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OUTER HOUSE, COURT OF SESSION
[2008] CSOH 90
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A861/02
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OPINION OF LORD EMSLIE
in the cause
ANM GROUP LIMITED
Pursuers;
against
GILCOMSTON NORTH
LIMITED and OTHERS
Defenders:
ญญญญญญญญญญญญญญญญญ________________
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Pursuers: Ellis, Q.C.;
Beveridge & Kellas
Second Defenders: Howie, Q.C.;
MacRoberts
Third Defenders: Lake; Simpson & Marwick
Fourth Defenders: Higgins;
Brodies LLP
ญ20 June 2008
Introduction
[1] The
pursuers in this action own and operate an agricultural centre and auction mart
known as the Thainstone Centre, near Inverurie, Aberdeenshire. The Centre comprises a complex of
interconnected spaces serving a range of functions essential to the pursuers'
business. The offices and sales ring
concourse ("the concourse") occupies an area of about 55 x 60 metres; the lairage in which animals are penned is
even larger, at about 110 x 75 metres;
whereas the former general purposes hall was much smaller and, in terms
of area, represented no more than about 5 per cent of the Centre as a
whole. The general purposes hall was
demolished in around 2003, and has never formed part of the pursuers' present
claim.
[2] In
these proceedings the pursuers claim substantial damages from the compearing
defenders, all of whom played a part in the design and construction of the
Centre in the late 1980s/early 1990s. As
architects for the project the third defenders were responsible for inter alia the design of the Centre (including
the specification of materials), for contract administration and co-ordination,
and for the provision of advice and information to the pursuers. Apparently under subcontract to the third
defenders, the fourth defenders were the consulting engineers on the project,
undertaking both standard and additional duties in that connection. The second defenders were one of three
different sets of contractors engaged to carry out construction works,
including external roof and wall cladding, and undertook the latter through the
first defenders as sub-contractors.
[3] The
damages claimed by the pursuers relate to widespread and serious roofing
failures over those parts of the Centre which remain in existence, namely (i)
the concourse and (ii) the lairage. Articles 4-16
of the Condescendence contain detailed averments of the nature and cause of
these failures, and Articles 18-20 spell out the breaches of duty alleged
against the second, third and fourth defenders respectively. As disclosed on Record, the second defenders
are sued in contract only; the fourth
defenders primarily in delict; and the
third defenders in both contract and delict.
[4] For
their part, the respective defenders deny liability on the merits of the claim,
and in addition maintain that any obligation to make reparation to the pursuers
has been extinguished by operation of the five-year prescription under sections
6 and 11 of the Prescription and Limitation (Scotland)
Act 1973, as amended. A preliminary
proof before answer on the issue of prescription has now taken place in two
distinct stages. Four days of evidence followed
by initial submissions were heard towards the end of 2006 by the late Lord
Dawson shortly before his untimely death, and the remainder of the proof has
now been completed before me in February and March 2008 pursuant to
arrangements sanctioned by the Inner House under Rule of Court 36.13.
The disputed issues
[5] In
summary, the parties are in dispute on three main questions. First,
having regard to the apparent cause, development and progression of the roofing
problems affecting the Centre, were the requirements of section 11(1) of the
1973 Act satisfied so as to warrant the running of prescription from a date
more than five years prior to the raising of the present action in 2002? Second,
if so, was the running of prescription delayed, pursuant to section 11(3) of
the Act, during any period when the pursuers were not aware, and could not with
reasonable diligence have been aware, that loss, injury and damage caused by
some relevant act, neglect or default had been sustained? And third,
by reference to section 6(4) of the Act, was the running of prescription to any
extent delayed or interrupted by error on the pursuers' part induced by the
third defenders as their professional advisers after relevant roofing problems
began to emerge in 1996?
[6] According
to the defenders, the existence of material roofing problems known to the
pursuers by late 1996/early 1997 was sufficient to start the running of
prescription against them at that time.
This was more than five years before the present action was raised
against the second and third defenders in early April 2002, and against the
fourth defenders on 25 July 2002. Although such problems manifested themselves
in different areas at different dates, their nature and cause were
substantially identical throughout.
Having regard to the known emergence of such problems leading to
progressive water penetration in the general purposes hall from September/October
1996 onwards, the pursuers were by April 1997 either aware, or could with
reasonable diligence have been aware, of all matters relevant to the obligation
to make reparation which they now asserted against each of the defenders. At no time were the pursuers under error on
any of these matters, nor was any error on their part induced by any act or
omission of the third defenders.
[7] In
response, the pursuers' position was that although they were admittedly aware
of roofing problems leading to water penetration in the general purposes hall in
and after September/October 1996, they did not appreciate the existence of a
potential cause of action against anyone until a much later date. Moreover, even with reasonable diligence on
their part, it was not until dates between late 1997 and 1999 that they became
aware of similar roofing problems in the concourse and lairage respectively. These dates were well within the period of five
years immediately preceding the raising of this action. Significantly, the present claim was
restricted to problems affecting the concourse and lairage alone, the general purposes
hall having first been over-roofed and then demolished in 2003. In addition, to the extent that the pursuers'
ignorance of the true situation during any period more than five years before
the raising of the present action was attributable to error induced by the
third defenders, no question of prescription could properly arise in a question
with them.
Preliminary legal points
[8] It
is convenient at this stage to deal with a number of preliminary legal points
that were raised at the hearing before me.
These were as follows:-
(a) Onus of proof:
In broad terms
the parties were agreed that the onus
of proving prima facie prescription
under section 11(1) of the Act - a phrase borrowed from the speech of Lord
Millett in BP Exploration Operating Co
Ltd v Chevron Shipping Co 2002 SC (HL) 19, at para [97] - lay upon those (here the defenders) by whom
pleas of prescription were advanced.
Conversely, on any issue regarding lack of awareness for the purposes of
section 11(3), or regarding error for the purposes of section 6(4), the onus of proof lay on the pursuers. In Sinclair
v MacDougall Estates Limited 1994
S.L.T. 76, the first of these issues was resolved by concession, but in Strathclyde Regional Council v WA Fairhurst & Partners 1997 S.L.T.
658 Lord Abernethy (at pp.660-3) specifically held that the defenders, as the
party positively asserting prescription under sections 6 and 11(1) of the Act,
must accept the onus of proving facts
and circumstances sufficient to justify their plea. The pursuers' onus under section 11(3) was more recently affirmed by Lord
Macfadyen in Britannia Building Society v
Clarke 2001 S.L.T. 1355.
In my view the
parties' agreement on these related issues was well founded, and in particular
I accept that the decision in Strathclyde
Regional Council settled any uncertainty as to which party must bear the onus of proof in connection with prima facie prescription for the
purposes of section 11(1) of the Act.
In that latter
context, however, senior counsel on behalf of all of the defenders argued that
the pursuers' pleadings in this case should be held to relieve the defenders of
any further onus of proof. I do not doubt that the concurrence of damnum and iniuria for the purposes of section 11(1) may be made a matter of
judicial admission so as to render further proof unnecessary. Indeed such a possibility was envisaged by
Lord Fraser in Pirelli General Cable
Works Limited v Oscar Faber &
Partners 1983 2 A.C. 1. In the
present case, however, I am unable to identify any such admission, whether
express or implied. Senior counsel's
argument was to the effect that since almost the whole of Condescendence 22
comprised averments referable to sections 11(3) and 6(4), and since such
matters were not pled on an esto
basis, this must be taken to indicate tacit acceptance by the pursuers that
their claims had prima facie
prescribed under section 11(1).
In my opinion,
that argument must be rejected as unsound.
Condescendence 22 contains no
judicial admission relative to the application of section 11(1). On the contrary, it includes (at p.49A) a
general denial of the defenders' averments on prescription, followed inter alia by the averment:
"The
pursuers did not suffer problems with the relevant roofs until August
1997".
Similar averments
appear elsewhere on Record, notably in Condescendence 4 at p.19C-D, and I do
not see how these important features of the pursuers' pleadings can, for
present purposes, be ignored or treated as if they had no weight. It would, I think, be strange if greater
significance were to be accorded to the absence of the word "esto" as an introduction to the
pursuers' averments on sections 11(3) and 6(4) than to the absence of any
judicial admission referable to section 11(1), or to the presence of an
express denial and positive assertions in that regard.
(b) Effect of the defenders having led no
evidence:
Senior counsel
for the pursuers contended that, since the defenders had led no evidence at the
proof (although clearly having potentially relevant evidence at their
disposal), they could have no complaint if the most favourable inferences were
drawn in the pursuers' favour:- Ross v Associated Portland Cement Manufacturers Limited 1964 1 WLR 768,
esp. per Lord Reid at 775. As illustrated by the decision of the Inner
House in Berry v Berry 1991 S.L.T. 42, this was a principle of general application,
and indeed in O'Donnell v Murdoch McKenzie & Co. Limited 1967
S.C. (H.L.) 63 the House of Lords had apparently gone further in suggesting
that, in such circumstances, the court should
(irrespective of any question of onus)
draw inferences favourable to the party by whom evidence had been led. In response, counsel for the defenders urged
caution in this area, pointing out (a) that the principle bore to relate only to
evidential inferences and not, for example, to general questions of credibility
or reliability; (b) that in O'Donnell their Lordships had borne to
follow, rather than disapprove or modify, the test in Ross; and (c) that on no
view could the court be under any obligation to draw inferences where none were
justified.
In my judgment
the proper approach where one party leads no evidence must be taken to be that
stated by Lord Reid in Ross, namely
that the party concerned cannot complain if the most favourable inferences are
drawn in his opponent's favour. I am
unable to read the speeches in O'Donnell
as imposing any obligation on the court to draw such inferences, or as seeking
to depart from what was said in Ross,
and consider that in any given case the court must remain free to decide
whether inferential findings should or should not be made.
(c) Approach to evidence where witnesses not seen or heard:
Parties were in agreement that a court was not well placed to judge the
credibility or reliability of witnesses who had given evidence elsewhere. In the present case, where the late Lord
Dawson had seen and heard the witnesses in 2006, I was perhaps in a position
analogous to that of an appellate court where transcribed evidence was at large
for consideration. Intrinsic
contradictions or improbabilities could no doubt be taken into account, as
could obvious discrepancies between oral and documentary evidence. In addition, account might legitimately be
taken of the late Lord Dawson's notes, provided that parties had an opportunity
to comment on salient points. Beyond
that, there would be little or no scope for assessments of credibility or
reliability, and evidence might simply require to be taken at face value.
In approaching
this case I am satisfied, in accordance with the agreement of parties, that my
entitlement to judge the credibility and reliability of witnesses is limited
along the lines suggested.
The statutory framework
[9] So
far as relevant for present purposes the 1973 Act, as amended, provides inter alia as follows:
"6 (1) If,
after the appropriate date, an obligation to which this section applies has
subsisted for a continuous period of five years -
(a) without any relevant claim having been
made in relation to the
obligation,
...
then
as from the expiration of that period the obligation shall be extinguished. ...
