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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> W M MORRISON SUPERMARKETS PLC AGAINST (FIRST) LEM ESTATES LTD (IN LIQUIDATION) and KEITH ANDERSON, the liquidator thereof; (SECOND) STRUER CONSULTING ENGINEERS LTD; (THIRD) MUIR CONSTRUCTION LTD [2020] ScotCS CSOH_31 (11 March 2020)
URL: http://www.bailii.org/scot/cases/ScotCS/2020/2020_CSOH_31.html
Cite as: 2020 GWD 12-172, [2020] CSOH 31, [2020] ScotCS CSOH_31, [2020] PNLR 16
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Page 1 ⇓
OUTER HOUSE, COURT OF SESSION
[2020] CSOH 31
CA52/19
OPINION OF LORD DOHERTY
in the cause
W M MORRISON SUPERMARKETS PLC
Pursuer
against
(FIRST) LEM ESTATES LIMITED (IN LIQUIDATION) and KEITH ANDERSON, the
liquidator thereof; (SECOND) STRUER CONSULTING ENGINEERS LIMITED; (THIRD)
MUIR CONSTRUCTION LIMITED
Defender
Pursuer: Young; MacRoberts LLP
Second Defender: Morton (solicitor advocate); BTO Solicitors LLP
Third Defender: Jones QC (solicitor advocate); Brodies LLP
11 March 2020
Introduction
[1] The pursuer is a supermarket operator. It is the tenant of a supermarket at 295-301
Gallowgate, Glasgow. In 2010 the first defender was a developer. In July 2010 the pursuer
and the first defender entered into an Agreement for Lease in terms of which the first
defender agreed to develop a supermarket at that address and the pursuer agreed that it
would lease the supermarket once it had been completed. The second defender carries on
Page 2 ⇓
2
business as consulting civil and structural engineers. The third defender carries on business
as building contractors.
[2] On 28 and 29 June 2011 the first defender and the third defender entered into a
building contract (“the Contract”) to design and construct the supermarket (“the Works”).
The form of contract used was the Design and Build Contract for Use in Scotland
(2005 Edition) (Revised October 2009). The Contract incorporated the amendments in Part 9
of the Schedule.
[3] On 31 May 2011 the first defender and second defender had entered into an
Appointment Agreement in terms of which the second defender agreed to provide certain
civil and structural engineering services (“the Services”) in connection with the Works.
[4] In terms of a Novation Agreement between the defenders the rights, obligations and
liabilities of the first defenders under the Appointment Agreement were transferred to and
assumed by the third defender, and the second defender obliged itself to undertake and
complete the performance of the Services under the Appointment Agreement to and in
favour of the third defender.
[5] The second defender and the pursuer executed a collateral warranty undertaking
(“the Struer Collateral Warranty”) dated 31 May 2011 and 25 August 2011 in terms of which
the second defender undertook certain obligations to the pursuer in respect of the Services
provided under the Appointment Agreement. The third defender and the pursuer also
executed a collateral warranty undertaking (“the Muir Collateral Warranty”) dated 24 June
2011 and 25 August 2011 in terms of which the third defender undertook certain obligations
to the pursuer in respect of the Works carried out under the Contract.
Page 3 ⇓
3
[6] Practical completion of the Works occurred on 22 December 2012. The pursuer
entered into a lease of the premises with the proprietors. The term of the lease was for at
least 20 years from 23 December 2011. The pursuer commenced trading at the premises. In
December 2013 significant ponding of water in the car park of the premises occurred.
Isolated damaged areas of the car park surface also became apparent. The pursuer
maintains that these problems have been caused by the first defender’s breach of the
Agreement for Lease; by the second defender’s breach of the Struer Collateral Warranty;
and by the third defender ‘s breach of the Muir Collateral Warranty. The pursuer seeks
redress for the loss and damage which it maintains it has sustained by reason of those
breaches.
[7] On 20 December 2016 the present action was raised as an ordinary action. The
summons was not called until December 2017, almost a year later. In January 2018 the
action was sisted. The sist expired in February 2019, and the defenders lodged defences. On
12 March 2019 the action was transferred to the commercial roll. Between March and
May 2019 the parties adjusted their pleadings. I allowed a debate on issues raised by the
pursuer, the second defender and the third defender in their notes of argument (20, 22 and
25 of process). Only the pursuer, the second defender, and the third defender participated
in the debate. The pursuer argued that certain of the averments of the second defender and
the third defender relating to design responsibility for the surface course of the car park
were irrelevant and ought not to be admitted to probation. It also maintained that the third
defender’s averments of personal bar were irrelevant and ought not to be admitted to
probation. In addition to defending the relevancy of their averments, the second and third
defenders argued that some of the obligations upon which the pursuer founded had been
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4
extinguished by the short negative prescription (Prescription and Limitation (Scotland) Act
1973 (the “1973 Act”), section 6).
[8] I propose firstly to set out the relevant terms of the Appointment Agreement, the
Contract, and the collateral warranties. After that I will consider the pursuer’s attack on the
relevancy of the second and third defenders’ averments. Finally, I will turn to the
prescription issues.
The Appointment Agreement, the Contract, and the collateral warranties
The Appointment Agreement
[9] In terms of clause 3.1 of the Appointment Agreement the second defender was “the
Consultants”. It undertook to provide “the Services … subject to and in accordance with the
provisions of this Agreement”. The Services were to be provided to the Clients, who were
the first defender prior to novation of the Appointment Agreement and the third defender
after novation. In the Appointment Agreement the first defender was also referred to as the
Developer and the third defender was referred to as the Contractor. Clauses 4, 12, 15, 21 and
26 provided:
“4 Duty of Care
4.1 The Consultants undertake that they have exercised and will continue to
exercise, in the performance of the Services to the Clients, the reasonable skill,
care and diligence expected of a competent professional civil and structural
engineer in the performance of the services who is experienced in carrying
out such services in relation to works of a similar size, scope and nature to the
Works.
…
Page 5 ⇓
5
4.3 The Consultants shall notify the Clients in writing as soon as reasonably
practicable in the event of becoming aware of any matter which might
materially prejudice the interests of the Client in connection with the Project.
…
12. Liaison
12.1 The Consultants shall:-
1. liaise with the Clients, the Other Consultants, the Developer and their
professional advisers, and any other party appointed in connection with the
Project under the Third Party Agreements, to facilitate the proper flow of
information, its integration into the existing structure and services and co-
ordination within the overall design of the Project
2. check that all of the design produced by them complies with the Employer’s
Requirements and that all of the ‘as-built’ drawings produced by them are
correct
…
12.3 Notwithstanding the foregoing terms of this Clause 12, the Consultants shall
remain fully responsible for all of the Services.
…
15 Variations to the Services
15.1 Any variations to the Services and/or additional services provided by the
Consultants shall not vitiate this Agreement but the scope and extent of each
such additional and/or varied service and the basis upon which the
Consultants shall be paid for rendering such services shall be agreed in
writing between the Clients and the Consultants (except in the case of
emergency where the health and safety of persons is at risk or damage to or
loss of property is threatened) prior to being carried out.
…
15.3 Any services provided pursuant to this Clause shall be provided subject to
and in accordance with the terms and conditions of this Agreement and the
Consultants shall enter into a formal minute of variation of the Agreement in
order to document the additional and/or varied services within fourteen days
of a written request from the clients to do so.
Page 6 ⇓
6
…
26 Entire agreement
26.1 This Agreement constitutes the entire contract between the parties and may
be varied or modified only by a deed duly executed by the parties in
accordance with the provisions of Section 3 of the Requirements of Writing
(Scotland) Act 1995.”
Part 1 of the Schedule listed the Other Consultants, which included: “Specialist Tenant
Requirements Adviser: STUART McTAGGART LIMITED”
[10] Part 3 of the Schedule provided:
“PART 3
THE CIVIL & STRUCTURAL ENGINEERING SERVICES
The Consultants shall carry out the following Services.
Stage 1 – Pre-Novation
1
Assist in formulation of the requirements of the Employer (for the purposes
of this Part 3 of the Schedule, references to ‘the Employer’ shall be construed
as references to the Developer) in respect of the Works, what they are
intended to achieve, the cost and programme.
