Scottish Sheriff Court Decisions

Court Ref: A10/11

 

 

MR DENNIS TAYLOR v RICHARD A SANDEMAN

 

_________

 

 

 

Act: Burr, Advocate

 

Alt: Miss Ower, Advocate

 

 

 

 

FALKIRK, 5 October 2011

 

 

The Sheriff, having resumed consideration of the cause; ex proprio motu continues the cause to a hearing on a date to be afterwards fixed, reserving all questions of expenses meantime.

 

 

 

 

 

NOTE:

 

 

Introduction

 

 

[1] This is an action in which the pursuer sues a solicitor for damages on the ground of breach of contract (professional negligence). By interlocutor dated 4 May 2011 the matter was appointed to a debate on the defender's preliminary pleas. The defender's first plea-in-law is to the effect that the claim has prescribed. The second is a general plea to the relevancy and specification of the pursuer's averments. The debate concerned the issue of prescription.

 

[2] At the outset of the debate, Mr Burr on behalf of the pursuer sought to amend the Record at the bar by adding a general denial at the end of each of Articles 2 to 7 of Condescendence. There was no objection on behalf of the defender and I allowed the amendments. A fresh Record (forming No. 11 of process) was tendered incorporating the amendments.

 

Background

 

[3] In or around February 1997, the pursuer consulted the defender in relation to the sale of the pursuer's shop premises at 138 Grahams Road, Falkirk. The defender accepted the pursuer's instructions to act as his solicitor in the sale of the subjects and subsequent conveyancing. By missives dated 26^th February, 28^th March, 22^nd and 23^rd April 1997, the subjects were sold to a third party. A disposition was thereafter engrossed and signed by the pursuer. It was a matter of agreement for the purposes of the debate that the transaction settled in May 1997 at which time a signed disposition was delivered. It was thereafter registered in the Land Register of Scotland on 14 May 1997. The pursuer avers that the disposition did not reflect the subjects sold and included not only the shop premises but also other subjects belonging to the pursuer, lying to the west of the shop premises, and which he did not intend to sell. It is averred that the defender did not revise the disposition to reflect the subjects sold in terms of the missives. This is the basis for the subsequent averment of breach of contract on the part of the defender on the footing that he failed to exercise the degree of care and skill to be expected of a reasonably competent member of his profession. The purchaser refused to re-convey the additional ground to the pursuer and a subsequent action was raised against him in this court for rectification of the disposition. That action was warranted on 2 April 2002 and, following a proof before answer, decree ordering rectification was granted on 2 February 2006 on the basis that the missives did not comprehend the additional area to the west. The purchaser, the defender in that action, was found liable in the expenses of the proceedings but was subsequently sequestrated and it is averred that the pursuer has no prospect of recovery. A copy of the Judgement in the action for rectification is incorporated in the pleadings.

 

[4] As a result of the alleged breach of contract the pursuer avers that he suffered loss and damage comprising (1) the expenses of the action for rectification amounting to £25,984.76 (which figure encompasses both judicial expenses and also fees and outlays on a solicitor and client basis) and (2) the loss of the benefit of a sale of the ground wrongly included in the disposition such loss being estimated at £40,000. The total sum sued for is therefore £65,984.76. As to the second head of loss, the pursuer avers that he was in the course of selling the ground lying to the west to another party and a copy of an offer to purchase dated 28 February 1997 at a price of £28,000 is produced and incorporated into the pleadings. It is further averred that when that other party discovered that the pursuer did not have title, he did not proceed with the purchase. The loss is said to be the loss of the benefit of that sale plus the interest that the pursuer would have accrued on the sale price.

 

[5] In Answer 2, the following averments appear in support of the defender's first plea-in-law (prescription):

 

"Explained and averred that the transaction for the sale/purchase of the Pursuer's property settled in or around May 1997. Any negligence on the part of the Defender, which is denied, would have occurred at or by the time of settlement in May 1997. In terms of Section 11 of the Prescription and Limitation (Scotland) Act 1973, any obligation to make reparation in relation to the subject matter of this action would have become enforceable in or around May 1997. Given the lapse of time between the Pursuer's claim becoming enforceable and the raising of this action, the Pursuer's claim has prescribed."

 

As will become clear, the argument on behalf of the defender was developed in the course of the debate to the effect that the loss arising from any breach of duty occurred in or around May 1997 or by April 2002 at the latest.

Statutory Provisions

 

[6] The relevant provisions of the 1973 Act are as follows:

 

"6 Extinction of obligations by prescriptive periods of five years. S

(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, and

(b)without the subsistence of the obligation having been relevantly acknowledged,

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 any kind specified in Schedule 2 to this Act is a reference to the date specified in that Schedule in relation to obligations of that kind, and in relation to an obligation of any other kind is a reference to the date when the obligation became enforceable...

 

11 Obligations to make reparation.S

(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...."