(2) Schedule 1 to this Act shall have effect
for defining the obligations to which this section applies.
(3) In subsection (1) above the reference to
the appropriate date, ... in relation to an obligation (of a kind not specified
in Schedule 2) is a reference to the date when the obligation became
enforceable.
(4) In the computation of a prescriptive
period in relation to any obligation for the purposes of this section -
(a) any period during which by reason of -
...
(ii) error induced by words or conduct of the
debtor or any person
acting
on his behalf,
the
creditor was induced to refrain from making a relevant claim in relation to the
obligation ...
shall
not be reckoned as, or as part of, the prescriptive period:
Provided
that any period such as is mentioned in paragraph (a) of this subsection shall
not include any time occurring after the creditor could with reasonable
diligence have discovered the ... error ... referred to in that paragraph ...
11 (1) Subject
to subsections (2) and (3) below, any obligation (whether arising from any
enactment, or from any rule of law or from, or by reason of any breach of, a
contract or promise) to make reparation for loss, injury or damage caused by an
act, neglect or default shall be regarded for the purposes of section 6 of this
Act as having become enforceable on the date when the loss, injury or damage
occurred.
(2) Where as a result of a continuing act,
neglect or default loss, injury or damage has occurred before the cessation of
the act, neglect or default the loss, injury or damage shall be deemed for the
purposes of subsection (1) above to have occurred on the date when the act,
neglect or default ceased.
(3) In relation to a case where on the date
referred to in subsection (1) above (or, as the case may be, that subsection as
modified by subsection (2) above) the creditor was not aware, and could not
with reasonable diligence have been aware, that loss, injury or damage caused
as aforesaid had occurred, the said subsection (1) shall have effect as if for
the reference therein to that date there were substituted a reference to the
date when the creditor first became, or could with reasonable diligence have
become, so aware."
With reference to section 6(2)
above, Schedule 1 to the 1973 Act includes inter
alia the following obligations:-
"(d) ...
any obligation arising from liability (whether arising from any
enactment
or from any rule of law) to make reparation;
... and
(g) ... any obligation arising from, or by
reason of any breach of, a
contract
or promise, not being an obligation falling within any other provision of this
paragraph."
Principal issues of law
Overview:
[10] The most significant legal
issues discussed at the hearing on evidence before me concerned the proper
construction of the phrases "... loss, injury or damage caused by an act, neglect
or default" and "... loss, injury or damage caused as aforesaid" in
section 11, subsections (1) and (3) of the Act respectively. What were the factors which must concur,
and/or be known, in order to start the running of the five-year
prescription? What kind of loss or
damage, in nature, degree or location, would qualify? Could any initial incident of loss, however
minor, trigger prescription in relation to later losses which might be much
greater or different in kind, or which might flow from some different
cause? Similarly, what was the proper
scope of the references to an act, neglect or default? In particular, did these words import legal
actionability? And, if so, was the focus
of the statute directed towards the particular breach or breaches of duty on
which a claim was based, or might any relevant breach of duty suffice whether
pled or not? These and other related
questions were the subject of detailed analysis and argument before me, with
extensive citation of authority, and it will be convenient to deal with them at
this stage before turning to consider the evidence which was led at the
preliminary proof.
Extent
of agreement:
[11] Fortunately there was a measure of agreement among the parties
in this connection. In particular, they
were at one in submitting (i) that, although certain contextual differences
might be identified, the critical phrases appearing in two closely-related
subsections ought prima facie to bear
the same meaning; and (ii) that on any
fair and reasonable construction there had to be scope for successive discrete
incidents of loss or damage flowing from separate and distinct defaults to be
treated independently for prescription purposes. Claimants would suffer unfair prejudice if the
running of prescription relative to the concurrence of any initial incident of loss or damage and its correlative default were
held to extinguish all subsequent
causes of action, even though these might be unrelated and/or have emerged
after the prescriptive period expired.
[12] As I understood it, these submissions proceeded on a mutual
acceptance of several decided cases commencing with Sinclair, supra, and
ending with Musselburgh & Fisherrow Co-operative
Society Limited v Mowlem (Scotland) Limited 2004 SCLR 412. In Sinclair,
there had been four separate breaches of the defenders' contractual obligations
relative to the design and construction of a composite building. Damage to different parts of the building had
occurred at different dates many years apart.
In repelling the defenders' plea of prescription, the Lord Ordinary held
that the particular default and (1988) damage on which the pursuer now founded
were distinct and different from certain other defaults and (1972 and 1977)
damage on which the plea was based. As
he put it (at p.82K-L):
"It
seems to me that it would work considerable injustice for pursuers if a minor
failure to design and construct on the part of defenders, which had come to
light earlier, were held to be sufficient to constitute injuria in relation to a major and different failure to design and
construct which was discovered much later.
Even
if I am wrong in my approach to injuria,
the defenders still have to satisfy me that the damage which emerged in 1988 -
the damnum - was the same as or
related to that which emerged either in 1972 or 1977. ... The
damage which was discovered in 1988 ..., on the face of it, was quite different
from anything seen in 1972 or 1977. Nor,
on the evidence, have the defenders satisfied me that there was any connection
in fact between the damage discovered in 1988 with what appeared in the earlier
years."
[13] After Sinclair was
followed in Strathclyde Regional Council v
WA Fairhurst & Partners, supra, a similar approach was affirmed
by an Extra Division in Cole v Lonie 2001 S.C. 610. There the court held that awareness of the
defenders' breach of duty in connection with the installation of a kitchen
ventilation system, discovered in 1990, could not start the running of
prescription relative to later problems allegedly due to defective flat
separation works, including fire- and sound-proofing, within the same building. As the Lord Ordinary had held in Sinclair and on a proper construction of
the statutory wording, different defaults and their consequences might
legitimately call for separate prescriptive periods. However, the decision in Cole turned on what was described as "a very short point indeed",
the main issue being whether a particular clause of the original missives
between the parties fell to be construed as imposing a single composite
obligation, or alternatively separate obligations, relative to the works in
question. As a result, the court did not
require to examine any more general criteria by which the necessary degree of
distinction or difference in losses and defaults might be identified.
[14] More recently, in the Musselburgh
case, Lord Eassie in the Outer House followed the same general line,
holding that the emergence of defects in parts of a municipal swimming pool in
1993 did not start the running of prescription relative to a different defect
elsewhere in the structure which was not discovered until six years
later. Distinguishing the case of Greater Glasgow Health Board v Baxter Clark & Paul 1990 S.C. 237 (to
which reference is made below), the Lord Ordinary rejected the defenders'
argument that for the purposes of section 11(1) the emergence of any alleged defect and correlative
default would be sufficient to trigger the running of prescription relative to
all. In paragraphs [50] and [51] of his
opinion (at pp.429-430), he explained matters in inter alia this way:
"[50] ... in my judgment, although a contractual
relationship will often contain general provisions such as a general duty of
care or a general duty to construct in a workmanlike manner, for the purposes
of the running of the five-year prescription it is necessary to identify the
particular respect in which the general duty is breached and which leads to the
causing of the particular defect in question.
In Sinclair ... the Lord
Ordinary ... effectively rejected the notion that in a contract such as a
building contract breach of a general duty of workmanlike construction by
failure A causing defect A should start the time running as respects failure B
causing defect B."
[15] After referring to the Inner House decision in Cole, the Lord Ordinary went on:
"Although
on the facts in Sinclair the early
defects were in fact relatively minor by comparison with the later emerging
defect, it does not appear to me that it should be necessary that the earlier
defect be minor or indeed that relative magnitude plays a role. Accordingly, in my opinion, in a contract
such as the building contract where there may be a multiplicity of defects each
caused by a different specific failure in a general duty such as a duty of care
or workmanlike construction the proper approach for the purposes of the
quinquennial prescription is to examine each distinct defect and its correlative
failure in construction or design separately.
In so saying I recognise that in practice there may be difficulty in
determining whether defects, and the correlative failure, are truly distinct
and discrete as opposed to being a development or a further emerging example of
an existing known defect and its correlative failing. As is concluded by Johnston in his work on Prescription
and Limitation, paragraph 2.26, a pragmatic approach may be indicated.
[51] Adopting that approach it ... appears to me
that defect (iii) is discrete and distinct and is not simply a development, or
a further example, of either defect (i) or (ii). The latter are of course defects in the water
tightness of the interface between the perimeter channel and the adjacent floor
and outlet pipes respectively whereas the former is a defect in the structure
of the tank. Not only are they thus
different in location, the defects are also different respecting the nature of
the deficiency. The mechanism of failure
in the case of defect (iii), namely failure of the waterproof render by reason
of the omission of adequate expansion joints in the structures, is quite
different from the mechanisms involved in the other two defects. The defects also differ in their consequences
... In
my view the seepage defect is distinct and separate from either of the
other two defects and must therefore be considered independently."
[16] According to counsel, these were the principal Scottish cases
in which the court had had to consider the problem of separate and distinct iniuriae giving rise at different dates
to defects or damage in different parts of a composite structure. In the same general vein was the decision of
the Inner House in GA Estates Limited
v Caviapen Trustees Limited 1993
S.L.T. 1051, where an issue arising for determination was whether a claim on
one contractual warranty counted, for the purposes of interrupting
prescription, as a "relevant claim" on another.
The Extra Division held that it did not, treating the warranties as
separate and distinct although contained within the same contract, and
therefore as potentially prescribing in different circumstances and at
different times.
[17] On the foregoing basis I understood the parties to be in
general agreement that in cases where multiple distinct defects and correlative
defaults affecting a composite structure came to light at different times,
there had to be scope for construing section 11 in such a way as to permit
independent treatment, where appropriate, for prescription purposes. It was therefore important to recognise that
judicial observations in certain other decided cases were made against a
different factual background and with different issues in mind. At first sight, for example, Lord Clyde in
the Greater Glasgow Health Board case,
and subsequently in Kirk Care Housing
Association v Crerar & Partners
(28 July 1995, unreported), and the First Division in Glasper v Rodger 1996
S.L.T. 44, might appear to have affirmed a different approach, namely that for
the purposes of section 11(3) a party need only be aware that some loss or
damage had occurred, and that this was attributable to a breach of duty of some
kind. Whatever the true nature and extent
of such loss or damage, the precise character of such breach of duty, or the
identity of the party or parties responsible, the prescriptive period would then
begin to run.
[18] In the Greater Glasgow
Health Board case, where the defenders were a firm of architects, Lord
Clyde (at p.252) said:
"...
At best for the pursuers (subsection 11(3)) refers to awareness that the
loss was caused by some negligence ... I
am not persuaded that section 11(3) is still available with a view to
deferring the start of the prescription period when the creditor knows of the
loss, knows that it was caused by negligence, but does not know the identity of
the person on whom the obligation lies.