…
9
Liaise with the Other Consultants in seeking from the Employer any further
information needed so that they can perform their services under their
various agreements with the Employer.
10 Liaise with the Other Consultants in making initial recommendations to the
Employer on the technical viability of the Works …
…
12 Provide sufficient preliminary information in relation to the Works in the
form of advice, data schedules, sketches, drawings, reports or outline
specifications for inclusion in the Employer’s Requirements …
…
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7
14 Attend meetings as required with other members of the Professional Team to
progress the Employer’s Requirements.
…
16 Prepare drawings sufficiently detailed for a tender of a Design and Build
construction contract …
Stage 2 - Post Novation
…
7
Develop the Contractor’s requirements into a definitive brief for the
structural elements of the Works …
…
14 Collaborate with the Professional Team and seek from the Contractor any
further information needed so that they can perform their services under
their various agreements with the Contractor.
15 Collaborate with the Professional Team and make recommendations to the
Contractor on the technical viability of the Works or any part thereof.
…
18 Develop the design of the Works and collaborate with the Professional Team.
…
23 Develop the structural elements of the design of the Works in collaboration
with the Contractor and prepare sufficient calculations, drawings, schedules
and specifications to enable the Contractor to construct the Works …
…
32 Assist any consultants appointed and examine the Contractor’s sub-
contractors, and other specialists’ proposals as may be required for the Works
and in the consideration of alternative designs for the Works submitted by
sub-contractors and specialists, or proposed by the Contractor.
…
Page 8 ⇓
8
General
1. The Consultants shall advise the Clients of any mistake, inaccuracy,
discrepancy or omission of which it becomes aware in the Contract.
2. As the design element of the Works for which the Consultants is (sic)
responsible in terms of this Agreement progresses the Consultants shall
consult with the Clients on a regular basis and shall keep the Clients fully
informed.
…
6. The Consultants shall attend or be represented at all principal site meetings
and at all meetings convened by the Clients relating to the design of the
works, if so required by the Clients, and shall advise and assist on all matters
arising at such meetings which relate to or affect the Services.
…”
The Contract
Articles of Agreement
[11] The Third Recital in the Articles of Agreement stated:
“the Contractor has checked and is satisfied as to the feasibility of the Employer’s
Requirements and subject to the Conditions has agreed to accept full responsibility
for any design incorporated in them …”
Article 1 provided:
“Article 1: Contractor’s obligations
The Contractor, for the Contract Sum, shall both design the Works and shall carry
out and complete the Works in accordance with, and the rights and duties of the
Employer and the Contractor shall be regulated by, these Articles of Agreement
together with the contract particulars forming part of this Agreement (the ‘Contract
Particulars’) and the Schedule annexed hereto (the ‘Schedule’) including, without
limitation, the Contract Documents as defined in the conditions bound in with this
Agreement at pages 19 to 66 (inclusive) (the ‘Conditions’) and listed in the Schedule
Part 8 all of which Contract Documents are hereby incorporated in and form part of
this Agreement and which ( (sic) in the case of the documents referred to in (i) to (iv)
of the Schedule are amended by Part 9 of the Schedule.
Page 9 ⇓
9
…”
Contract documents
[12] The Contract Documents listed in the Schedule Part 8 were (i) the Agreement
consisting of the recitals, the Articles and the Contract Particulars along with the Schedule
annexed; (ii) The Conditions; (iii) the Employer’s Requirements (including Contract
Drawings and Specification); (iv) the Contractor’s Proposals; (v) the Contract Sum
Analysis; (vi) the Schedule of Amendments.
Employer’s Requirements
[13] The Employer’s Requirements included Section B: Preliminaries and Appendix 1
(Drawing List) and Section H: Structural Drawings. Clause A10/240 of the Preliminaries
stated:
“DESIGN RESPONSIBILITY: The design responsibility for the complete works rests
with the Contractor.
The drawings and information issued with the Employer’s Requirements are for the
purposes of assisting in clarifying those Requirements and do not attract design
responsibility. The Contractor may vary the details included within the Employer’s
Requirements provided the Employer’s Requirements are not compromised and any
change is in accordance with the Conditions of Contract.
The Contractor is also responsible for designing suitable foundations, structures,
services, drainage based on site investigation reports prepared by the Contractor …”
Clause A11/120 provided that the Contract Drawings were listed in Appendix 1. One of the
listed drawings was the second defender’s drawing no 2548/0101B Proposed Drainage
Layout. That drawing detailed the use of TarmacDry for the car park surface course.
Page 10 ⇓
10
Contractor’s Proposals
[14] The Contractor’s Proposals consisted of a letter by the second defender to the first
defender dated 28 June 2011 which confirmed that its proposals for the Works were as set
out in or referred to in the Employer’s Requirements.
Conditions
[15] Clause 1.12.1 of the Conditions provided:
“The Appointments and Novation
1.12.1 The Contractor acknowledges that the Employer has appointed the Novated
Consultants upon the terms of the Appointments to carry out the initial design of the
Works and such design is included in the Employer’s Requirements. The Contractor
acknowledges that he is entirely satisfied with the terms of the Appointments and
subject to these Conditions accepts full responsibility for the work of the Novated
Consultants (and for any negligence, omission or default on their part under the
terms of the Appointments whether before or after the date of this Contract).”
In terms of clause 1.1 the term “Novated Consultants” was defined as meaning the second
defender and the Architect.
[16] Clause 2.1.1 provided:
“Contractor’s Obligations
General obligations
2.1.1
The Contractor shall carry out and complete the Works in a proper and
workmanlike manner and in compliance with the Contract Documents, the
Construction Phase Plan and the Statutory Requirements and for that
purpose shall complete the design of the Works including the selection of any
specifications for the kinds and standards of the materials, goods and
workmanship to be used in the construction of the Works so far as not
described or stated in the Employer’s Requirements or the Contractor’s
Proposals …”
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11
Clauses 2.11 and 2.12 of the standard conditions were deleted and not used. Clause 2.14 of
the standard conditions was deleted and a new clause 2.14 was substituted:
“Discrepancies in documents
…
2.14.3 The Contractor accepts entire responsibility for the Contractor’s Proposals or
any mistake, inaccuracy, discrepancy or omission contained therein and the
contractor warrants that he has carefully checked the Employer’s
Requirements and accepts full responsibility for the design contained therein
as if such design had been carried out by the Contractor.”
[17] Clause 2.17 of the standard conditions was deleted and a bespoke clause 2.17 was
substituted:
“Design Work – liabilities and limitation
…
2.17.2 The Contractor shall, subject to Clause 2.17.3.1, be responsible in all respects
for the design of the Works and shall adopt and take responsibility for all
design work in relation thereto including that which may have been carried
out before the date of this contract by any one of the Novated Consultants.
The Contractor accepts responsibility for any mistake, inaccuracy,
discrepancy or omission contained in the design comprised in the Employer’s
Requirements, or in any change thereon, and in the Contractor’s Proposals …
2.17.3 The Contractor warrants and undertakes to the Employer that:-
2.17.3.1
the design of the Works (including any design carried out by any
Sub-Contractor) has been and will be carried out using the
reasonable skill, care and attention expected of a properly
qualified and competent designer who is experienced in carrying
out such design services in relation to works of a similar size,
scope and nature to the Works.
…”
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12
The collateral warranties
The Struer Collateral Warranty
[18] Clause 1 of the Struer Collateral Warranty provided:
“1 Duty of Care
1.1 We warrant and undertake that we have exercised and will continue to
exercise, in the performance of our services under the Appointment, the
reasonable skill, care and diligence expected of a competent civil & structural
engineer in the performance of the Services who is experienced in carrying
out such services in relation to works of a similar size, scope and nature to the
Works.
1.2 We shall notify the Company in writing as soon as practicable in the event of
becoming aware of any matter which might materially prejudice the interests
of the Company in connection with the Works.”
