the construction of piling was incurred directly as a consequence of the defender's negligence. If the pursuers had not been negligently advised by the defender, it is clear from the evidence that they would not have entered into contracts for the purchase of the kit house and for its erection upon the terms which they did. The evidence demonstrated that, at the time of these contracts, they could not have afforded the construction of piling foundations. They only eventually met the additional cost which they incurred as a result of an increase in the first-named pursuer's salary. The pursuers had no option but to incur that additional cost if they were to comply with their contractual obligations for purchase and erection of the house. They derived no benefit from doing so beyond that for which they had contracted. The fact that the pursuers had to pay an amount additional to that which they contracted to pay for erection of their house was a natural and foreseeable consequence of the defender's negligence for which prima facie the defender is liable.

[4] On behalf of the defender it was however submitted that if the award were made it would place the pursuers in a better position than that which would have been the case if the defender had not been negligent. This submission did not, as was emphasised, proceed on the basis that the pursuers ultimately had a more valuable house than that which they had anticipated, but on the basis that the building of the house which they contracted to buy and erect would have necessarily involved the cost of piling, whatever the defender had advised. The fallacy of this argument is that it assumes that the pursuers would have gone ahead with their proposals if they had been aware that the additional cost would have to be incurred. This was the position in the two cases cited to us as supporting the defender's position, namely Auburn Municipal Council v. A.R.C. Engineering Pty. Ltd. [1973] 1 N.S.W.L.R. p. 513 and Bevan Investments Ltd. v. Blackhall and Struthers (No. 2) [1978] 2 N.Z.L.R. p. 97 which were both cases based on defective design. In the former case it was held (cit. supra at p. 523) that

In the latter case it was stated (cit. supra at p. 111) that

[5] No such conclusion is possible on the facts of this case. On the contrary, if the pursuers had been properly advised, it is abundantly clear on the evidence that they would not have proceeded as they did proceed because they could not have afforded to do so. It is a matter of speculation what, if anything, the pursuers would have done if they had been advised that piling foundations were required for the erection of a house on the site. There is thus no basis in the evidence for a comparison between the position in which they were ultimately placed and that in which they would have been if the defender's negligence had not occurred. The loss for which we have held the defender to be prima facie liable is not therefore affected by any such comparison.

[6] For these reasons we refuse the appeal and affirm the interlocutor of the Sheriff Principal.