The pursuers' averments indicate an awareness not only of the loss, but
of an awareness of fault causing it insofar as they believed that the fault was
that of the contractors alone. That they
believed that their loss was due to a construction fault rather than a design
fault does not, in my view, prevent the five year period from starting to run
against them in relation to the defenders.
... Looking to the terms of section 11(1)
and section 11(3) the 'loss, injury or damage caused as aforesaid', of
which the later subsection requires an awareness, is a loss, injury or damage
'caused by an act, neglect or default' not by the particular act, neglect or
default of a particular obligant."
[19] Similarly, in delivering the opinion of the court in Glasper, the Lord President (Hope) at
p.47F-I said:
"In
our opinion the lack of awareness which requires to be established for the
purposes of section 11(3) of the 1973 Act is a lack of awareness that a
loss has occurred caused by an act, neglect or default which gives rise to an
obligation to make reparation for it. We
agree with Lord Clyde's observation in Greater
Glasgow Health Board ... 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 mosaic 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 ..., 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."
[20] Again, in the Kirk Care
Housing case, Lord Clyde after hearing a full argument adhered to his
previous views on the proper construction of section 11(3), although (at
p.11) noting the difficulty of reaching any construction which did not give
rise to some potential problem.
[21] According to counsel it was the context of these various
observations which mattered. In Greater Glasgow Health Board, Lord Clyde
was primarily concerned with an issue under section 11 (3) regarding awareness
of the identity of the party responsible, and in the absence of appropriate
averments the possibility of multiple causes of action was not considered. The main issue in Glasper was whether, and if so at what date, the pursuers were
aware that they had suffered any loss at all.
And in the Kirk Care Housing
case, where the correctness of decisions from Dunfermline District Council v
Blyth & Blyth Associates 1985 S.L.T. 345 onwards was under
direct challenge, the principal question for determination was whether a
pursuer need be aware of some actionable default (i.e. negligence) before
prescription would begin to run. Significantly,
as Lord Eassie recognised in Musselburgh case,
none of these decisions was concerned with the issue of whether separate
prescriptive periods might apply to different and discrete defects (and
correlative defaults) in a composite structure.
The observations in these cases must therefore be read and understood in
their own particular context although, in appropriate circumstances, they could
and should be read alongside Sinclair,
Cole and Musselburgh and modified accordingly.
[22] On a straightforward approach to the statutory wording of
section 11, it seems to me that the primary focus of subsection (1)
is on the occurrence and timing of relevant "loss, injury or damage", with prescription
prima facie beginning to run where
that concurs with a causative "act, neglect or default" of any kind. In my view the same may be said of
subsection (2), which provides a deemed date for the occurrence of loss,
injury and damage in certain circumstances.
Subsection (3) dealing with lack of awareness is perhaps framed
with a slightly different emphasis, but in essence none of these three
subsections bears to direct attention towards specific individual grounds of
complaint, or even to the identity of those in default. To that extent I respectfully accept and
endorse the substance of the decisions in Greater
Glasgow Health Board, Glasper and
Kirk Care Housing. I am however also persuaded, in line with
parties' submissions, that on a fair and proper construction section 11 must
throughout be held to admit the possibility of multiple independent
prescriptive periods where successive incidents of loss or damage affecting a
composite structure are different and discrete, and especially where these flow
from separate and distinct defaults. Any
other approach would, I think, be liable to cause unfair prejudice to pursuers,
and could in particular result in the extinction of legitimate causes of action
at a date before they ever came into existence.
As the House of Lords pointed out in Watson
v Fram Reinforced Concrete Co (Scotland)
Limited and Another 1960 S.C. (H.L.) 92, statutory prescription and
limitation provisions should if possible be construed so as to avoid such a
result, and in my view there is nothing in the wording of any part of
section 11 which would prevent that course from being taken here. Indeed Sinclair
and Musselburgh in the Outer House,
and Cole in the Inner House, are decisions
which confirm and illustrate the legitimacy of construing subsections (1) and
(3) in this way, and I see no reason why the approach taken in Greater Glasgow Health Board, Glasper and Kirk Care Housing should not now be open to modification, where
necessary, along the same lines.
[23] Furthermore, as it seems to me, there is nothing in other
decided cases to which I was referred such as Dunlop v McGowans 1980 SC (HL) 73, Murphy v Brentwood District Council 1991 AC 398, Stevenson v Pontifex and Wood 1887 15 R. 125 and Aberdeen Development Co v Mackie,
Ramsay and Taylor 1977 S.L.T. 177, which would oblige me to reach any
different conclusion. Dunlop was an action of damages arising
out of a single failure by solicitors to serve a notice to quit, and the
decision was merely to the effect that a defender's obligation to make
reparation in such circumstances was indivisible, arising on the initial concurrence
of damnum and iniuria, and that for any particular iniuria prescription would begin to run as soon as it began to be
productive of loss. Implicit in that
decision was the recognition (i) that, for different and distinct iniuriae there might be separate
prescriptive periods running from the date on which each gave rise to loss or
damage, but (ii) that once relevant loss and damage had flowed from a
given iniuria, so as to start the
running of prescription, there could be no question of further emerging loss
and damage being held to confer a new and separate cause of action. In Murphy,
the House of Lords were concerned with the question whether defects coming to
light in parts of a complex building fell to be regarded as pure economic loss,
for which no cause of action in tort might be available, or as physical damage
to property. In favouring the former
analysis, their Lordships dismissed the "complex structure" theory whereby, it
was suggested, each element of a structure might be regarded as distinct and
thereby susceptible to "damage" originating elsewhere. Although there was some discussion of when a
cause of action might accrue, that was again in a context where the possibility
of different prescriptive periods for different losses and correlative breaches
of duty was not in issue. Similarly, Stevenson and Aberdeen Development Co were cases illustrating the settled rule of
practice whereby all losses flowing from the same iniuria or default must be sued for in the one action. It was again implicit in these decisions that
separate iniuriae or defaults giving
rise to different losses might legitimately be the subject-matter of more than
one action.
Disputed
issues:
[24] Against that (largely
agreed) background, there were three principal areas of dispute between the
parties. In the first place, they were
at odds with regard to the criteria to be applied in determining whether losses
and correlative defaults affecting a composite structure should be regarded as
sufficiently distinct and different from one another to merit separate
treatment for the purposes of prescription.
Secondly, they were in dispute as to how far it might be open to
pursuers to aver themselves out of the five-year prescription, either by
omitting reference to particular losses and/or defaults which might be thought
problematic in that context, or alternatively by alleging additional losses
and/or defaults with the potential to create relevant distinctions or
differences. And thirdly, they differed
on the question whether, for the purposes of section 11(3), any relevant
awareness must extend to the legal actionability of an act, neglect or
default. These disputed issues are
considered in turn below.
(a) Criteria:
[25] As regards criteria, the
pursuers' primary position was that the only thing which counted was the
particular losses and (more importantly, in counsel's submission) the
particular alleged defaults on which the claim under consideration was founded. On this approach each combination of loss and
correlative default had to be examined individually to see if it was, or was
not, the same as any other. To the
extent that any difference was discernible, a separate prescriptive period was
warranted. For present purposes,
therefore, even if material damage to the roof of the general purposes hall had
emerged, and was known about, more than five years before the raising of the
present action, and even if that damage was known to have flowed from
actionable default, all of the pursuers' rights were preserved in relation to
(a) the constituents (damnum and iniuria) of any cause of action which
did not specifically relate to the general purposes hall, and (b) the
consequences of any alleged breach of duty of which they (the pursuers)
justifiably remained unaware until a date less than five years before this
action was commenced. Admittedly this
approach involved a potentially minute and unattractive fragmentation of the
pursuers' claims or rights of action, but in counsel's submission account had
to be taken of every apparent distinction or difference, however minor, if the
pursuers' legitimate interests were to be preserved.
[26] As against that, the position of the defenders was that the
best guide to the appropriate criteria was to be found in the opinion of Lord
Eassie in Musselburgh at
paragraphs [50] and [51]. The
question was thus whether successive defects and correlative defaults fell to
be regarded as truly distinct and discrete, as opposed to comprising related developments
or further emerging examples of prior defects and defaults on which
prescription had already run. In the
determination of that question the nature, location, and scale of particular
defects or incidents of damage would be relevant considerations, and the same
might be said of the nature of the default or breach of duty by which such
defects were caused. According to
counsel, however, the pursuers' approach went far beyond that, involving
fragmentation of both losses and defaults to an unacceptable degree, and it was
not appropriate to descend to that level of detail. Significantly, as was pointed out in the Greater Glasgow Health Board case, and
also in Glasper and Kirk Care Housing, the awareness
necessary to start prescription running under section 11(3) did not extend
to precise grounds of fault, or even to the identity of the responsible party
or parties. Accordingly knowledge or
belief that particular losses were, in whole or in part, attributable to
construction faults was held sufficient to start the running of prescription
against all responsible parties whether in the field of construction, design,
inspection, manufacture or supply of materials.
Pursuers would then have five years within which to identify the correct
defenders to sue and the precise grounds on which to do so. If that was the correct approach, even as
qualified, in appropriate circumstances, along the lines affirmed in Sinclair, Cole and Musselburgh,
then there could be no scope for the degree of fragmentation on which the
pursuers' argument depended.
[27] In my opinion the defenders' contentions on this issue are in
principle more persuasive, and sit more easily with the various authorities to
which reference has been made. It is one
thing for the legislation to afford relief to pursuers where emerging loss or
damage is truly distinct and discrete from what has gone before, especially if
the correlative default is also new and different, but in my view quite another
to hold that any discernible difference, however minor, must necessarily
attract separate and independent treatment for prescription purposes. Accordingly, as it seems to me, losses and
correlative defaults which are substantially the same as others on which
prescription has already run, or may reasonably be seen as related developments
or further emerging examples of the latter, will not justify separate and
independent treatment under any part of section 11 of the Act. Thus the exacerbation, progression or
extension of known problems (as for example where, over time, substantially the
same form of defect or damage, caused in substantially the same way, sequentially
affects different parts of a composite structure) will not ordinarily qualify
for relief in this context, nor will the addition of some further individual
ground of complaint to the specification of concurrent causative defaults on
which prescription has already operated.
Since (as previously noted) the primary focus of the three subsections appears
to be on the occurrence of relevant loss, injury or damage, or on a party's awareness
of it, I am inclined to think that such relief will most often come into play where
truly distinct and discrete losses are in issue. The nature of any causative default may serve
as a relevant and material consideration in determining whether successive
losses are, or are not, truly distinct and discrete, but where such losses are
substantially the same it is in my view hard to envisage circumstances in which
the later assertion of some new concurrent ground of complaint could properly
attract relief on its own.