The Muir Collateral Warranty
[19] Clause 1 of the Muir Collateral Warranty stated:
“1 Duty of Care
1.1 We warrant and undertake to the [pursuer] that:
1.1.1
we have executed and will continue to execute the Works in
conformity with the Contract using workmanship and materials of the
quality and standards specified in the Contract and if not specified
appropriate to the Works;
1.1.2
we have exercised and will continue to exercise, in the performance of
our services under the Contract with a design element, the reasonable
skill, care and attention expected of a properly qualified and
competent designer of the relevant discipline who is experienced in
carrying out such design services in relation to works of a similar size,
scope and nature to the Works.
1.2 We shall notify the [pursuer] in writing as soon as reasonably practicable in
the event of becoming aware of any matter which might materially prejudice
the interests of the [pursuer] in connection with the Works.
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13
1.3 We acknowledge that the [pursuer] shall be entitled to rely upon our
performance of our duties and obligations arising under the Building
Contract, and upon the undertakings and warranties contained in this
Agreement.”
The relevancy attack
The second and third defenders’ pleadings: design responsibility and personal bar
[20] In Answer 9 the second defender avers:
“9. … The Appointment does not make the Second Defenders responsible for
designing every aspect of the Works. The Pursuer appointed Rex Proctor and
Partners to prepare a Developer’s Shell Specification. This document provided an
outline of the Pursuer’s requirements for the car parking area. The Second Defender
went on to prepare an initial drainage design on that basis. Stuart McTaggart were
the Pursuer’s specialist requirements adviser for the works. They were responsible
for reviewing all drawings on behalf of the Pursuer, including the drainage design
drawings for the car park. As part of that review, in or around September 2010,
Stuart McTaggart requested that the traditional drainage system proposed for the car
park be re-considered. They proposed that TarmacDry be used in place of the
traditional system using gulleys or linear/slot drains (the traditional system) …
Revised drainage design drawings were prepared to specify the TarmacDry system
for use in the car parking bays only. Following the Appointment of the Second
Defender in May 2011, a meeting took place on or around 13 June 2011 among
representatives of the Second and Third Defenders and a representative from
Tarmac. At that meeting, Tarmac advised that the TarmacDry system was about to
be installed at the Pursuer’s store in Bathgate. Tarmac also advised that they design
the system to suit specific requirements and site constraints … Following that
meeting, the Third Defender was to confirm if they wished to proceed with the
TarmacDry system for the car park. On or around 18 July 2011 the Third Defenders
confirmed that they intended to proceed with the TarmacDry system for the car park.
The use of TarmacDry was specified in the Employer’s Requirements … The Second
Defenders’ duties did not extend to the (sic) doing design work in respect of the
TarmacDry system. Having selected the TarmacDry system following receipt of
advice from Stuart McTaggart Limited, the Pursuer made it clear that they not did
not require the surface water drainage system for the car park to be designed by
anyone to the extent that they wanted a TarmacDry system which was already a
designed system … With reference to the Third Defenders answers admitted the
pursuers engaged Stuart McTaggart, Consulting Engineers, to act on their behalf in
relation to the construction of the premises; the second defenders had provided
drawing number 2548/0101A as part of the proposed Employer’s Requirements for
the construction of the car park; drawing number 2548/0101A prescribed that hot
rolled asphalt was to be used throughout the carpark; Stuart McTaggart on behalf of
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14
the pursuers directed that the second defender should revise their drawing to
prescribe the use of the TarmacDry system; the pursuers had previously installed
the same TarmacDry system at their store in Bathgate and subsequently did so at
stores in Dalkeith and Kirkcaldy; consequently the second defenders produced
drawing 2548/0101B incorporating the TarmacDry system; this drawing was
included in the final Employer’s Requirements and incorporated into the Building
Contract between the first defender and the third defender dated 28 and 29 June
2011; the third defender was obliged to comply with the Employer’s Requirements
…”
[21] In Answer 9 the third defender avers:
“9. … Admitted that the third defender was the design and build main
contractor for the whole of the Works under the Building Contract. Admitted, under
explanation to follow, that they agreed that they would accept full responsibility for
all design aspects of the Works … The pursuer engaged Stuart McTaggart,
Consulting Engineers, to act on their behalf in relation to the construction of the
premises. The second defenders had provided drawing number 2548/0101A as part
of the proposed Employer’s Requirements for the construction of the carpark.
Drawing number 2548/0101A prescribed that hot rolled asphalt was to be used
throughout the carpark. Stuart McTaggart on behalf of the pursuers directed that the
second defender should revise their drawing to prescribe the use of the TarmacDry
system. The pursuer’s insistence that the Employer’s Requirements included
TarmacDry did not fall within the design of the Works in accordance with the
Employer’s Requirements undertaken by the third defender … Consequently the
second defenders produced drawing 2548/0101B incorporating the TarmacDry
system. This drawing was included in the final Employer’s Requirements and
incorporated into the Building Contract between the first defender and the third
defender dated 28 and 29 June 2011. The third defender was obliged to comply with
the Employer’s Requirements … Separatim the pursuer through their agent,
Stuart McTaggart Ltd, having selected TarmacDry as a building material and
represented to the third defenders that the selection of the TarmacDry product was
suitable for use at the locus and the third defenders having acted to their prejudice in
agreeing to TarmacDry being included within the Employer’s Requirements the
Pursuer is personally barred from founding upon its inclusion as a breach of either
the Collateral Warranty or the Building Contract. Further, and in any event, the
Pursuer’s agents, Stuart McTaggart Ltd, having selected the TarmacDry product the
Pursuer is personally barred from asserting that the material’s cleaning criteria are
not in accordance with the Building Contract or Collateral Warranty.”
Page 15 ⇓
15
Submissions for the pursuer
[22] Mr Young submitted that the second and third defenders’ averments that they have
no contractual responsibility for the selection and use of TarmacDry are irrelevant. On a
proper construction of the Appointment Agreement the second defender was contractually
responsible to the Clients for the design of the car park surface. On a proper construction of
the Contract the third defender was contractually responsible to the first defender for that
design.
[23] The Appointment Agreement obliged the second defender to liaise with Other
Consultants (including Stuart McTaggart Limited) (clause 12.1), but it remained fully
responsible to the Clients for all of the Services (clause 12.3). The Services included, inter
alia, the design of all of the works necessary for completion of the Project. The second
defender’s averment that its obligations did not extend to designing every aspect of the
Works flew in the face of the terms of the Agreement.
[24] The fact that the pursuer’s consultant, Stuart McTaggart Limited, suggested the use
of TarmacDry and that it should be included in the Employer’s Requirements for the
Contract did not assist the second and third defenders. On a proper construction of the
Appointment Agreement the second defender was responsible to the Clients for that design.
It was part of the Services. The Services included, inter alia, the design of all of the works
necessary for completion of the Project. On a proper construction of the Contract the third
defender was responsible to the first defender for the design. Reference was made in
particular to the Third Recital to, and to article 1 of, the Articles of Agreement; to
clauses 1.12.1, 2.14.3 and 2.17.2 of the Contract conditions; and to clause A10/240 of the
Preliminaries.
Page 16 ⇓
16
[25] The Appointment Agreement and the Contract could not be clearer. The
Appointment Agreement imposed a “one-stop shop” type of liability on the second
defender to the Clients. The Contract imposed the same sort of liability on the third
defender, as design and build contractor, to the first defender. Reference was made to
Hudson’s Building and Engineering Contracts (13th ed) at paragraphs 2-043 to 2-044 and 3-116 to
[2017] BLR 477.
[26] The third defender’s averments of personal bar were irrelevant. Any representation
by Stuart McTaggart Limited pre-dated the Contract and the Muir Collateral Warranty.
