Scottish Court of Session Decisions

[1] When this case called before me on 9 February 2001, Mr Ferguson for the defenders moved me to refuse to allow amendment in terms of paragraphs 2 and 3 of the minute. The adjustments which had been made to the Open Record sought, he said, to add what was a substantially new claim and the purpose of the amendment was to give effect to those adjustments. The action had been raised on 14 July 1999 and almost immediately sisted. The sist was recalled on 19 December 2000. In the exercise of its discretion, the court should refuse to allow amendment to be made in terms of paragraphs 2 and 3 of the minute because the effect of allowing those amendments would be to introduce a separate and distinct claim relating to a completely different financial product from that with which the original claim was concerned. That was apparent from the adjustment. Although the new claim was pleaded as a breach of the same general contractual obligation as the first claim, additional duties were averred in relation to the new claim. Prima facie this was a new case brought after the expiry of the prescriptive period. The obligation to make reparation persisted for five years from the date when the claim became enforceable and the claim became enforceable by the concurrence of injuria and damnum when the loss occurred. That loss occurred in 1991 when the product was launched and any claim arising from that loss prescribed in mid 1996. The defenders' position was that having regard to the nature of the relationship between the parties and the pursuers' intimate relationship with the defenders, the pursuers could have become aware of occurrence of loss from the date of launch of the product. Amendment should be refused in terms of paragraph 2 and 3 because (1) in all but name a new and completely different claim was being made, (2) prima facie that claim amounted to a new case added after expiry of the prescriptive period, (3) there was no good reason why the second claim had to be litigated along with the first claim, (4) if this minute of amendment was refused it would be open to the pursuers to bring a separate action and (5) expenses were not a major issue in relation to the sum sued for and any economy in expense was not therefore an important factor. Any lapse of time which might now occur before the raising of a separate action in respect of this claim was unlikely to affect prescription. It might not be possible to divorce prescription issues from other issues and if a second action was raised, the progress of the present action would not be impeded by consideration of prescription. The kind of issues likely to arise would take up many weeks of proof. If amendment in terms of paragraphs 2 and 3 was refused, the adjustments which had been made would become irrelevant in the context of the first claim and that claim could proceed without the delay which consideration of the issue of prescription would cause.

[2] For the pursuers Mr Young said that the action as raised related to a joint venture between the Royal Bank of Scotland and the defenders. It was concerned with a product known as the Flexible Mortgage Plan (FMP) and the adjustments raised an issue in relation to another financial product, the Lifetime Security Plan (LSP). Paragraph 2 of the amendment sought to add a new conclusion in relation to the LSP policies. New articles of condescendence had been added by adjustment (Cond. XI to XIII) relating to the LSP policies and Cond. XIII contained averments on the design defects of those policies in a similar manner to averments relating to the FMP policies. The discretion of the court should be exercised in favour of the pursuers. There was nothing to prevent the defenders from taking the prescription point at procedure roll or at some later stage of the action. This minute of amendment was lodged at an early stage in the action and there was no prejudice to the defenders in allowing amendment. The prescription point could be discussed on procedure roll or, if need be, a preliminary proof could be allowed. Prima facie the new claim relating to the LSP policies had not prescribed. The pursuers became aware of the defect in the product in 1998. There was a reasonable diligence argument open under Section 11. The LSP case was based on the same obligation as the FMP case. There had been no adjustment of the contractual position. When one looked to Cond. XIV at p.23 of the Open Record the obligations applicable to the FMP policies are now said also to apply to the LSP policies. It was the same obligation for the FMP policies as for the LSP policies. That founded a reasonable argument that there was no prescription in respect of LSP policies. Allowance of the amendment would not necessarily exclude separate procedure for the LSP policies. Moreover if the amendment was not allowed, it would be possible for the pursuers to continue the present action in relation to LSP as well as FMP policies on the basis of the adjustments which had been made and a further increase in the sum sued for - an amendment which could scarcely be opposed - without adding another conclusion. The proposed amendment was however the more appropriate way of proceeding. If there was a real issue of prescription, it could be dealt with in the present action and was unlikely to raise any major problem there.

[3] In reply, Mr Ferguson said that the pursuers came to court with a minute of amendment which deliberately separated the conclusions and that was done because it was recognised that there were two separate claims. The test was whether this was a new claim or merely an expansion of the existing claim. Refusal of the amendment would keep both claims on the right track.

[4] Although this minute of amendment comes shortly after the recall of the sist, this action has been in court for a considerable time. It is clearly desirable that it should make progress. In relation to the claim for which it was originally raised, it is unencumbered by any question of prescription. Whatever the merits of the question of prescription in relation to the new claim added by adjustment and with which paragraphs 2 and 3 of the minute of amendment are concerned, it is clear that on that claim there is a live issue of prescription which may delay progress of the action. Although both claims are referable to the same contractual obligation, the factual content of the alleged breach of that obligation and of any grounds of delictual liability is distinct. Each claim requires separate consideration, both on its facts and on the merits of the grounds of liability. In that situation, I see no advantage in the conjunction of the FMP and LSP claims in one action and the disadvantage of delaying the disposal of the FMP claim. The LSP claim cannot, in my opinion, be regarded as merely an expansion of the FMP claim and would appropriately form the subject matter of a separate action. If, as Mr Young argued, the pursuers can, if the amendment is refused, proceed by an alternative route within the confines of the present action, the amendment, although perhaps convenient, is unnecessary. It did not seem to me that I should anticipate on a consideration of the present motion arguments which might arise if that alternative course were to be adopted. I therefore refused to allow amendment in terms of paragraphs 2 and 3 of the minute.