(b) Pleadings:
[28] On the related question as
to how far a pursuer's pleadings may be thought relevant or determinative in
this field I am not prepared to hold, as a matter of principle, that
prescription can be elided by the manner in which a given case is pled. Plainly the critical issue for determination is
whether or not a particular claim or, more accurately, the correlative
obligation to make reparation has prescribed, but in my judgment omitting reference
to relevant losses and causative
defaults cannot effectively avoid whatever prescription may flow from their
existence. As was conceded in argument,
it must always be open to the court to consider relevant facts and circumstances whether or not a pursuer founds on
them as part of his claim. In the
present case, the fact that the pursuers make no claim against the defenders in
relation to the general purposes hall, where material roofing problems were
known to them by September/October 1996 and thus more than five years prior to
the raising of this action, cannot in my opinion prevent the court from
considering whether, in fact and in law, such problems should be held to affect
the running of prescription vis-เ-vis
a claim focused only on the roofing of the concourse and lairage areas.
[29] If on analysis the problems affecting these latter areas fall
to be regarded as substantially the same as, or closely connected with, those
which earlier affected the general purposes hall, or as merely related
developments or further emerging examples of the latter, then in my view the
pursuers' elective restriction of their claim cannot constitute an effective
answer to the defenders' plea of prescription.
Similarly, I do not consider that the pleading of further individual grounds
of complaint, (even criticisms which could not have related to the general
purposes hall such as, for example, the omission of movement joints), should avail
the pursuers if, on the evidence, other effective concurrent causes of roofing
failure had from the start applied across the entire Centre. In other words if, by the time the present
action was raised, prescription had already run on relevant defects concurring
with relevant defaults vis-เ-vis the roofing of the Centre as a whole, I do not
see how the operation of that prescription could be reversed by tabling some additional
ground of complaint in respect of the two areas of roof to which this action
relates. As illustrated by the decisions
in Greater Glasgow Health Board, Glasper and Kirk Care Housing, prescription founded on attribution of a given loss
to construction defects is not elided where architects are later sued in
connection with design faults, that is, where further specific grounds of complaint
and/or other defenders are later identified.
The "act, neglect or default" falling to be considered under the various
subsections is thus prima facie of a
broad and general nature, and does not involve scrutiny of individual detailed
grounds of complaint pled, or pleadable, against particular parties. However, as the cases of Sinclair, Cole and Musselburgh confirm, the nature of
correlative defaults may nevertheless relevantly assist in identifying losses
sufficiently distinct and discrete to merit separate treatment for prescription
purposes. More importantly, perhaps, it
is only relevant prior losses and
their correlative defaults that can properly be relied on in support of a plea
of prescription; prior losses and
defaults which are distinct, discrete and unrelated will fall to be left out of
account.
(c) Actionability:
[30] In the course of the debate
counsel for the defenders sought to persuade me that, in one particular
respect, leading authorities in this area were wrongly decided and should not
be followed. In particular, it was said,
the decisions in Dunfermline District
Council, Greater Glasgow Health Board,
Glasper and Kirk Care Housing were wrong in holding (albeit obiter) that for the purposes of
section 11(3) the necessary awareness had to include awareness that the
relevant act, neglect or default was actionable in the sense of comprising
negligence of some kind, or of "... giving rise to an obligation to make
reparation". In using the latter
phraseology, it was said, the Inner House in Glasper had unwarrantably inserted a qualification for which Parliament
had not provided, and had thus strayed beyond the proper boundaries of
statutory interpretation. In Inco Europe Limited v First Choice Distributors Limited 2000
I.L.L.R. 467, the House of Lords had discussed the circumstances in which it
might be open to a court to read extra words into a statute, and had limited
such an exercise to situations where the parliamentary draughtsman had patently
fallen into error and the inserted words could be seen to reflect the true
intention of the legislature:- see the
speech of Lord Nicholls of Birkenhead at p.471.
No such situation arose here, it was said, and the words "act, neglect
or default" must simply be construed according to their ordinary natural
meaning and without the inappropriate gloss which successive decisions
including Glasper had sought to
introduce. In particular the word "act"
carried no connotation of negligence at all, nor did "neglect" or "default"
clearly import actionability.
[31] In my opinion the defenders' argument here is unsound and
cannot be sustained. In the first place
I am not convinced that, where a higher court requires to construe a primary
statutory provision falling to be applied in a given case, that exercise of
construction should be characterised as obiter
and non-binding merely because the ultimate decision bears to turn on only one
aspect of the whole. The better view, as
it seems to me, is that if construction of the entire provision is a necessary
precursor to any decision relative to one or more of its component parts, then
that construction must be held to form part of the ratio of the decision. On
this basis I regard the decision of the Inner House in Glasper as binding on me in any context to which it properly
relates.
[32] Even if I were wrong about that and the "actionability"
qualification fell to be treated as obiter
in some or all of the decided cases, opinions emanating from distinguished
judges such as Lord Clyde, and from their Lordships of the First Division in Glasper, would still be highly persuasive
and deserving of the greatest weight and respect. In accordance with these opinions which were,
incidentally, followed by the Extra Division in Cole, a construction of the statutory phraseology importing
actionability has now been settled law in Scotland for nearly a quarter of a
century, and it would require strong and convincing reasons to persuade me to
hold otherwise in this case. In my
judgment no sufficient justification has been put forward in that regard, and
in particular none sufficient to convince me that Lord Clyde's reaffirmation of
his previous views in Kirk Care Housing,
after hearing full argument along very much the same lines as the defenders
have presented here, was ill-founded and should not be followed. In reaching this conclusion it seems to me that,
in the cases in question, the court was legitimately engaged in a search for
the true meaning of a phrase of uncertain scope, and of words potentially capable
of bearing more than one interpretation.
Attempting to qualify statutory language which was already clear and
unambiguous would in my view have been a different matter altogether. On that analysis, as it seems to me, the
court was not truly inserting additional words along the lines discussed in Inco, and the defenders' argument is thus
misconceived.
[33] Interestingly, in my opinion, the statutory phrase "act,
neglect or default" was not new in 1973 and had a long-established pedigree
going back some eighty years in the field of limitation. By way of example, section 6(1) of the
Law Reform (Limitation of Actions, etc.) Act 1954 used the same phrase in a
context which was authoritatively construed as denoting actionability - see the
speeches of Lords Keith of Avonholm and Denning in Watson at pp.111 and 115 respectively - and in the present context
it is perhaps also noteworthy that Parliament, when enacting amending
legislation in 1984, should have chosen to retain the phraseology of
section 11 relative to the five-year prescription while at the same time,
in section 17 of the same Act dealing with limitation, substituting the
new and much blander words "act or omission".
Furthermore, since the whole context of section 11 is to do with
obligations to make reparation, whether by reason of delict or breach of
contract, it would I think be strange if the phrase "loss, injury or damage
caused by an act, neglect or default" did not there encompass all of the
elements which would be necessary to furnish pursuers with a cause of
action. To construe the word "act", as
the defenders sought to do, as denoting no more than human intervention of some
kind would in my view fail to reflect the proper statutory context in which
that word appears.
Prima facie prescription
under section 11(1)
General summary:
[34] On the evidence led at the
preliminary proof, I am satisfied that the defenders have successfully
discharged the onus of establishing prima
facie prescription against the pursuers under section 11(1) of the
1973 Act, as amended. In my view this
conclusion is warranted by a combination of (i) evidence that every act,
neglect or default alleged by the pursuers against all or any of the defenders
occurred prior to the date when the final certificate on the original contract
for construction of the Thainstone Centre was issued in 1993; and (ii) evidence that by December 1996 at
the latest the pursuers had sustained consequent loss and damage referable, not
only to the roofing of the Centre as a whole (if appropriately treated as a unum quid), but also (if appropriately
treated as severable) to each of the three main segments individually. There was thus evidence of the necessary
concurrence of iniuria and damnum by what I shall call "the
critical dates", that is, dates five years before the present action was raised
in April and July 2002.
Iniuria:
[35] As regards iniuria, the pursuers do not offer to
prove any act, neglect or default (in contract or delict) against any of the
defenders occurring later than 1993, far less any such act, neglect or default
occurring within the five years before the action was raised. Indeed it is in my view self-evident that any
deficiencies in construction, design, inspection, manufacture or supply of
materials must de facto be referable
to dates before construction of the Centre was completed. As a general rule, however, the defaults of
contractors and others attract no legal liability until at least the date of
practical completion of the works, and more plausibly until the date on which a
final certificate is issued: see Kaye Limited v Hosier & Dickinson Limited 1972 1 W.L.R. 146, per Lord Diplock at 165; Strathclyde
Regional Council v Border Engineering
Limited 1998 S.L.T. 175. Where the
contractor's obligation is to complete stipulated works within the contract
period, and the works are still in progress, it would be unrealistic and unfair
to treat every disconformity, however short-lived, as a breach of contract
potentially sounding in damages. For
present purposes, therefore, I consider that the emergence of iniuria must be held to coincide with
the issue of the final certificate by the third defenders in 1993.
Damnum:
[36] As regards damnum, the key evidence came from
Mr Graham Nye, a well-qualified expert who inspected the roofing of the
Centre on behalf of the sheet manufacturers in 1992 and 1996. By the time of his first visit in 1992, the
use of fibre cement roof sheeting was becoming known within the industry as a
widespread and potentially serious problem, with many roofs exhibiting
premature cracking and progressive failure.
That first visit involved an entirely surreptitious examination from
ground level, of which the pursuers were not informed, whereas the next visit
in December 1996 included a disclosed high-level inspection of the roof over
the general purposes hall where water penetration was already a problem. On both occasions, as recorded in
contemporaneous memoranda the terms of which were not communicated to the
pursuers, Mr Nye found clear evidence of characteristic cracking, and by
December 1996 this was evidently progressive and serious. Mr Nye's memorandum to the roof sheeting
manufacturers dated 7 July 1992
(Production 6/18, Appendix 45) was in inter alia the following terms:
"As
you requested, I made a visit to this site when I was recently in Scotland. As a
consequence, I put in an 'Exceptional Provision' for June having witnessed the
fact that this roof is beginning to fail. ...
Cracking
has definitely started and you will see from the enclosed photos the cracks are
occuring (sic) in the usual positions
...".
[37] As Mr Nye explained in the witness box, the "exceptional
provision" recommended in that memorandum was against the possibility of legal
claims, the adjective "exceptional" being used on account of the exceptional
size of the Centre as a whole. The
problems were evident from ground level in the lairage and general purposes
hall, looking up. There were full-thickness
splits or cracks, maybe 3 inches long, in the vicinity of fixings, and
these were characteristic of the emerging generic problem of which the industry
was already aware. On the strength of
these observations, Mr Nye's concern was with the roofing of the whole
Centre, although the state of the double-skin roof over the concourse could not
be directly ascertained from ground level in the same way. In Mr Nye's opinion, the problems seen
at this time could be expected to get worse.
[38] Four years later, Mr Nye's memorandum to the sheeting manufacturers
dated 11 December 1996
(Production 6/18, Appendix 24) confirmed the complete absence of
movement joints on any part of the Centre roof, and continued inter alia as follows:
"The
area of complaint - the General Purpose Hall was originally a single skin area
towards the eaves of the concourse and forms a wing of the building ... (having)
an area of 503m2 of which 65m2 is roof light ... I counted
62 sheets as being badly cracked ... (totalling) 134m2 or 31%
approximately. ...