Personal bar requires a person to have an existing right and to act inconsistently with
enforcement of that right: Reid and Blackie, Personal Bar, at paragraph 2-04; Electricity
Supply (Nominees) (Scotland) Limited v Combined Capital Limited 1987 SC 303, per Lord Wylie
at pp 305 – 306; William Grant & Sons Limited v Glen Catrine Bonded Warehouse Limited 2001
SC 901, per Lord Clarke at pp 941 – 942. Moreover, it was difficult to see how any
representation on the pursuer’s behalf relating to the Contract (to which it was not a party)
could give rise to personal bar of rights under the Muir Collateral Warranty. In any case,
there were no averments about the authority, actual or ostensible, of Stuart McTaggart
Limited to make any representation on behalf of the pursuer as to design liability for aspects
of the Works: Reid and Blackie, supra, at paragraphs 13-18 to 13-22.; and the timing, terms,
and nature of any representation were not specified. Against the background of the
contractual scheme between the parties, the third defender cannot reasonably have relied on
a representation from Stuart McTaggart Limited to discharge it from its obligations under
the Muir Contractual Warranty for design of the car park surface course: cf Ben Cleuch
Page 17 ⇓
17
and 2008 SC 252, per the Opinion of the Court delivered by Lord Macfadyen at
paragraph 87.
Submissions for the second defender
[27] Mr Morton submitted that the person with sole contractual responsibility for
designing and building the car park was the third defender. He accepted that “as drafted”
the Appointment Agreement provided that the second defender had responsibility to the
Clients for the design of the car park surface. However, if I understood his submission
correctly, he maintained that in the circumstances the second defender’s design role
responsibility had been “curtailed”. Those circumstances were that the use of TarmacDry
had been instructed by the first defender at the instigation of the pursuer’s consultant; it
had been included in the Employer’s Requirements; and in July 2011 the third defender had
confirmed that it intended to use it. The “practical effect” was that the Appointment
Agreement had been varied to remove the second defender’s design responsibility to the
Clients so far as use of TarmacDry was concerned.
[28] Somewhat inconsistently with that submission, Mr Morton further submitted that it
was not his position that once the pursuer’s consultant suggested the use of TarmacDry as
part of the Employer’s Requirements that the second defender was absolved of all
responsibility for defects arising from its use. Rather, the second defender’s position was
that it denied that it was negligent in failing to warn the Clients about the difficulties which
might result from its use. In the circumstances there had been no duty to warn.
Page 18 ⇓
18
Submissions for the third defender
[29] Mr Jones submitted that not all design and build contracts involved the Contractor
undertaking responsibility for every part of the design. It was a question of construction of
the contract in each case (Hudson’s Building and Engineering Contracts (13th ed), at
paragraphs 3-23, 3-116). Here, clause 2.1 of the Contract conditions did not impose any
design obligations on the third defender. On a proper construction of the Contract the third
defender was not responsible to the Clients for design in so far as matters had been specified
in the Employers’ Requirements. Reference was made to British Overseas Bank Nominees Ltd
Opinion of the Court delivered by Lord Drummond Young at paragraphs 18-19; and to MT
Højgaard A/S v E.ON Climate & Anor, supra, per Lord Neuberger of Abbotsbury PSC at
paragraph 44; cf A M Gillespie & Co v James Howden & Co (1885) 12 R 800, (1885) 22 SLR 527.
Mr Jones maintained that the issue of whether the third defender had contractual
responsibility to the Clients for the TarmacDry aspect of the design ought to be determined
after proof.
[30] At pp 3-4 of the third defender’s written note of argument (no 31 of process) it had
also been maintained that on a proper construction of clause 2.17 the third defender was not
responsible to the Clients for design in so far as matters had been specified in the
Employer’s Requirements. However, Mr Jones indicated that he did not insist upon that
aspect of the note, and no argument in support of it was advanced.
[31] Mr Jones submitted that the third defender’s averments of personal bar were suitable
for inquiry. The third defender averred that the inclusion in the Employers’ Requirements
of the design employing TarmacDry had been at “the direction” of Stuart McTaggart
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19
Limited representing the pursuer’s interests. In those circumstances it could not be said at
this stage that the third defender’s defence of personal bar was clearly irrelevant. By
agreeing to the pursuer’s suggestion that TarmacDry be included within the Employer’s
Requirements the third defender had acted to its prejudice. In those circumstances the
pursuer was personally barred (i) from claiming that the inclusion of TarmacDry in the
Employer’s Requirements was a breach of the Contract and, consequentially, of the Muir
Collateral Warranty; and (ii) from asserting that TarmacDry’s cleaning criteria were not in
accordance with the Contract and that they gave rise to a breach of the Muir Collateral
Warranty. The classic statement of the requirements of personal bar were set out in Gatty v
Maclaine 1921 SC (HL) 1, per Lord Chancellor Birkenhead at p 7. It was not essential that the
words or conduct giving rise to personal bar happened after the coming into existence of the
right said to have been affected by the bar. The authorities which suggested that that was a
requirement were cases of waiver (eg Electricity Supply (Nominees) (Scotland) Limited v
Combined Capital Limited, supra) or cases of acquiescence (eg William Grant & Sons Limited v
Glen Catrine Bonded Warehouse Limited, supra). Contrary to the suggestion in McBryde, The
Law of Contract in Scotland (3rd ed) at paragraph 25-09, pre-existence of the affected right was
not a prerequisite for other types of personal bar. It was not a prerequisite here. On a
proper reading of Reid and Blackie, Personal Bar, paragraph 2-04, the authors did not state
that there had to be a pre-existing right for personal bar to operate. The observations of
Lord Anderson in Nairn v South-East Lancashire Insurance Co Limited 1930 SC 606 at p 614 had
to be read in context. If there had been a contractual obligation in that case it would have
been antecedent to the conduct by the defenders which the pursuer said gave rise to
personal bar. Lord Anderson had not been stating a principle of general application.
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20
the suggested principle. So far as reliance was concerned, the reasonableness or otherwise
of reliance on conduct had been determined after proof in Ben Cleuch Estates Limited v
Scottish Enterprise, supra. The same course should be followed here.
Decision and reasons: relevancy of the second and third defenders’ averments
Responsibility of the second defender to the Clients
[32] In my opinion, whether the second defender is responsible to the Clients for the
design of the car park surface course is a question of law which can be determined as a
matter of interpretation of the Appointment Agreement. In relation to that issue I do not
understand there to be any material matters in dispute which require probation.
[33] In my view, on a proper construction of the Appointment Agreement the second
defender is responsible to the Clients for the design of the car park surface course. I reach
that view having regard to the whole terms of Appointment Agreement. I think it is clear
from the description of the Services in Part 3 of the Schedule that they included all civil and
structural engineering aspects of the design for the Works. It is also clear that
notwithstanding that the Appointment Agreement envisaged that there would be liaison
and input from the Other Consultants in connection with the Project (clause 12.1), it made
plain that the second defender remained fully responsible to the Clients for all of the
Services (clause 12.3).
[34] The fact that the pursuer’s consultant, Stuart McTaggart Limited, suggested the use
of TarmacDry (and that it should be included in the Employer’s Requirements for the
Contract) does not assist the second defenders. On a proper construction of the
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21
Appointment Agreement the second defender was responsible to the Clients for that design.
It was part of the Services. The Services included, inter alia, the design of all of the works
necessary for completion of the Project.
[35] I reject the suggestions that the second defender’s design responsibility for the car
park surface course was “curtailed” or “effectively varied”. There was no formal variation
of the Appointment Agreement in this regard (for the requirements of such a variation see
clauses 15.1, 15.3 and 26), and in my view there is no proper basis for maintaining that there
was otherwise any effective variation.
Responsibility of the third defender to the Clients
[36] In my opinion, whether the third defender is responsible to the Clients for the design
of the car park surface course is a question of law which can be determined as a matter of
interpretation of the Contract. In relation to that issue I am not persuaded that there is any
material matter in dispute which requires probation.
[37] On a proper construction of the Contract the third defender was responsible to the
first defender for the design of the car park surface course. I reach that conclusion having
regard to the whole terms of the Contract, including the Third Recital to, and article 1 of, the
Articles of Agreement; to clauses 1.12.1, 2.14.3 and 2.17.2 of the Contract conditions; and to
clause A10/240 of the Preliminaries.
