Scottish Court of Session Decisions

Hands v. R & J.A. Maccallum & Ors [2003] ScotCS 60 (7 March 2003)

OUTER HOUSE, COURT OF SESSION
A3276/00	OPINION OF T G COUTTS, QC Sitting as a Temporary Judge in the cause ROBERT NORMAN HANDS (AP) Pursuer; against R & J A MacCALLUM and OTHERS Defenders:   ________________

Pursuer: Kennedy, Solicitor-Advocate; Balfour & Manson

Defenders: Crawford; Brechin Tindal Oatts

7 March 2003

1. In this action which came before me on procedure roll, the pursuer sues his former solicitors for alleged professional negligence. Two matters which were argued at procedure roll, remained for consideration, the third which was concerned with the formulation of the claim for damages having been amended in the course of the debate. These matters concerned the defenders' plea of prescription and further their plea to the relevance and want of specification in the pursuer's pleadings.

Summary of Pursuer's Case

2. The pursuer who sought to develop the property at the Millearn Hotel, Ayr, which was owned before 1978, obtained planning permission in 1978 to build sixteen self-catering suites as an extension to that hotel. Ten of the sixteen were constructed. The foundations and below ground services were installed for the six remaining suites, leaving a concrete raft on the site on which it was intended to be complete the development. In 1982 a further planning application was made on plans submitted by the pursuer's architect. These sought permission to change the use of the ten completed suites to residential use as ten two-apartment flats. In order to obtain that permission the pursuer's architect amended the plans to show car parking spaces over the concrete raft area. The amended planning application for that purpose was granted in April 1983. The pursuer, astonishingly, avers that he "remained unaware that the application was granted on amended plans". As a result, in April 1983 the pursuer received planning permission to change the use of the whole then existing accommodation being the hotel and the ten units to residential use. Later in 1983, about 2 August, the pursuer applied to the planning authority for permission to change the planned use of the six unconstructed units to residential flats. That application was refused on 14 September 1983. It was appealed and the appeal was refused on 19 July 1984. Thereafter the pursuer gave notice of his intention to complete the development of the six self-catering units and litigation ensued. A procedure roll was held, reported 1989 SLT 124 in which it was held by the Lord Ordinary (Prosser) that the 1978 grant survived the 1983 grant unless there was some practical incompatibility between the two grants. It is admitted that there was such a practical incompatibility. It was occasioned by the 1983 grant requiring the provision of car parking spaces on the concrete raft area, upon which it had been proposed, originally, to erect the self-catering suites.
3. The pursuer meanwhile had instructed the defenders in connection with the development of the site. This was to convey the hotel flats and the ten two apartment flats which had been approved. In order to deal with the whole development a Deed of Conditions was drawn up by the defenders. The pursuer avers that the detailed terms of that exercise were not discussed with him, that he did not get a draft for his comment and approval. Despite having signed it the pursuer averred that the defenders did not advise the pursuer of the basis on which the planning permission for change of use had been granted in April 1983; that the execution of the Deed of Conditions on 19 October 1983; by terms precluded any further development; that it further avers that it was not until the course of adjustment in an action he raised against his architect, based upon the same problem with parking spaces that he became aware that the Deed of Conditions contained conditions which would have prevented the pursuer from completing his development. The adjustments in question were intimated on 26 November 1996. Until that time the pursuer said he was not aware nor could with reasonable diligence have been aware that the Deed of Conditions was defective and had caused him loss. He abandoned his action against the architect.

The Defenders' Plea of Prescription

4. The defenders argued that the pursuer's loss arose in October 1983 at the time of the negligent act condescended upon, or that, in any event, that he knew or ought to have known by 1988 that he had suffered loss when he discovered that his proposed development could not proceed.
5. The pursuer conceded, a concession which could not properly have been withheld, that his action would have prescribed under the provisions of section 6 of the Prescription and Limitation (Scotland) Act 1973 unless he could have involved section 11(3) and established that he was not and could not with reasonable diligence have been aware that he had suffered loss until five years before his action was raised, i.e. 30 November 1995. His contention was that the loss sued for was different from that in the case he had brought against the architect. It was accordingly different from the situation in Glasper v Rodger 1996 SLT 44.
6. The defenders' argument was that following the approach adopted by Lord Clyde in Greater Glasgow Health Board v Baxter Clark and Paul 1992 SLT 35 approved in Glasper v Rodger 1996 SLT 44, it is sufficient knowledge if the pursuer is aware that loss had occurred in relation to a particular matter. It is awareness of loss rather than any quantification thereof or the precise delinquent that puts the pursuer on inquiry. There were no relevant averments in the present case other than those of ignorance in general to indicate that the pursuer could not with reasonable diligence have become aware that the loss he had sustained was as a result of the said Deed of Conditions.

Decision on Prescription

7. The alleged negligence which caused loss occurred in 1983. The pursuer's averments whereby he said he was ignorant not only of the planning permission and the amendment to his plans but also of the content of the Deed he had signed, however improbable that seems could not be decided at procedure roll. What the pursuer has not relevantly explained however is his inaction after he did discover in 1988 that his development could not proceed. Because his development could not proceed he had suffered loss. It is also clear that being anxious to sue somebody in relation to that loss he sued his architect. At the time of the hearing before Lord Prosser in 1988 the pursuer was not represented by the present defenders. The circumstances relating to the planning permission and Deed of Conditions did not alter. The pursuer knew he had suffered loss, he knew that that loss was occasioned by negligence. The circumstances are in my view the same as those before Lord Clyde in Greater Glasgow Health Board v Baxter Clark & Paul, 1992 SLT, where he said at page 40:-