This
area of roof has definitely deteriorated since I last inspected some three/four
years ago. ...
I
had a good look at the remainder of the concourse area - mainly double skin
with a small area of single skin at the eaves.
This area has not deteriorated significantly but I was able to count a
total of 110 sheets that would be a cause for concern so far as cracking
is concerned.
Many
of these are located adjacent to roof penetrations and are possibly caused by
foot traffic or poor installation. ...
There
is a profusion of very minor cracking in the concourse roof which may not
deteriorate much further. What concerns
me perhaps is the long-term effect of freeze/thaw cycles on existing cracks.
For
safety reasons I only inspected the pennage areas from ground level. Although there was high animal activity
below, I was only able to spot two/three cracked sheets in these areas. ..."
Enclosed with this memorandum were
photographs showing different areas of the Centre roof with illustrations of
typical cracking.
[39] In the witness box Mr Nye explained that by 1996 the roofing
problems were no longer "minimal". More
cracked sheets were involved, and the cracks were more prominent. Cracking on the concourse was very much the
same as elsewhere, with the main damage concentrated near fixings and around
the many roof penetrations. Where cracking
was due to overtightened fixings, this reflected the fact that fibre cement
sheeting, by comparison with materials previously used, had a far greater need
for careful handling and adherence to manufacturers' recommendations.
[40] Against that background the defenders' position was that by
1992, and a fortiori by December
1996, the roof of the Centre was already in the process of failing. Physical damage in the form of cracking was
manifest in all areas inspected, and had passed beyond any stage of latency as
required by authorities such as Murphy,
supra, and Invercargill City Council v Hamlin
1996 AC 624. In addition, the extent
of the problem was plainly "more than insignificant". This was the test affirmed by the House of
Lords for the emergence of a cause of action in Homburg Houtimport BV v Agrosin
Private Limited 2004 1 AC 715, and it was noteworthy that in the same
case their Lordships had (as in Dunlop,
supra), rejected contentions to the effect that each new exacerbation of a
known problem should constitute a separate cause of action. Even in 1992, manifestations of
characteristic cracking were sufficiently serious to require "exceptional
provision"; both then and in 1996 all
areas inspected showed damage "beyond the insignificant"; and the materiality of such damage to the
larger roofing areas was by the latter date underlined by the even greater
damage (associated with water penetration) which had already developed in the
general purposes hall. Subsequent
investigations and reports, notably by architects Mr Lippe and
Mr Pirie, had confirmed Mr Nye's findings, albeit with the benefit of
hindsight, and the pursuers' claim against all defenders now proceeded on the
basis that there had been a serious and progressive failure of the roofing over
the whole of the Centre. Article 5
of the Condescendence referred to
"...
serious defects of materials, design, departure from specification and
workmanship which have led to serious and progressive failure in the roofs and
to water ingress";
and Article 8 included inter alia the following somewhat
inelegant averment:
"The
roofing sheets were not merchantable quality in that they lacked durability and
are not fit for the purposes which such roofing sheets generally are expected
to fulfil and have deteriorated at an early stage to the extent that they no
longer fulfil the function of a roof covering".
[41] In the defenders' submission all of these considerations
confirmed that by December 1996 at the latest the pursuers had suffered damnum sufficient, when taken in
conjunction with the earlier iniuria
alleged against the various defenders, to constitute a cause of action and prima facie to warrant the running of
prescription under section 11(1) of the 1973 Act. If, as the defenders maintained, the roofing
of the Centre was properly to be regarded as a unum quid, the necessary concurrence of damnum and iniuria
relative to that roofing as a whole was by then beyond dispute. Indeed, on Mr Nye's evidence, it was
clear that the roofing of the whole Centre was effectively doomed from the
start on account of inter alia the
use of sheeting inherently unfit for its intended purpose. However even if, as the pursuers contended,
each element of the roof must be considered separately and in isolation for
prescription purposes, the evidence established damnum "more than insignificant" affecting each such element (and
liable to get worse) in advance of the critical dates.
[42] For completeness I should at this point record that the
defenders (rightly, in my view) limited their contentions to the defects
identified by Mr Nye in 1992 and 1996, and did not seriously seek to rely
on certain relatively minor snagging problems with the roof of the Centre which
arose between 1989 and 1992. At this
time the construction contracts and defects liability period remained
uncompleted; the problems were localised
to flashings round smoke ventilators and other roof penetrations; their scale was not significant; they were soon resolved to the pursuers'
satisfaction; and (most importantly of
all) they were different in kind from the major defects which are in issue in
these proceedings.
[43] The pursuers' answer on the issue of damnum was that it was not appropriate to consider the roofing of
the Centre as a unum quid, and that
by a date five years before the raising of this action no defects referable to
the concourse or lairage ― the subject-matter of their claim ― were
sufficiently serious to bring prima facie
prescription into play. At that stage
the extent of the cracking in these locations was plainly on a far smaller
scale than in the general purposes hall.
No water penetration had occurred in either of these sizeable buildings,
and according to Mr Nye the cracking there might not even have been
detectable by a non-expert. The general
purposes hall, and its known problems in and after 1996, could and should be
left out of account where no claim was advanced in that regard, and in any
event where each of the three areas of roof covered what was in effect a
separate named building serving its own particular function. The three areas of roof were also different
in their construction and pitch, and eaves levels were not uniform throughout. The roof over the lairage was of single-skin,
double-pitch configuration. The roof
over the general purposes hall was originally also of single-skin construction,
but the pursuers had retro-fitted internal insulation boarding at a later
date. By contrast, the roofing of the
concourse was double-skinned from the beginning, with the external sheeting
being fixed to different structural members beneath. The only real similarities were that the
general purposes hall and adjacent concourse shared the same monopitch
configuration, and of course the external sheeting over all three areas was
identical throughout.
[44] While acknowledging the existence of certain local differences
in the roofing of the Centre, I am unable to accept the pursuers' contention
that for present purposes each area of the roof should be considered as a
separate and independent unit. For one
thing, the whole of the roof was designed and constructed, using identical sheeting
throughout, by the same parties acting under the same contracts and subject to
the same certification. Although
conveniently distinguished by name, the commercial spaces beneath were not in
the nature of separate buildings, either physically or functionally. On the evidence they were inter-connected and
complementary parts of an overall complex, and there was even a small degree of
overlap or interlocking of the roofing elements. Interestingly, even though the pursuers'
witnesses apparently set out to assert the separate and distinct nature of the
three elements of the Centre, they did not always manage to avoid references to
the Centre and its roof in the singular.
On the second day of the proof, for example, Mr Pirie referred more
than once to the "different parts of the building", and to "different parts (or
areas) of the roof". Mr Lippe's
report (Production 6/41) referred to the "roof of the new mart building,
and in particular the sale hall". Even
the pursuers' solicitor, Mr Barton, writing to the third defenders on 24 July 1997
(Production 6/18, Appendix 37), used the term "the Centre roof" to
cover areas of both single- and double- skin construction. And, as previously noted, Mr Nye in 1992
recorded that "... this roof is beginning to fail" and recommended "exceptional
provision" by reference to the Centre as a whole.
[45] Over and above that, the relative simplicity of the roof
construction appears to me to militate strongly against any realistic
differentiation of particular areas. Not
only was the external sheeting identical throughout, but (as shown in
Production 6/18, Appendix 51) it was affixed to relevant underlying
structures in exactly the same way, that is, by means of hook bolts secured
through corrugation crowns. Externally,
the adjacent general purposes hall and concourse were of parallel monopitch
configuration, and together essentially constituted the same roof. Similarly, the roofing of the general
purposes hall and lairage, as originally designed and constructed, was single skin. Taking all of these considerations into
account, I am satisfied that for present purposes the roofing of the Thainstone
Centre must realistically be regarded as a unum
quid, and that there is no warrant for treating each of the three
constituent areas separately as if it stood alone.
[46] Equally importantly, as the pursuers themselves aver in
Articles 5 and 8 of their Condescendence, the problem giving rise to the
present proceedings comprised not only progressive cracking and failure of the
external sheeting over all parts of the Centre roof, but also essentially the
same mechanism of failure throughout.
"In the final analysis", according to the pursuers' expert
Mr Pirie, the roofing defects and mode of failure were identical in all
areas, and in my view the evidence of Mr Nye and Mr Lippe points to the
same broad conclusion. Not surprisingly,
therefore, most of the pursuers' complaints on Record against the various
defenders would have applied equally well vis-เ-vis
the roof over the general purposes hall had that been included within the scope
of the present action.
[47] For these reasons, I do not consider that the pursuers' initial
roof problems affecting the general purposes hall can legitimately be described
as distinct, discrete or different from those relative to the concourse and
lairage on which their present claim is founded. On the evidence before me, the progressive
roofing defects over the concourse and lairage were substantially identical to
those which initially affected the general purposes hall, and can in my view
properly be regarded as related developments, or as further emerging examples,
of the same problem. Even a degree of
physical separation between one part of the Centre and another would not to my
mind have warranted any different conclusion.
On the strength of Mr Nye's evidence, which I accept, taken
together with the content of his two memoranda to the sheeting manufacturers, I
conclude that some months prior to the critical dates relevant and manifest defects
had begun to affect the roofing of the Thainstone Centre, taken as a unum quid. However, even if I were wrong in approaching
the matter in that way, it is clear that by the same stage such defects were
simultaneously present (albeit to differing degrees) in each of the three main
areas individually. In particular,
Mr Nye's memorandum of December 1996 confirmed the presence of a large
number of cracked sheets over the concourse as well as over the general
purposes hall, and even his limited ground-level inspection of the lairage roof
at that time showed that cracks were visibly present there too. In my judgment the extent and materiality of
these defects were plainly "more than insignificant", especially where (as
further discussed at paragraph [51] below) the pursuers themselves were
acutely aware of resultant water penetration affecting the general purposes
hall from September/October 1996 onwards, and regarded the situation as
sufficiently serious to warrant the instruction of professional investigation
and advice at that time. In all the
circumstances, I am satisfied that the pursuers must be taken to have sustained
relevant damnum by the end of 1996 at
the latest, that is, by a date more than five years prior to the commencement
of the present action against any of the compearing defenders.
Conclusion:
[48] I therefore uphold the defenders' contention that for present
purposes the necessary concurrence of damnum
and iniuria took place well in
advance of any of the critical dates.