[38] In terms of the Third Recital the parties to the Contract agreed that the third defender
“has checked and is satisfied as to the feasibility of the Employer’s Requirements and subject
to the Conditions has agreed to accept full responsibility for any design incorporated in
them.” In terms of article 1 the third defender obliged itself to “carry out the Works in
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accordance with … these Articles of Agreement together with the Contract Particulars and
the Schedule … including the Contract Documents”. Clause A10/240 of the Preliminaries
stated clearly that the design responsibility for the complete works rested with the third
defender. In terms of clause 2.14.3 of the Conditions the Third Defender accepted “entire
responsibility for the Contractor’s Proposals”. It also warranted that it had carefully
checked the Employer’s Requirements and it accepted “full responsibility for the design
contained therein” as though such design had been carried out by it. That provision stands
in stark contrast to clause 2.11 of the standard condition (which the parties chose not to
incorporate in the Contract):
“2.11 Subject to clause 2.15, the Contractor shall not be responsible for the contents
of the employer’s requirements or for verifying the accuracy of any design
contained therein.”
It is worth noting that while the same standard form of contract was used in the present case
and in British Overseas Bank Nominees Ltd & Others v Stewart Milne Group Ltd, supra, the
amendments to the Contract terms were materially different here. In British Overseas Bank
the standard clause 2.11 was incorporated in the Contract and there was no equivalent of
clause 2.14.3. That explains the court’s observations in paragraphs 18 and 19 of its Opinion.
[39] The fact that the pursuer’s consultant, Stuart McTaggart Limited, suggested the use
of TarmacDry (and that it should be included in the Employer’s Requirements for the
Contract) does not assist the third defenders. On a proper construction of the Appointment
Agreement the second defender was responsible to the Clients for that design. It was part of
the Services. The Services included, inter alia, the design of all of the works necessary for
completion of the Project. In terms of clause 1.12.1 the third defender acknowledged that the
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first defender had appointed the Novated Consultants to carry out the initial design of the
Works and it accepted full responsibility for their work. In terms of clause 2.17.2 the third
defender accepted responsibility in all respects for the design of the works including the
work of the Novated Consultants. The second defender was a Novated Consultant and the
work for which it was responsible under the Appointment Agreement included the design
of the car park surface course. In terms of clauses 1.12.1 and 2.17.2 the third defender
accepted full responsibility to the first defender for that work.
Personal bar?
[40] On a fair reading of the third defender’s averments it avers that engineers instructed
on the pursuer’s behalf, Stuart McTaggart Limited, represented to the third defender that
TarmacDry was suitable for use at the locus. For present purposes I assume, without
deciding, that Stuart McTaggart Limited had authority – actual, implied, or ostensible – to
make that representation on the pursuer’s behalf. The third defender avers that it acted on
that representation to its prejudice – the prejudice being that it agreed to the use of
TarmacDry being specified in the Employer’s Requirements – and that in consequence the
pursuer is personally barred (i) from founding upon its inclusion in the Employer’s
Requirements as a breach of either the Muir Collateral Warranty or the Contract; and (ii)
from asserting that TarmacDry’s cleaning criteria are not in accordance with the Contract or
the Muir Collateral Warranty.
[41] In my opinion the third defender’s averments of personal bar are irrelevant. The
rights which the third defender says have been barred are valuable ones. Bar ought not
readily to be imposed (Reid and Blackie, supra, paragraphs 2-06, 2-60; Gloag and
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24
Henderson, The Law of Scotland (14th ed), paragraph 3.07). In the whole circumstances I am
not persuaded that there are good grounds for imposing it here.
[42] First, in my view the suggested representation was not a representation of fact. It
was a representation of opinion. A plea of personal bar cannot be founded upon a mere
statement of opinion (Rankine, Law of Personal Bar in Scotland, pp 3 – 5; Gatty v Maclaine,
supra, per Lord Chancellor Birkenhead at p 7; Reid and Blackie, supra, paragraph 2-15; Stair
Memorial Encyclopaedia, The Laws of Scotland, vol 16, Personal Bar (Sheriff A M Bell),
paragraph 1612).
[43] Second, at the time the representation is said to have been made the rights which the
third defender maintains the representation was inconsistent with were not yet in existence.
The Contract and the Muir Collateral Warranty had not been executed. Since the pursuer’s
rights under the Muir Collateral Warranty were not in existence, the making of the
representation was not, and could not be, a representation which was inconsistent with
antecedent rights which the pursuer is now seeking to enforce (Nairn v South East Lancashire
Insurance Co, supra, per Lord Anderson at p 614, Lord Ormidale at p 617; McBryde, supra,
paragraph 25-09; Reid and Blackie, supra, paragraph 2-04; Gloag and Henderson, supra,
paragraph 3-06). In my opinion Nairn v South East Lancashire Insurance Co, supra, is clear
authority for the proposition that personal bar is irrelevant unless there is said to be
inconsistency with a pre-existing right.
[44] Third, even if I am wrong in concluding that there has been no inconsistent conduct
on the part of the pursuer, in my opinion it would have been unreasonable in the
circumstances for a person in the position of the third defender to have relied upon the
pursuer’s representation. The context of the representation was that, albeit that the pursuer
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had instructed Stuart McTaggart Limited to represent its interests as a future tenant in
discussions relating to the Employer’s Requirements, the ultimate decision as to what was
included within the Employer’s Requirements was the first defender’s. In terms of the
Appointment Agreement the second defender had design responsibility to the first defender
for TarmacDry’s inclusion in the Employer’s Requirements. In terms of the Contract the
third defender had design responsibility to the first defender for that matter. Neither the
second defender nor the third defender required to follow Stuart McTaggart Limited’s
suggestion, and given their respective design responsibilities they would not be expected to
have done so without satisfying themselves as to the appropriateness of the suggested
design. Moreover, in my opinion the undertakings and warranties given by the third
defender in clause 1 of the Muir Collateral Warranty (and in particular clause 1.3) are strong
contra-indications against the reasonableness of a person in the position of the third
defender relying on the representation.
[45] Fourth, I am not persuaded that the third defender has relevant averments that in the
circumstances it would be unfair for the rights now allegedly barred to be exercised by the
pursuer (Reid and Blackie, supra, paragraphs 2-03, 2-12, 2-40 to 2-61; Gloag and Henderson,
supra, paragraphs 3.05 and 3.07). Relatively speaking, bearing in mind the respective roles of
the pursuer, the first defender, the second defender, and the third defender, I do not think
that the pursuer’s representation was particularly blameworthy. The pursuer, through
Stuart McTaggart Limited, was looking out for its interests as a prospective tenant.
Moreover, in my view in the circumstances a person in the third defender’s position would
not reasonably have believed that the relevant rights under the Muir Collateral Warranty
would not be exercised. Generally, the objective of a collateral warranty is to place a third
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26
party to a contract in an equivalent position to a party to the Contract (British Overseas Bank
Nominees Ltd & Others v Stewart Milne Group Ltd, supra, per the Opinion of the Court at
paragraph 12). Broadly speaking, here the objective was to place the pursuer in an
equivalent position to the Employer so far as rights under the Contract against the third
defender were concerned. That objective would be thwarted if the third defender’s personal
bar defence was sound. The terms of the undertakings and warranties given by the third
defender in clause 1 of the Muir Collateral Warranty (and in particular clause 1.3) are very
hard to reconcile with the proposition that they were to be qualified by a representation
made at an earlier time. Further, while the third defender asserts that there was a causal link
between Stuart McTaggart Limited’s representation and the third defender’s design
incorporating TarmacDry, any link was at best indirect. The second defender had initial
design responsibility for the use of TarmacDry (in terms of the Appointment Agreement)
and the Employer decided that it should be used. In entering into the Contract the third
defender relied on the second defender’s initial design and the third defender itself
undertook design responsibility for TarmacDry.