"In my view the pursuers' contention is correct that the subsection looks for an awareness, not only of the fact of loss having occurred, but the fact that it is a loss caused by negligence. In the first place, while I do not go so far as senior counsel for the pursuers in stating that this is the plain meaning of the words, I do not consider that the ordinary and natural meaning of the phrase involves an inclusion of the ingredient of causation by fault. The construction advocated by the defenders does not seem to me to give sufficient recognition to the presence of the critical three words. Indeed, if Parliament had intended what the defenders submit is the proper construction, the words could have been altogether omitted. Counsel for the defenders argued that it was necessary to refer to the fact that the loss was resulting from an act, neglect or default because it was with that that the section was concerned. As senior counsel for the defenders put it, the critical phase was inserted to draw attention back to s. 11(1) to show the kind of loss of which the creditor has to be aware without making awareness of the fact of causation an essential for the prescriptive period to start running. But the whole section is concerned with claims for reparation which involve damnum caused by injuria and it does not seem to me that the critical words could have been added simply as a reminder of that. They must be there for some purpose and they must be given some meaning. In accordance with the ordinary use of the language which is used, awareness of loss having occurred is not enough. What the subsection requires is awareness of loss caused by negligence having occurred."

In Glasper v Rodger 1996 SLT 44the Inner House stated as follows:-

"We agree with Lord Clyde's observation in Greater Glasgow Health Board v Baxter Clark & Paul 1992 SLT at p 40D that the subsection looks for an awareness, not only of the fact of loss having occurred, but of the fact that it is a loss caused by negligence. In that case it was clear from about the time of practical completion that the hospital at Yorkhill was suffering from various defects. It was averred that widespread and progressive cracking and detachment of the site fixed mosiac was observed and that there were defects in the windows rendering them difficult and impossible to open and close, resulting in water penetration, extensive air infiltration and timber decay. The pursuers' averments indicated an awareness by them not only of loss but also of fault causing it. They averred that they believed that their loss was due to a construction fault rather than a design fault, but as Lord Clyde said at p 41K, this did not prevent the five year period from starting to run against them in relation to the defenders, who were a firm of architects. Furthermore they had said nothing in their averments to explain why they could not with reasonable diligence have become aware that loss, injury or damage caused as aforesaid had occurred. They had said nothing to explain why this should be so or what steps they took, and on this ground also their averments were held to be irrelevant.

In the present case the pursuers' lack of awareness, according to their averments, relates not to the question of causation but to the fact that they had sustained a loss in the first place. A party who is aware that he has sustained loss, injury or damage may reasonably be expected to take some steps to find out what has caused that loss. Failure to do this will call for an explanation, if the test of reasonable diligence to which s 11(3) refers is to be capable of being satisfied."

8. In the present case the pursuer's averments do indicate that he was aware that he had sustained loss, injury and damage but are completely silent as to the reasonable diligence he exercised to find out what has caused that loss. Glasper v Rodger is directly in point, and binds the Outer House.
9. Accordingly I hold that the pursuer has no relevant or specific averments to invoke section 11(3) of the Prescription and Limitation (Scotland) Act and shall dismiss the action. In so doing I reject the pursuer's argument that this case is concerned with a different loss, a loss flowing from the defective Deed of Conditions and not the negligence of the architect. The pursuer's loss was the failure to develop as he wished but, in any event, it is noted that part of the allegations of negligence against the defenders are that they failed to ascertain the nature of the planning permission obtained by the architect. Both the defenders and the architects are tied in together by the pursuer in his case alleging that negligence caused him loss. I record that I was referred to two decisions by Lord Macfadyen in the Outer House, Britannia Building Society v Clarke 2001 SLT 1355 and Adams v Thorntons W.S., 26 April 2002, but these were of no assistance in the matter before me.

Defenders' Arguments Relating to Lack of Specification

10. The pursuer, it was argued, does not aver when the defenders were instructed or to what effect. Although he says that the defenders were aware of his intentions, it is not said at what date or when, and his intentions plainly varied. Whether or not the defenders were negligent will depend upon the precise instructions they received in 1983. The solicitor's file no longer exists and the defenders are entitled to know precisely where it is said they have failed. The averments regarding the defenders' action or inaction with regard to the planning permission of 1983 are irrelevant as they were not instructed to apply for or obtain planning permission. There is no factual foundation for the allegation that a solicitor of ordinary skill required to attend to such matters. It was the constructed units which required to be sold on. The defenders were not responsible for the incompatibility between the two planning permissions and since the planning permission of 1978 did not survive, no development was possible thereupon.
11. The pursuer's response was that these matters were all sufficiently averred to entitle him to approve a proof before answer.

Decision upon Relevance

12. I do not consider the pursuer's pleadings contain the necessary frankness required in relation to the planning permissions sought and obtained and the inter-relation between the pursuer's architect and the defenders. The professed ignorance of the pursuer is supported in the pleadings merely by a general denial of the defenders' averment that the pursuer's architect forwarded copies of amended plans to him in June 1983. It is extraordinary that the pursuer made the subsequent planning applications in ignorance of the amended plans submitted but as matter of pleading, I would not be entitled to stop the pursuer adopting the attitude of putting the defenders to proof of that averment. It would be highly unfortunate if that denial is not properly made particularly when the pursuer would appear to be in receipt of legal aid for this action.
13. I should only add that it is by no means apparent to me that the Deed of Conditions did preclude development within the terms set out therein. There was reserved to the pursuer for a period of five years the right to erect and form dwelling houses on the areas of ground marked "future development" and it may be inferred from the raising of the action in 1988 which Lord Prosser heard that there did not appear to be any problem about development so far as the title was concerned within the five years envisaged by the Deed of Conditions.
14. However, I would have felt obliged with very considerable reluctance to allow a proof before answer on the case had it not prescribed.
15. In the event I shall sustain the defenders' first plea-in-law and dismiss the action.