Accordingly, in my opinion, the requirements of section 11(1) of
the 1973 Act have been made out, and any obligation on the various defenders to
make reparation to the pursuers has prima
facie been extinguished by operation of law. However, even in that situation, the validity
of the pursuers' claim may be preserved by recourse to either or both of the
saving exceptions which appear in sections 11(3) and 6(4) of the
Act. In these respects the onus of proof admittedly falls on the
pursuers, and the question is therefore whether, on a consideration of the
evidence as a whole, that onus has
been satisfactorily discharged. To
attract relief under section 11(3) the pursuers must prove justifiable
ignorance of the concurrence of relevant damnum
with causative iniuria so as to delay
commencement of any prescriptive period until a date less than five years
before the raising of the present action.
For the purposes of section 6(4), on the other hand, it would be
necessary for the pursuers to establish that, for some sufficient period of time,
they were induced to refrain from taking appropriate action by error
attributable to the words or conduct of a particular defender. Here the pursuers' claim is that relevant
error on their part did result in appropriate action being delayed, and that such
error was induced by words or conduct of the third defenders.
Lack of awareness for the purposes of section 11(3)
General:
[49] For the reasons set out earlier
in this opinion, I do not consider that the pursuers can legitimately establish
the necessary lack of awareness of relevant damnum
and/or iniuria by seeking to fragment
the roofing of the Centre into supposedly unconnected parts. On the contrary, I am satisfied that the
roofing of the Centre as a whole falls to be regarded as a unum quid, and that for present purposes the areas of roofing over
the general purposes hall, on the one hand, and over the concourse and lairage,
on the other, cannot properly be treated as if they were distinct and
severable. Thus awareness of relevant damnum and iniuria affecting any material element of the Centre roof, such as the
general purposes hall, must in my opinion be habile to trigger prescription
referable, not just to that element in isolation, but to the Centre roof in its
entirety. Against that background, the
key issue is whether the pursuers have succeeded in proving that by the
critical dates they remained unaware, and could not with reasonable diligence
have become aware, of the concurrence of relevant damnum and iniuria
affecting any material element of the Centre roof.
Awareness
of damnum:
[50] Despite their own
ill-considered averments at p.49 of the Closed Record, which are denied by all
compearing defenders, there is no evidence that the pursuers themselves were de facto aware of any relevant problem
with the roofing over the concourse or lairage until dates well within the
critical five year period. Their lack of
such awareness, and in that context the complete absence of water penetration
in these areas, were repeatedly affirmed in the witness box by Messrs Pack
and Gregor, and I can see no basis for doubting or rejecting these witnesses'
evidence in this regard. Since the roof
over the concourse was of double-skin construction, the condition of the
external sheeting was not visible from below, and there was no evidence of
roof-level inspections having been carried out by the pursuers at any relevant time. No doubt the lairage roof comprised only a
single skin, but even there the expert Mr Nye in December 1996
noticed only two or three material cracks over an enormous area extending to
thousands of square metres. In addition,
Mr Nye accepted that lay people might miss what, with his training and
experience, he had known to look out for.
The pursuers did not of course have sight of either of Mr Nye's
memoranda of 1992 and 1996 until after the present action was in court. Furthermore, as discussed below, the Eternit
communications of March 1997, and the third defenders' advice thereon,
were focused on the general purposes hall alone; and even Mr Lippe's initial report of
August 1997, advising on the problem affecting the general purposes hall,
said little or nothing about cracking or other roof defects elsewhere.
[51] By the latter part of 1996, however, the pursuers were only too
well aware of developing problems, including serious water penetration,
affecting the roof over the general purposes hall, and in my judgement that
awareness is by itself sufficient to bring section 11(3) into play on the
issue of damnum. If, as I have held, the Centre roof must for
present purposes be regarded as a unum
quid, then manifest defects or damage referable to any material part of
that roof must be equiparated with material defects or damage referable to the
whole. In other words, even accepting
that the pursuers had no knowledge of specific roofing problems over the
concourse and lairage respectively, I do not consider that such localised lack
of awareness can avail them where they undoubtedly knew, with effect from
September/October 1996, that there was something far wrong with the roof
over the general purposes hall. Again applying the tests affirmed in Sinclair, Cole and Musselburgh, the
known roofing defects over the general purposes hall - a material part of the
Centre as a whole - cannot in my opinion be regarded as distinct, discrete or
different from the defects elsewhere which form the subject matter of the
present action, and thus cannot be left out of account for present purposes. On the evidence, the pursuers took the
situation seriously enough from late 1996 onwards to instruct the third
defenders to investigate and report back on the nature and cause of problems
which they did not consider should be their own responsibility. Even if the pursuers did not then know the
precise mechanism by which the roof over the general purposes hall was failing,
what matters for present purposes is that they were well aware (i) that
problems existed, and (ii) that they were serious enough to affect their
business and to call for expert investigation and advice. They themselves did not regard such problems
as de minimis or negligible, and in
my judgment the threshold of "more than insignificant" was plainly crossed.
Awareness
of damnum: reasonable diligence:
[52] In the foregoing
circumstances, it is strictly unnecessary for me to consider whether, with
reasonable diligence, the pursuers could by the critical dates also have become
aware of damnum relative to the
roofing over the concourse and lairage respectively. However, in case this matter may go further, I
should indicate that, had it been necessary for me to do so, I would have
decided this question in the pursuers' favour.
As I understood it, their position was (a) that the appropriate
test for reasonable diligence was that of the ordinary prudent building owner
having regard to all circumstances: Glasper, supra, per the Lord President (Hope) at p.48; (b) that there was no evidence to
suggest that an ordinary prudent building owner would have troubled to instruct
or carry out specialist inspection of a relatively new roof prior to the stage
at which material problems such as water penetration began to emerge; (c) that British Standard 5427 recommending
annual inspection of all roofs was not directly addressed to building owners,
and could not be taken as setting a universal standard; (d) that, in the period of months
between the emergence of water penetration in the general purposes hall and the
critical dates, the pursuers continued to act reasonably in instructing the
third defenders to investigate and report back on the nature and cause of what
seemed to be a localised problem; and
(e) that the absence of any worthwhile information or advice from the third
defenders, or from any other quarter, by the critical dates could not fairly be
laid at the pursuers' door.
[53] The defenders, by contrast, stressed not only the lengthy
period, measured in years, for which the roofing of the Centre had not been
inspected by the pursuers, or by anyone on their behalf, but also (and more
pointedly) the period of several months during which the concourse and lairage
roofs were still not inspected by or on behalf of the pursuers after roofing
problems had emerged over the general purposes hall. If Mr Nye had been able to identify
material cracking of roof sheeting in all areas in December 1996, and if
Mr Lippe (as he acknowledged in evidence) had also been able to identify some
degree of cracking (however minor) in the concourse roof by late 1997,
then it was reasonable to infer that an appropriate expert instructed by the
pursuers could have identified the same thing prior to the critical dates.
[54] In my judgment, however, the defenders' argument here sets too
high a standard to be achieved by the pursuers as ordinary prudent building
owners in advance of the critical dates.
In the first place, as regards the period before water penetration
problems began to affect the general purposes hall in September 1996, I do
not accept that an ordinary prudent building owner would have caused a
relatively new roof to be inspected, annually or otherwise, to the specialist
standard necessary to pick up asymptomatic cracking of the kind which caused
concern to Mr Nye from 1992 onwards. In this context I do not accept that, in the
absence of specific advice from the third defenders, the pursuers could
reasonably have been expected to know of, far less to follow, the
recommendations contained in British Standard 5427. More importantly, in the second place, as
regards the period after September/October 1996, I am not prepared to hold
that the pursuers acted unreasonably, or departed from the standard of the
ordinary prudent building owner, in placing matters in the hands of the third
defenders for investigation and advice within a reasonable timescale. By the critical dates all apparent problems
were still localised to the small area of roof over the general purposes hall
and were perceived as "snagging" items;
to some extent these had been alleviated by temporary crack sealant work
carried out by the pursuers themselves;
the next winter was some months away;
there was no sign of equivalent water penetration affecting any other
part of the Centre roof, notwithstanding the enormous areas involved; and in the whole circumstances (agreeing with
Mr Pirie) I do not think that the pursuers can fairly be criticised for
not losing patience with the third defenders, and obtaining independent advice,
before the critical dates, or a fortiori
early enough in advance of the critical dates to enable such advice to be
timeously obtained and digested. The
running of their own business would no doubt have been the pursuers' primary
concern and preoccupation over the relevant period, and while the roof problems
appeared so localised it does not seem to me that these merited greater
attention than they in fact received.
[55] An important factor here, in my view, is the third defenders'
conduct at the material time. Having
been asked, as experts, to investigate and advise on the nature and cause of
the developing problem with the roof of the general purposes hall, they allowed
many months to pass without giving the pursuers any sensible response. As late as 8 July 1997 (Production 6/18,
Appendix 34) they offered the highly questionable advice that none of the
companies involved in the roof cladding had any legal or contractual obligation
to take any action, and that the pursuers should therefore face up to paying some
or all of the remedial costs themselves.
The unstated further implication was that none of the professionals or
contractors involved bore any responsibility either. Neither in that letter, nor in their subsequent
letter of 17 July 1997
(Production 6/18, Appendix 35) did the third defenders specifically
indicate the existence of any problem with the roofing of the concourse or
lairage.
[56] With these considerations in mind, it seems to me that certain
conclusions can legitimately be drawn in the pursuers' favour. If, as the experts charged since
late 1996 with investigating and ascertaining the nature and cause of the
pursuers' roofing problems, the third defenders genuinely did not know what was
wrong with the roof over the general purposes hall, and a fortiori if they did not appreciate that similar roofing defects
were also manifest over the concourse and lairage, then I do not see why the
pursuers themselves, as lay clients, should have such awareness imputed to them
in advance of the critical dates. Conversely,
if the third defenders were aware of the true nature of the problem, and in
particular of the existence of defects over the concourse and lairage as well
as over the general purposes hall, but failed to share this knowledge with the
pursuers, then again I do not see why any such knowledge should be imputed to
the pursuers at that time. Having led no
evidence on such matters the defenders, and the third defenders in particular,
cannot in my view complain if the most favourable inferences as to state of
awareness are, for present purposes, drawn in the pursuers' favour. Admittedly, in their letter of 17 July 1997,
the third defenders purported to blame the pursuers for late disclosure of
roofing problems extending more widely than had previously been thought, but in
the absence of evidence from the author of that letter I am not prepared to
disbelieve Mr Pack's contrary account, and in particular his denial of
having furnished the third defenders with details of problems more widespread
than the general purposes hall at any time.
[57] Accordingly, had it been necessary for me to reach a decision
on this matter, I would have declined to hold that, with reasonable diligence,
the pursuers could and should have become aware prior to the critical dates
that they had suffered loss and damage, not only in relation to the general
purposes hall but also in relation to the adjacent concourse and lairage.
Awareness
of iniuria:
[58] I now turn to the related
issue regarding the pursuers' awareness of iniuria
for the purposes of section 11(3) of the Act. As affirmed in Dunfermline District Council, Greater Glasgow Health Board, Glasper
and Kirk Care Housing, the question
is in my view whether the pursuers were by the critical dates aware, or could
with reasonable diligence have become aware, that relevant loss and damage
known to them was actionable, in the sense that a stateable prima facie claim in negligence could
properly be advanced against someone.