Prescription
The summons
[46] In article 4 of condescendence in the summons the pursuer averred that in terms of
clause 2 (sic) of the Appointment Agreement (in fact, the appointment provision was
clause 3) the second defender was appointed to provide the Services; that the Services
“were generally in respect of civil and structural engineering services in relation to” the
Works; and that in terms of clause 4 it undertook that it had exercised and would continue
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27
to exercise, in the performance of the Services to the first defender and the third defender,
“the reasonable skill, care and diligence expected of a competent professional civil and
structural engineer in the performance of its services who is experienced in carrying out
such services in relation to works of a similar size, scope and nature to the Works.” (That
undertaking was the undertaking given in clause 4.1). In article 5 the pursuer narrated the
execution of the Struer Collateral Warranty and further averred:
“… In terms of Clause 1 of the Struer Collateral Warranty, under the heading of
“Duty of Care”, the second defender, among other things, warranted and undertook
to the pursuer that: “we have exercised and will continue to exercise in the performance of
our services under the Appointment, the reasonable skill, care and diligence expected of a
competent civil & structural engineer in the performance of the Services who is experienced
in carrying out such services in relation to works of a similar size, scope and nature to the
Works”…”
In article 6 the pursuer averred:
“6. … In terms of the Building Contract the first defender was ‘the Employer’
and the third defender was ‘the Contractor’… In terms of Clause 2.1 … the
third defender was obliged, among other things, ‘to carry out and complete
the Works in a workmanlike manner in accordance with the Contract
Documents, the Construction Phase Plan and the Statutory Requirements and
for that purpose shall complete the design of the Works …’. In terms of
Clause 2.17… the third defender was, among other things, also under the
following obligations:
‘2.17.1 … the contractor warrants and undertakes to the Employer that the
Works and all workmanship comprised in them shall comply with the
Employer’s Requirements and that they will exercise the standard of
skill and care referred to in clause 2.17.3.1 to see that the design of the
Works shall comply with the Employer’s Requirements.
2.17.2 The Contractor shall, subject to Clause 2.17.3.1, be responsible in all
respects for the design of the works and shall adopt and take
responsibility for all design work in relation thereto including that
which may have been carried out prior to the date of this Contract by
any one of the Novated Consultants. The Contractor accepts
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28
responsibility for any mistake, inaccuracy, discrepancy or omission
contained in the design comprised in the Employer’s Requirements, or
any change thereon, and in the Contractor’s Proposals …
2.17.3 The Contractor warrants and undertakes to the Employer that:-
2.17.3.1
the design of the Works (including any design carried out
by any Sub-Contractor) has been and will be carried out
using the reasonable skill, care and attention expected of a
properly qualified and competent designer of the relevant
discipline who is experienced in carrying out such design
services in relation to works of a similar size, scope and
nature to the Works
2.17.3.2 the design of the Works will, when completed, comply
with the Statutory Requirements.
…”
In article 7 the pursuer narrated the execution of the Muir Collateral Warranty and it further
averred:
“… In terms of Clause 1 of the Muir Collateral Warranty, under the heading of ‘Duty
of Care’, the third defender, among other things, warranted and undertook to the
pursuer that: ‘we have exercised and will continue to exercise in the performance of our
services under the [Building] Contract with a design element, the reasonable skill, care and
attention expected of a properly qualified and competent designer of the relevant discipline
who is experienced in carrying out such design services in relation to works of a similar size,
scope and nature to the Works’…”
In articles 9, 10 and 11 the pursuer averred:
“9. … issues have arisen with significant ponding of water on the pavement of
the car park and isolated areas of failing surfacing material in the most
heavily trafficked areas. The significant ponding first manifested itself in or
around December 2013. The feature of the pavement which has led to both of
these matters is the 120mm thickness of asphalt which comprises the
uppermost part of the pavement. That asphalt is comprised of 120mm
thickness of TarmacDry porous asphalt installed directly over a Course
Graded Aggregate (‘CGA’) … The design intent is that rainfall should
percolate through the voids in the TarmacDry porous asphalt and enter the
CGA from which it would be discharged … As a permeable pavement there
ought to be no need for a conventional surface water drainage system …
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29
10. Following the first manifestations of significant ponding, investigations were
carried out … [E]xamination revealed that the voids in the surface of the
TarmacDry asphalt were completely filled with debris … [T]he TarmacDry
asphalt was failing to conduct the surface water vertically downwards into
the underlying CGA, thereby causing the ponding. Water carries detritus
when flowing. That detritus is deposited when the water stops flowing. This
has the consequence that the detritus is deposited at the low spot on the
pavement. The depositing of detritus by this, or similar, means has caused
the TarmacDry asphalt to lose its porosity by the detritus filling the voids …
It is not unusual for porous asphalt to become blocked in this way. The
TarmacDry asphalt was accordingly unsuitable for use in the pavement of the
car park. Its use has caused the ponding. The use of TarmacDry asphalt has
also led to the areas of failing surface material, although that is a secondary
matter …
11. The said issues have been caused, or at least materially contributed to, by
failures by the second and third defenders in carrying out the Appointment
Agreement and the Building Contract respectively, including (without
prejudice to that generality) those obligations therein condescended upon
above. Those failures have placed the second and third defenders in breach
of their obligations to the pursuer under the Struer Collateral Warranty and
the Muir Collateral Warranty respectively, including (without prejudice to
that generality) those obligations condescended upon above …”
In article 12 the pursuer averred that the loss and damage it had sustained included the
carrying out of temporary repairs, but that it will require to carry out a complete repair of
the car park which will involve the removal of the surface course and the installation of a
suitable replacement surface.
The adjusted pleadings
[47] The pursuer’s pleadings were adjusted on 26 March and 21 May 2019. For present
purposes it is unnecessary to differentiate between the two sets of adjustments. In article 9,
in response to averments made by the second and third defenders taking issue with their
having responsibility for the design of the Works the pursuers averred:
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30
“… [T]he second defender agreed, in terms, that they would remain fully
responsible for all of the Services. Those services included, inter alia, the design of all
of the works necessary for the completion of the Project. This included the drainage
system in the car park. Reference is made to Clauses 1, 12 and Part 3 of the Schedule
to the Appointment Agreement … the third defender was the design and build main
contractor for the whole of the Works under the Building Contract. They agreed, in
terms that they would accept full responsibility for all design aspects of the Works.
Reference is made to Clauses 2.14.3 and 2.17 of the Building Contract (as amended by
part 9 of the schedule).”
Later in the same article, in response to averments by the second and third defenders that
the pursuer had failed to clean and maintain the TarmacDry properly, the pursuer denied
any such failure and averred:
“Separatim, and in any event, the third defender was obliged to construct the Works
(including the drainage system in the car park) in accordance with the Employer’s
Requirements. It was an express term of Para. 1.01.05 of the developer’s shell
specification in Section D of the Employer’s Requirements that the selection of
building materials must be made ‘with the avoidance of regular cleaning as a criteria.
This will include the normal deposit of dirt and grime …’ To the extent that the
TarmacDry is said by the defenders to need regular and extensive hydro cleaning in
order to maintain hydraulic conductivity, that would be a breach of the third
defender’s obligations to construct the Works in accordance with the Employer’s
Requirements. Separatim, any case based on breach of Clause 2.14.3 and Para. 101.05
(sic) is not a new or fundamentally different claim from the claim advanced at the
outset of these proceedings. It is premised on breach of the same basic obligations, in
the same contract, in respect of the same damages. It has not prescribed …”
The adjustments to article 11 included the following averments:
“… no competent professional civil and structural engineer experienced in the
carrying out of works such as those carried out at the Premises and exercising
reasonable skill and care would have designed the drainage system in the car park to
incorporate the use of TarmacDry. Further, and in any event, no competent
professional civil and structural engineer experienced in the carrying out of works
such as those carried out at the Premises and exercising reasonable skill and care
would have failed to issue a warning of the known issues with the clogging of
porous asphalt and the likely consequences in terms of ponding, failure of the
general SUDS system, maintenance, and remedial work. In including porous asphalt
in the design et separatim in failing to issue any such warning, the second and third
defenders breached their various obligations hereinbefore condescended upon in the
Building Contract and Appointment Agreement. Reference is made to Articles 4 and
6 of Condescendence. Separatim, in respect of the third defender, the third defender
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31
warranted that the Works and all workmanship comprised therein would comply
with the Employer’s Requirements. Reference is made to Article 6 of
Condescendence. This included, inter alia, the requirements in the Developer’s Shell
Specification in Section D of the Employer’s Requirements. This included the
requirement at Para. 4.09.02 that the below ground drainage network be designed ‘to
accommodate a 1 in 200 year storm event…such that no ponding or temporary storage of
flood water is visible at ground level.’ As constructed, the underground drainage does
not comply with that specification. There is regularly ponding and temporary
storage of flood water visible at ground level. Further, such ponding occurs in
circumstances falling well short of a 1 in 200 year storm event. In these
circumstances, the third defender is in breach of its obligations in the Building
Contract. Separatim, there is evidence of contamination of the layers of the
TarmacDry during its construction. Further, the laying of TarmacDry requires to be
done very carefully such as to ensure there are sufficient voids in the material to
allow downward percolation. Tarmac inspected the works in 2014. They considered
the failure of the TarmacDry within such a short period of installation was due to
some form of construction defect of this nature. In the circumstances, whilst the
clogging hereinbefore condescended would inevitably have occurred, it is believed
and averred that the failure of the TarmacDry has been materially contributed to by
poor workmanship in its installation by the third defender in breach of its obligations
under, inter alia, Clause 2.1 of the Building Contract …”
Submissions for the second defender
[48] Mr Morton’s motion was that the second defender’s first and fifth pleas-in-law
should be sustained and that the action against the second defender should be dismissed.