Certainty or even probability of success in any such claim would not, I
think, be required. In this connection
the evidence was conflicting and, in places, difficult to evaluate without having
had the advantage of seeing or hearing any of the witnesses. On the one hand there were apparent
concessions under cross-examination, by Mr Pack in particular, to the
general effect (i) that by the critical dates the pursuers realised that a
properly designed and constructed roof would not be failing after only a few
years, and (ii) that by then they knew that the cause of the problem had to be
some fault in design, construction or materials. In cross-examination, moreover, Mr Gregor
struggled to identify any other possible cause, and the pursuers' expert
Mr Pirie at one point appeared to accept that as early as March 1997 the
pursuers were "considering a possible claim".
In these circumstances it was the defenders' contention that the
pursuers had or, with reasonable diligence, should have had all the knowledge
required to start the running of prescription in advance of the critical dates,
and had failed to discharge the onus
of showing otherwise. On any view, it
was submitted, the pursuers had or should have had the necessary knowledge by a
date more than five years before this action was commenced against the fourth
defenders on 25 July 2002.
[59] By contrast the pursuers' position was that these apparent
concessions by Messrs Pack and others could not fairly be accorded much
weight. In Mr Pack's case they had
been materially qualified or departed from, especially in re-examination; Mr Gregor had said very little in the
first place; and ultimately the evidence
in question concerned no more than the theoretical possibility of a legal claim
being available. By the critical dates
the pursuers did not in fact know that any such claim was open to them nor,
with reasonable diligence, could they timeously have acquired such knowledge. They did not even know what was wrong with the
roof.
[60] Perhaps the best indication of the pursuers' contemporaneous
state of mind was to be found in what they actually did during the crucial
months from September/October 1996 onwards, and what information and
advice they actually received from the third defenders and others over that
period. The pursuers' actings at this
point, it was said, were clearly inconsistent with their having had the
requisite degree of awareness for prescription purposes. As ordinary prudent building owners they
asked the third defenders, as experts, to investigate and report back on the
nature and cause of the problems which were evident in the roofing of the
general purposes hall. As previously
noted, the third defenders furnished them with no sensible response prior to
the critical dates, and by letter dated 8 July
1997 purported to advise that none of the companies involved in the
roof cladding (and by implication no-one else) had any legal or contractual
obligation to take any action. Not
surprisingly the pursuers were sceptical of the correctness of this advice, as
indeed they had been sceptical of suggestions by Eternit, the sheeting
manufacturers, in March 1997 to the effect that excess foot traffic and/or
condensation might realistically account for the problems experienced over the
general purposes hall. Nevertheless,
such scepticism was not to be equated with the degree of awareness necessary
for prescription purposes, namely actual knowledge or at least a well-founded
belief that a claim in negligence could stateably be directed against some
responsible party.
[61] Section 11(3) of the Act was not in terms concerned with
the mere possibility of a claim being available. As explained by the Lord President
(Hope) in Glasper, at p.47F-G,
"...
the lack of awareness which requires to be established ... is a lack of
awareness that a loss has occurred caused by an act, neglect or default which
gives rise to an obligation to make reparation for it. We agree with Lord Clyde's observation
in Greater Glasgow Health Board ...
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."
With these considerations in mind,
it was said, the evidence showed that the pursuers' state of knowledge prior to
the critical dates fell short of what would have been required to start the
running of prescription. At its highest,
the pursuers had some notion that a third party claim might possibly be open to
them in due course, but they did not in fact know that their loss and damage
was "... caused (by an act, neglect or default)"
as section 11(3) required.
[62] In my opinion there is considerable force in the pursuers'
contentions on this aspect of the case.
On the evidence referable to the crucial period between September/October 1996
and the critical dates, it can in my view reasonably be concluded (i) that
the pursuers were still waiting to be told the nature of the roofing problems
over the general purposes hall; (ii)
that they did not then know that these were caused by negligence; and (iii) that even with reasonable
diligence they could not timeously have acquired such knowledge. Perhaps the pursuers' position would have appeared
stronger if they had passively accepted the assertions and advice tendered to
them by Eternit and the third defenders in March and July of 1997. In my view, however, their sceptical reaction
to certain assertions and advice, coupled with insistence that the problem
should be treated as a long-delayed snagging matter, cannot properly be equated
with the degree of awareness which the statute requires. Without the benefit of legal advice at that
stage, and without knowing what was actually wrong with the roof, the pursuers
were I think merely striking a commercial attitude in maintaining that others
must rectify the situation on their behalf notwithstanding the fact that any contractual
defects liability period had long since expired. Looking fairly at the evidence as a whole, I
am satisfied that by the critical dates the pursuers truly had no idea whether
any legal responsibility might be enforceable at their instance, and could only
speculate as to the possible cause or causes of their problem. The fact that on 8 and 17 July
1997 ― less than five years before the present action was raised
against the first three defenders, and barely more than five years before the
fourth defenders were convened ― the third defenders' written advice
was essentially to the effect that no-one carried legal responsibility is to my
mind a powerful factor tending to support and underline the lack of awareness
which the pursuers seek to prove.
Indeed, as illustrated by the following paragraph from their letter of 17 July 1997, the third defenders
went even further in suggesting that investigation of any possible third party
redress would be a difficult and expensive exercise:
"As
previously stated, the Defects Liability Period for the project has long since
expired but this would not prevent redress under normal 'fitness for purpose'
trade law if such a situation were to be proven. The eventual determination of such a matter
would be a legal issue but we would be happy to undertake preliminary work to
establish whether or not a case for such action exists and to instruct an
independent investigation of the roof structure to be undertaken. The cost of this work by a Specialist
Consultant would be in the region of ฃ2,000 and our charges would be on an
hourly rate of ฃ55 per hour."
[63] Significantly, when the pursuers' solicitor Mr Barton (now
deceased) wrote to the third defenders on 24 July 1997 (Production 6/18,
Appendix 37), he did not appear to know on what basis, or against whom,
any legal liability might ultimately be asserted. At that time, "... in order that we may form a
view as to how best to deal with this unfortunate situation", he asked for inter alia details of (i) the contractor
or sub-contractor who might be responsible for "any current defects" in the
construction of the roof; (ii) the
parties responsible for specifying and checking the conformity and installation
of the roofing materials; (iii) the
manufacturers' fixing instructions and relative contractors' undertakings; and (iv) the parties responsible for roof
design. He went on to ask who might be
responsible if there had been "... some latent or other defect in the manufacture
of the roofing material", and queried the possibility that old stock might have
been used. "Being realistic", the final
paragraph began, "... I suspect that this matter is going to take some
considerable time to be resolved ...". In
my judgment this letter, written only 24 hours before the last of the
critical dates, tends to confirm the pursuers' lack of any real understanding
as to what was wrong with the roof. Even
if the possibility of a claim was, by this late stage, beginning to be considered,
as a contemporaneous memorandum suggested, Mr Barton's approach to the
third defenders was still of a wide-ranging exploratory nature. At most, according to Mr Pack, the
pursuers only thought that they might
have a claim against somebody, and in my view that could not call for more
extensive action by way of reasonable diligence than the pursuers then actually
took, namely instructing an independent expert appraisal from someone like
Mr Lippe.
[64] Even Mr Lippe's first report to the pursuers in the course
of the following month (August 1997) did not in my view clothe them with the
degree of awareness required for the purposes of section 11(3). In particular, Mr Lippe was at that time
unable to form a concluded view as to the cause of the cracking on the roof over
the general purposes hall. His
investigations were ongoing and uncompleted over the autumn of 1997, and the
pursuers' lack of awareness of the true nature and cause of their roofing
problems therefore persisted well into the five-year period immediately
preceding the commencement of this action against all compearing defenders.
[65] In cross-examination for the fourth defenders on Day 3 of
the proof, the pursuers' expert Mr Pirie bore to agree with the
proposition that by March 1997 his clients would have known "... that a roof
properly designed, properly constructed and ... fully maintained should not let
in rain", thereby confirming failure in maintenance, for which responsibility
might lie with the pursuers themselves, as one of the possible causes in view at
that time. According to Mr Pirie
vandalism, chemical reactions, wind loading and ultra-violet light were also
among the possible causes of which building owners such as the pursuers would
then have been aware. As already noted,
Mr Barton in his letter of 24 July 1997 raised latent defect and the
possible use of old stock as additional matters of concern, and the evidence in
this context also included reference to extreme weather conditions and to
thermal forces including the build-up of heat from the insulation boarding
retro-fitted by the pursuers in the general purposes hall. By the critical dates, therefore, there might
be figured a number of possible explanations for the pursuers' roofing problems
which would not necessarily involve third party negligence, breach of duty or
breach of contract.
[66] Significantly, Mr Pirie throughout his evidence insisted
that the pursuers had no means of knowing the precise nature of the problem
with the roofing over the general purposes hall, or (in consequence) of
attributing it to culpable failure of any kind.
In his opinion it was entirely appropriate for the pursuers to have
placed the matter in the hands of the third defenders as project architects for
investigation and advice, and there was nothing more that ordinary prudent
building owners could reasonably have been expected to do. Further, in his opinion, the pursuers were as
late as 24 July 1997 "... still seeking advice without response", and in
that regard he was critical of the third defenders for failing to carry out any
proper investigation or to tender the advice for which the pursuers were
legitimately waiting. No evidence was of
course led on behalf of any of the defenders, nor did they develop any
substantive contrary position here in cross-examination, and for the reasons
already discussed at paragraph [54] above I can see no good reason to doubt
or reject Mr Pirie's evidence on these important issues.
[67] Against that background it seems to me that the apparent
admissions by Mr Pack and others in cross-examination must be approached
with great caution. Messrs Pack and
Gregor in particular were non-experts, as regards both roofing and the law, and
their evidence was given at a time when they carried the burden of several
years' hindsight which must inevitably have affected the tenor of their responses
to some degree. Having regard to the
evidence as a whole, including inter alia
the written advice which the pursuers were actually receiving from the third
defenders as late as July 1997 and, perhaps consequentially, the lack of
any legal advice available to the pursuers until an even later stage, I am not
persuaded that I should attach determinative weight to the apparent concessions
as the defenders invited me to do. On
the contrary, having read and re-read the relevant passages of evidence, I have
reached the conclusion that they do not go far enough to outweigh the
significance of what the pursuers were actually doing, prior to and even beyond
the critical dates, to ascertain the true nature and cause of the roofing
problems over the general purposes hall.
[68] It is true that in the course of his evidence-in-chief
Mr Pack observed (with reference to the third defenders' letter of 8 July 1997) that "... it was
obvious a breach had taken place". He
also volunteered that the first suggestion of any third party breach of
contract or breach of duty came in that month.