The first plea is a plea to the relevancy of the pursuer’s averments in so far as directed
against the second defender, and the fifth plea is a plea that certain of the averments in
article 11 ought not to be admitted to probation on the ground that they “have prescribed”.
[49] On the basis of the pursuer’s averments, by December 2013 there had been the
Kinkel at p 81; David T Morrison & Co Ltd t/a Gael Home Interiors v ICL Plastics Ltd 2014 SC
(UKSC) 222, per Lord Reed at paragraph 11). The action had been raised within five years of
that date, but the averments in the summons had been insufficiently specific to be a relevant
Page 32 ⇓
32
claim in respect of the obligations upon which the pursuer now seeks to found. The
averments in the summons had founded upon breaches of the general obligations in
clauses 2 and 4 of the Appointment Agreement. There had been no specification of the
particular respects in which it was said that those general obligations had been breached, or
any case that more specific obligations had been breached. The claim made against the
second defender in the summons was not a relevant claim to enforce the obligations which
the pursuer now seeks to enforce. The obligations it now seeks to enforce are (i) an
obligation to make reparation for breach of the second defender’s design obligations under
the Appointment Agreement (the design failure being the use of TarmacDry); and (ii) an
obligation to make reparation for failing to issue a warning of the known issues with the
clogging of porous asphalt and the likely consequences in terms of ponding, failure of the
general SUDS system, maintenance, and remedial work. The averments in the summons
had not sought to enforce either of those obligations. Reference was made to J G Martin
Plant Hire ltd v Ballantyne Copland France & Co 1996 SC 105, per Lord Justice Clerk Ross at
p 111 A-B; Classic House Developments Ltd v GD Lodge & Partners and Others, Unreported,
30 January 1998, per Lord Macfadyen at pp 3-6; Cole v Lonie 2001 SC 610, per the Opinion of
the Court delivered by Lord Dawson at paragraph 16; Musselburgh & Fisherrow Co-operative
Lord Doherty at paragraph 65; McClure Naismith LLP, Thistle Property Holding Company
Limited v Harley Haddow Partnership 2018 SCLR 257, per Lord Doherty at paragraph 18;
Johnston, Prescription and Limitation (2nd ed), paragraph 2.23). Accordingly, both of the
claims which the pursuer now sought to advance against the second defender had
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33
prescribed. Even if, contrary to Mr Morton’s submission, the claim to enforce obligation (i)
was not a new claim, the claim to enforce obligation (ii) was certainly a new claim. There
had been no hint of a claim to enforce any such obligation in the averments in the summons.
Submissions for the third defender
[50] Mr Jones submitted that the pursuer’s averments relating to paragraphs 1.010.05 and
4.09.02 of the Developer’s Shell Specification, to the duty to warn, and to poor workmanship
should be excluded from probation.
[51] The correct approach was to examine the pleadings before and after their adjustment
to determine if the obligations to make reparation which the pursuer now sought to enforce
were the same obligations (J G Martin Plant Hire ltd v Ballantyne Copland France & Co, supra,
per Lord Justice Clerk Ross at p 111A-B; Classic House Developments Ltd v GD Lodge &
Partners and Others, supra, per Lord Macfadyen at pp 3-6; McClure Naismith LLP, Thistle
Property Holding Company Limited v Harley Haddow Partnership, supra, per Lord Doherty at
paragraph 180).
[52] In the summons the obligation to make reparation which the pursuer sought to
enforce, through the Muir Collateral Warranty, was the obligation to make reparation for
breach of the third defender’s design obligations. The case made was that TarmacDry was
unsuitable and ought not to have been used, and that its use had resulted in a car park
surface which was subject to ponding and failure. The pursuer now also sought to enforce
obligations to make reparation for different breaches, but the averments in the summons
had contained no suggestion that the pursuer was seeking to enforce obligations to make
reparation for those breaches. It had been baldly averred that in using TarmacDry the third
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34
defender had breached the Employer’s Requirements, but there had been no specification of
that - in particular there had been no reference to failures to comply with paragraphs 1.01.05
and 4.09.02 of the Developer’s Shell Specification. There had been no suggestion that the use
of TarmacDry was inappropriate because it would require regular cleaning
(paragraph 1.01.05), or that it did not comply with the need to accommodate a 1 in 200 year
storm event (paragraph 4.09.02). No case of poor workmanship by the third defender had
been advanced. Nor had there been any case that there had been a failure to warn the
pursuer or the first defender about known issues with the clogging of porous asphalt and
the likely consequences in terms of ponding, failure of the general SUDS system,
maintenance, and remedial work.
Submissions for the pursuer
[53] Mr Young submitted that the second and third defenders’ pleas of prescription
should be repelled and that the associated averments should not be admitted to probation.
No new claims had been presented in the adjustments. Reference was made to N V Devos
Gebroeder v Sunderland Sportswear Ltd 1990 SC 291, per Lord President Hope at p 303;
Assuranceforengingen Skuld v International Oil Pollution Compensation Fund (No 2) 2000 SLT
1348, per Lord Gill at pp 1351L-1352B; and Safdar v Devlin 1995 SLT 530.
[54] Mr Young indicated that he did not quarrel with the approach which had been taken
by Lord Macfadyen in Classic House Developments Ltd v GD Lodge & Partners and Others,
supra, or by me in McClure Naismith LLP, Thistle Property Holding Company Limited v Harley
Haddow Partnership, supra. However, the circumstances in each of those cases had been
materially different from the present case. In Classic House Developments Ltd the obligation to
Page 35 ⇓
35
make reparation which the pursuer sought to enforce before the expiry of the quinquennium
had been in respect of failures of inspection; but after the expiry of the quinquennium it had
also sought for the first time to enforce an obligation to make reparation in respect of a
design failure. In McClure Naismith the amendments after the prescriptive period had
sought to enforce obligations to make reparation for breaches which were separate and
distinct from the breaches which had previously been founded upon. In Macleod v Sinclair
1981 SLT (Notes) 38 the claim made before the expiry of the prescriptive period had been in
respect of design failure, but after the expiry the pursuer had tried to introduce a claim
based on negligent advice.
[55] The claims against the second and third defenders had always been, and remained,
that TarmacDry was not suitable for use in the drainage system of the car park; that it did
not meet the design intent and would always have failed; and that it had become clogged
with detritus.
[56] So far as the second defender was concerned, its breaches had been said to be
breaches of clause 4 of the Appointment Agreement. So far as the third defender was
concerned, its breaches had been said to be breaches of clauses 2.1 and 2.17 of the Building
Contract. It had been tolerably clear from the pursuer’s averments that the complaint was
that each of these defenders ought not to have incorporated TarmacDry in their design as it
was unsuitable because it was not unusual for porous asphalt to lose its porosity because of
detritus filling the voids. The averments added by adjustment to the cases against the
second and third defenders merely provided some specification of the cases already made.
They did not introduce a new case or new cases. In the summons the pursuer had founded
upon the third defender’s failure to comply with the Employer’s Requirements
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(clause 2.17.1). The adjustments referring to paragraphs 1.010.05 and 4.09.02 of the
Developer’s Shell Specification merely gave specification of the particular respects in which
that provision had been breached. They were not the introduction of new claims to enforce
obligations to make reparation that had not been made before.
Decision and reasons: Prescription
[57] In my opinion the critical issue is whether any of the pursuer’s adjustments involve it
seeking to enforce obligations to make reparation which are different from the obligations to
make reparation which it sought to enforce in the summons (J G Martin Plant Hire ltd v
Ballantyne Copland France & Co, supra, per Lord Justice Clerk Ross at p 111A-B; Classic House
Developments Ltd v GD Lodge & Partners and Others, supra, per Lord Macfadyen at pp 3-6;
McClure Naismith LLP, Thistle Property Holding Company Limited v Harley Haddow Partnership,
supra, at paragraph 180). In my view N V Devos Gebroeder v Sunderland Sportswear Ltd, supra,
does not indicate otherwise. It is common ground that to the extent that the pursuer’s
adjustments do advance a different case the obligation concerned would have been
extinguished by prescription (because the summons would not have constituted a relevant
claim which interrupted the prescriptive period in relation to it) (1973 Act, sections 6 and
11).
[58] I propose to deal first with those of the averments added by adjustment which were
directed against both the second and third defenders.
[59] In my view, reading article 4 of the summons together with articles 9 and 10, and
article 6 together with articles 9 and 10, it is clear that the pursuer’s complaints were that
TarmacDry was unsuitable and ought not to have been used in the car park; and that its
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incorporation gave rise to problems of clogging with detritus, ponding, and areas of surface
failure. Viewed against that background, in my opinion the added averment that “… no
competent professional civil and structural engineer experienced in the carrying out of
works such as those carried out at the Premises and exercising reasonable skill and care
would have designed the drainage system in the car park to incorporate the use of
TarmacDry” does not represent an attempt to enforce a different and additional obligation
to make reparation from the obligations to make reparation which the pursuer sought to
enforce in the summons.
[60] There was no averment in the summons of the second and third defenders being in
breach of an obligation to warn the Clients and the Employer respectively. On the other
hand, the pursuer did aver that the product was unsuitable and it flagged up the problems
of clogging with detritus, loss of porosity, and ponding which had resulted from the use of
TarmacDry. In my opinion the warning case is not a substantially different complaint. The
essence of it is still that TarmacDry was unsuitable and ought not to have been used, and
that the problems with it ought to have been pointed out. In other words, that discussion of
the likely problems ought to have been part and parcel of the design conversation. In the
circumstances I am not persuaded that the averment added by adjustment represents a
materially different case from the case made in the summons, or that on any sensible view in
relying upon it the pursuer is now seeking to enforce a different obligation to make
reparation from the obligation to make reparation which it found upon in the summons.
[61] I turn then to the remaining points taken in relation to adjustments directed against
the third defender alone.
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[62] In the summons the pursuer averred that the third defender was in breach of
clause 2.17.1 of the Building Contract conditions, but it did not specify the particular
provisions of the Employer’s Requirements which had not been complied with. Once again,
such assistance as there was as to the nature of the breach or breaches involved was
contained in articles 9 and 10, viz that the TarmacDry was unsuitable; and that problems
with clogging, loss of porosity, ponding and surface damage were foreseeable, and had
indeed occurred.
[63] In the adjustments the pursuer specified two specific aspects of the Employer’s
Requirements which had not been complied with, paragraphs 1.01.05 and 4.09.02 of the
Developer’s Shell Specification. Paragraph 1.01.05 provided that the selection of building
materials must be made with the avoidance of regular cleaning as a criteria (sic), including
the normal deposit of dirt and grime. However, the problem with the deposit of detritus
was flagged up in the summons. It was not a new consideration raised for the first time in
the adjustments (and it was a response by the pursuer to the criticism added by the
defenders at adjustment that the pursuer failed to clean and maintain the surface properly).
Paragraph 4.09.02 required that the below ground drainage network should be designed to
withstand a 1 in 200 year storm event plus allowance for climate change such that no
ponding or temporary storage of flood water was visible at ground level. The problems
with ponding were flagged up in articles 9 and 10 of the summons. They were not
introduced as a new factor in the adjustments. I think it is tolerably clear from the
averments in the summons that the pursuer was complaining about a systemic problem
with ponding and that the drainage system was not meeting design requirements.
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[64] In my view, while the adjustments making reference to paragraphs 1.01.05 and
4.09.02 provide specification of the breaches of clause 2.17.1 which the pursuer pled in the
summons, they are not material changes to the bases of those cases. In my judgement they
do not involve the pursuer seeking to enforce obligations to make reparation that it had not
previously sought to enforce.
[65] Finally, in the adjustments the pursuer avers that the problems with the TarmacDry
were materially contributed to by poor workmanship when it was installed by the third
defender, and that that was in breach of its obligations under, inter alia, Clause 2.1 of the
Contract. In my opinion the averments in articles 9 and 10 of the summons did not flag up
any workmanship failure. On the contrary, the problems were clearly attributed to the fact
that the material was unsuitable for the use to which it was put. While there was said to be a
breach of the general obligation in clause 2.1, in my opinion it was plain from the averments
in articles 9 and 10 that the failure founded upon was a design breach rather than a breach
involving poor workmanship. Accordingly, I agree with Mr Jones that this aspect of the
adjustments is indeed an attempt to advance a new and different case after the expiry of the
prescriptive period. In my view it involves the pursuer seeking to enforce a different
obligation to make reparation from the obligations which it previously sought to enforce in
the summons.
[66] Before leaving this aspect of the case I should record that at about the same time as
the summons was called the pursuer intimated to the defenders an expert witness report
prepared by Professor John Knapton (no 6/7 of process), a civil engineer with expertise in
the design and construction of pavements such as the car park surface. In that report
Professor Knapton opined that the second and third defenders ought not to have used
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TarmacDry for the car park surface course because of foreseeable problems with clogging
and surface wear, and that they ought to have warned the Client of the likelihood of the
need for onerous maintenance if TarmacDry was used. He also concluded that during the
construction phase the third defender contaminated the TarmacDry and that this would
have contributed to the clogging which occurred.
[67] If the question which I had to determine had merely been whether prior to the expiry
of the quinqennium the pursuer had given fair notice to the third defender of the poor
workmanship case which it now seeks to advance I would have inclined to the view that it
had. However, here the material issue is a different one, namely whether the pursuer made
a relevant claim in appropriate proceedings within the quinquennium in respect of the
obligation which it now seeks to enforce (s 9(1)(a) of the 1973 Act), viz the obligation to make
reparation for the third defender’s alleged poor workmanship. In determining that question
it is the claims which were made in the pursuer’s averments prior to the expiry of the
quinqennium which are determinative. Professor Knapton’s report was not incorporated in
those averments. The report formed no part of those claims.
[68] In commercial actions parties are encouraged to make use of abbreviated pleadings.
The court discourages unnecessarily lengthy and unwieldy pleadings. Often it is sufficient –
in terms of fair notice – for the detail of a party’s position to be provided in an expert report
or reports. However, where issues of prescription may arise a pursuer should take care that
some reference is made in his pleadings to each obligation to make reparation which he
seeks to enforce. That can be done by incorporating a report brevitatis causa in his pleadings.
By that means, claims to enforce each of the obligations will be made in appropriate
proceedings. If, in response, a defender complains that he is not clear which parts of a
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report are being founded upon (cf Eadie Cairns v Programmed Maintenance Painting Ltd 1987
can be met by the pursuer identifying the relevant parts (either by making brief additional
averments or by otherwise providing satisfactory written clarification). It is not necessary in
order to satisfy the requirements of section 9(1)(a) that claims are stated at length in the
pleadings.
Disposal
[69] I shall put the case out by order (i) to discuss an appropriate interlocutor to give
effect to my decision; (ii) to discuss further procedure; and (iii) to consider any motions for
expenses which may be made.