However the factual basis for such observations was far from clear, and
they were made in direct conjunction with assertions that the pursuers had not
then actually formed an opinion, and that they "... had to look much further at
what the issues were". They "... still had
no advice" on such matters. In
cross-examination, Mr Pack's formulation of the pursuers' state of
awareness by March 1997 was that "... somebody or something" was responsible, and
although he went on to agree that "responsibility" might, as a matter of
terminology, be equated with "blame" his stated complaint was still that, even
four months later, the pursuers had received only a re-roofing solution but no
explanation of the underlying cause from anyone. In re-examination, early on Day 2 of the
proof, Mr Pack's position was consolidated and re-affirmed in the
following significant passage of evidence:
- "Now
in the course of ... cross-examination it was suggested to you, I think, that
the, or a suggestion was made to the effect that because the roof, ehm, on the
general purposes hall failed earlier than you expected that that failure must
be caused by a culpable failure on someone's part ... - Yes.
- ...
before being asked ... - Yes.
- ...
it was suggested to you it was that effect, at least? And I'd just like to examine your view about
that, ehm, matter in a little more, ehm, detail. First of all, between September 1996 and July
1997, ehm, did you or ANM have any information which indicated that the roof
problem of the general purposes hall was caused by a breach of contract or
breach of duty on someone's part? - No, definitely not.
- ...
see, I want to reflect that, I'd like to ask, perhaps, did the simple fact of
the existence of the problem in the general purposes hall mean that there must
have been a breach of duty or contract by somebody? - We had, we had no, no
notion of that, I mean we were simply trying to get a solution to our problem,
we had water ingress and we wanted a solution.
- Well
perhaps I can ask you in this way, ehm, did the mere fact of there being a
problem of itself mean that there was a breach of duty or breach of contract by
somebody? - No.
- Now
in the course of your answers, I think a formulation you adopted and agreed to
some extent with my learned friend was that you knew something or someone was
to blame. Now, I ought to ask you why
you said, ehm, the word 'something' in distinction to 'someone'; what did you have in mind? - We knew we had a
problem, ehm, we didn't know the nature of the problem, which is why we had
asked our advisors to look into it along with the contractors to give us an
answer, so we didn't know whether the, whether there was some issue about the
design, or some issue about the material or whatever, ehm, whether it was just
badly fixed or whether it was because ... we had no idea, we were asking them to
come up with a solution to the problem.
- Did
you have any idea if anyone was to blame? - No."
[69] If Mr Pack's evidence is read fairly and as a whole, I do not
consider that it lends support to the defenders' contentions. In broad terms his position all along was
that, even as late as July 1997, the pursuers were in ignorance as to the cause
of the problem and were still legitimately awaiting a considered response from
the third defenders. On the strength of such
evidence, the pursuers were not by the critical dates aware that progressive
failure of the roof sheeting was under way, nor that the specified sheeting was
inherently unfit for its purpose, nor that culpable failure could be identified
on anyone's part. In their proper
context, therefore, the apparent concessions on which the defenders founded
cannot in my view be taken as referable to anything more than theoretical
possibilities which might, or might not, turn out to have any substance. In particular, as it seems to me, the pursuers'
contemporaneous actings prior to the critical dates, coupled with the third
defenders' failure to furnish them with any worthwhile advice, must carry much
greater weight than the apparent admissions in question. The same approach would I think have been appropriate
had the position been reversed, with clear evidence of contemporaneous awareness
being likely to outweigh apparent denials in the witness box.
[70] In my judgment Mr Gregor's evidence was even less
favourable to the defenders. He
repeatedly emphasised how the pursuers had received no advice from the third
defenders regarding the nature, cause or scope of the problem, or of the
possibility of breach of duty or breach of contract on anyone's part. Despite water-damage complaints from
tenants/stallholders the possibility of a claim by the pursuers against any
third party was not then in mind, as evidenced by their decision to leave
matters in the hands of the third defenders as expert advisors. In Mr Gregor's terms the pursuers had
"imagined" that a snagging issue was involved, or "treated" the problem as a
matter of delayed snagging, but the true causes remained unclear. Their real concern was to get the leaks
sorted. In cross-examination, he agreed
in general terms that sheets should not be cracked or leaking only six years
after they were put on the roof.
However, when then asked whether, to the pursuers' knowledge, roof
sheets properly designed, manufactured and erected did not leak after six
years, he replied "We weren't expecting that, of course", and the line of
questioning was not pursued with him any further. Significantly the apparent concession which
followed, to the effect that the pursuers could think of no other relevant
explanation, seemed to be focused on weather conditions such as snowfalls and
storms, and was in any event inconsistent with the other evidence summarised in
this and the preceding paragraphs.
[71] Another line pursued with Mr Gregor in the course of his
evidence concerned receipt of the third defenders' letter of 27 November 1996 (Production 6/18,
Appendix 23). That letter gave
notice of an impending inspection by the sheet manufacturers Eternit, and inter alia contained the remark "... the
buck has got to stop with them!"
According to the defenders this should be read as confirming the
existence of a claim open to the pursuers, even at that early stage, but in my
view the remark does not obviously bear a meaning which (for the reasons
already given) would have been contradicted and outweighed by subsequent events
in the period up to and beyond the critical dates. In its context, it might have been no more
than an expression of hope. With that in
mind, and in the absence of evidence from the author of the letter, I see no
reason to doubt the credibility of Mr Gregor's response to the effect that
he did not then understand the remark as a reference to culpable failure at
all. On the contrary, to him it merely reflected
his wish that someone from within the contractual chain would provide a practical
solution. After all, the manufacturers
were only coming to investigate the situation at that stage.
[72] If by April 1997 the third defenders, or the sheeting manufacturers
or suppliers for that matter, had acknowledged to the pursuers (even in general
terms) that there was a real problem with the specification and/or installation
of the external roof sheeting, then in my opinion that would have been enough
to put the pursuers on inquiry, and perhaps even to saddle them with the
requisite degree of awareness regarding iniuria
for the purposes of section 11(3) of the Act. However, notwithstanding Mr Nye's
memoranda which made it abundantly clear what the real problem was, no such
acknowledgement was forthcoming and the pursuers were essentially left in the
dark until, on their own initiative, they sought independent advice from about the
end of July 1997.
Conclusion:
[73] In all the circumstances,
therefore, I conclude in the pursuers' favour that by the critical dates they
were not aware, and could not with reasonable diligence have been aware, that
the known problems with the roofing of the Centre were "... caused (by an act, neglect or default)" for the
purposes of section 11(3) of the Act.
Specifically they had not then progressed beyond surmising, as a mere
possibility, that the roof problems might be attributed to culpable third party
failure sufficient to give them a prima
facie cause of action. So far as
reasonable diligence is concerned, it seems to me that the pursuers acted
reasonably and responsibly in putting matters in the hands of the third
defenders for investigation and advice in due course, and I do not accept that
they can now fairly be blamed for not having obtained independent advice
elsewhere before the end of July 1997 or, a
fortiori, before the beginning of April in that year. In this connection I am not impressed with
evidence taken from Mr Pirie and others, in general terms and without
reference to specific matters, to the effect that the pursuers' state of
awareness was no further advanced in July 1997 than it had been in the
preceding March. As I see it, these
witnesses were liable to have understood counsel's questions as referring to
the absence of sensible advice from the third defenders over that period, and I
do not think that the answers can fairly be relied on as confirming awareness by
March 1997 of information and advice which did not even begin to emerge until
some four or five months later.
[74] On these grounds I am satisfied that all of the defenders'
respective pleas of prescription must now be repelled. As it seems to me, the fourth defenders are
in no stronger position here than the second and third defenders despite the
later commencement of this action against them.
In particular, for the reasons already given, I do not consider that any
significant development occurred between early April and late July 1997 which
could have started prescription running, in a question with the fourth
defenders, at a date more than five years before they were convened.
Induced error for the purposes of section 6(4)
[75] Along similar lines, I have
reached the conclusion that the pursuers' belief by the critical dates that the
nature, cause and scope of their roofing problems were truly uncertain, and
could not readily be ascertained, may fairly be treated as an "error" on their
part, and that such error was in large measure induced by the conduct of the
third defenders in allowing months to pass without either furnishing the pursuers with any sensible response to their
requests for expert investigation and advice or, failing that, advising the pursuers that they must seek expert
assistance elsewhere. For this purpose
it is not necessary for me to hold that the third defenders deliberately
intended to maintain the pursuers' erroneous understanding over the relevant
period, or in their letter of 8 July 1997 to instil the belief that none
of the companies involved in the roof cladding had a legal or contractual
obligation to take any action, or in their letter of 17 July 1997 to convey
the impression that investigating the possibility of a product liability claim
would be a difficult and expensive exercise. Indeed I do not do so. Neither intention nor motive is in my view a
necessary component of "inducement" for the purposes of section 6(4) of
the Act, the question being merely whether, objectively speaking, any relevant
error was caused or materially contributed to by the words or conduct of the
defender concerned: see BP Exploration Operating Co Ltd, per Lord Millett at para.[104].
[76] Again, in my view, the pursuers' position might have appeared
stronger if in 1997 they had passively accepted such advice as was tendered to
them, however inadequate or misleading, but as before I am not persuaded that
their sceptical reaction on certain issues went far enough to dispel any notion
of error on their part, or otherwise to disqualify them from relief under
section 6(4). In this context I do
not think that it matters whether the third defenders knew, or did not know,
the true extent and cause of the roofing defects at the Centre, or the identity
of responsible or potentially responsible parties. The point is simply that, by reason of these
defenders' conduct over a period of many months, the pursuers were induced not
to take independent steps which might have (a) revealed the true position, (b) enabled
them to contemplate legal action, and incidentally (c) satisfied the
requirements of section 11(3) so as to start the running of the five-year
prescription.
[77] In challenging all of this, the third defenders maintained that
the pursuers had never been in error within the meaning of section 6(4), that
they themselves had done nothing to induce any such error, and that such advice
as they tendered had not in fact been accepted.
For the reasons given, however, I regard these contentions as too
narrowly focused, and consider that the third defenders' prolonged inaction in
the face of a legitimate expectation of expert advice and assistance, coupled
with the terms of their letters of 8 and 17 July 1997, were significant
factors which caused or materially contributed to the pursuers' delay in taking
appropriate steps to protect their own interests. One way or another, I do not think that it
lies in the mouth of the third defenders to blame the pursuers for the
inadequate state of their knowledge prior to the critical dates, and in my opinion
the issue of reasonable diligence arising under section 6(4) must again be
resolved in the pursuers' favour along familiar lines.
[78] In all the circumstances I consider that the pursuers' claim to
relief under section 6(4) is well-founded, and that, in a question with
the third defenders, this is a further reason why the claim advanced in the
present action has not prescribed.
Disposal
[79] On the whole matter I shall
repel the sixth plea-in-law for the second defenders, the first plea-in-law for
the third defenders and the first and second pleas-in-law for the fourth
defenders, and allow a proof before answer.