 

 

[7] It was a matter of agreement that, as a claim for reparation through breach of contract, the obligation in this case was one to which the prescriptive period of five years applied under section 6 and that the "appropriate date" from which the prescriptive period ran was, in terms of section 6(3), the date on which the obligation became "enforceable" as defined by section 11(1). It was also conceded on behalf of the pursuer that there were no averments bringing section 11(3) in to play so as to delay the commencement of the prescriptive period under that sub-section. Accordingly, the argument was focused around section 11(1). As noted above, that provides that an obligation is regarded as becoming enforceable "... on the date when the loss, injury or damage occurred." It was a matter of agreement that, in line with the authorities, this provision required that there be a concurrence of injuria (wrong) and damnum (loss) to trigger the commencement of the period of short negative prescription. The central issue at debate was when, on the pleadings, the loss occurred, thus determining the point of concurrence.

 

Submissions on behalf of the defender

 

[8] It was submitted by Miss Ower that the prescriptive period began to run in May 1997 when the transaction for the sale the pursuer's shop premises (which wrongly included the ground to the west of the premises) was settled. At that time, the breach of duty in failing to revise the disposition to reflect the subjects, as contemplated in the missives, occurred. At that time, a loss was sustained, notwithstanding that it may not have been capable of being fully quantified at that stage. Accordingly, there was a concurrence of injuria and damnum (as required by section 11(1)) in May1997 and the claim prescribed in May 2002. Counsel presented an alternative argument to the effect that, if she wrong about that, then the latest date that the obligation could be said to have been enforceable was in April 2002, when the action for rectification was raised and so the claim prescribed in April 2007 at the latest. She submitted that no relevant claim had been made until January 2011 when this action was raised. In support of her argument, she referred to Dunlop v McGowans 1980 SC (HL) 73; 1979 SC 22; Santander UK plc v Allied Surveyors Scotland plc [2011] CSOH 13; AMN Group Ltd v Gilcomston North Ltd 2008 SLT 835; Pelagic Freezing (Scotland) Ltd v Lovie Construction Ltd, Grontmij Group Ltd [2010] CSOH 145 and Prescription and Limitation by D. Johnston (1999).

 

[9] Miss Ower's primary submission was that, not only did the injuria occur in May 1997, but the loss (or damnum) was sustained at that time. It was at this point that the pursuer lost the benefit of the ground to the west of the shop premises including the benefit of the sale to a third party purchaser who had made an offer of £28,000. It was submitted that there was a single obligation to make reparation which was indivisible and only one action could be brought for the purpose of enforcing it. In Dunlop v McGowans, the defenders were a firm of solicitors who acted for the pursuer. They failed timeously to serve a notice to quit i.e. 40 days before Whitsunday 1971, with the result that the tenant was able to continue in occupation of leased premises for a further year. An action was later raised on 3^rd November 1976 against the solicitors based on negligence and breach of contract. It was argued in their defence that any obligation to make reparation had been extinguished by the quinquennial prescription the terminus quo of the prescriptive period being at the latest Whitsunday 1971 when the client suffered loss, injury or damage. For the pursuer in that case, it was maintained inter alia that the prescriptive period started to run only when loss actually occurred, thus each item of loss arising after 3^rd November 1971 was unaffected by prescription. Lord Keith of Kinkel said (at page 81):

 

"The language of section 11 (1) affords no warrant for splitting up, in the manner and to the effect contended for, the loss, injury or damage caused by an act, neglect or default. An obligation to make reparation for such loss, injury and damage is a single and indivisible obligation, and one action only may be prosecuted for enforcing it. The right to raise such an action accrues when injuria concurs with damnum. Some interval of time may elapse between the two, and it appears to me that section 11 (1) does no more than to recognise this possibility and make it clear that in such circumstances time is to run from the date when damnum results, not from the earlier date of injuria. The words "loss, injury and damage" in the last line of the subsection refer back to the same words in the earlier part and indicate nothing more than the subject-matter of the single and indivisible obligation to make reparation. In the present case the loss, injury and damage flowing from the respondents' negligent omission occurred at Whitsunday 1971 when the appellant, but for that omission, would have obtained vacant possession of the premises. A quantification of the loss was capable of being made at that date, notwithstanding that it would then necessarily have had to be made on the basis of estimation, and that greater accuracy might have been capable of being achieved, in the light of supervening events, at a later date. Whitsunday 1971 is therefore the date at which the prescriptive period began to run."

 

In the Opinion of Lord Wheatley in the Inner House, he said (while narrating the submissions of by counsel for the defenders at page 31):

 

"The crucial subsection is 11 (1), which provides that for the purposes of section 6 the obligation shall be regarded as having become enforceable on the date when the loss injury or damage occurred. This determines the point from which the prescriptive period starts to run. "Enforceable" means that there has been created a legal right which can be enforced through the processes of the law. That means that a point has to be reached when there is a concurrence of injuria and damnum . The key question thereby becomes "what is damnum ?" Defenders' counsel submitted that it was the invasion of the pursuer's legal right, and this involved both his loss of the legal right to recover possession of the premises and the practical results which flowed therefrom, some of which might be immediate, such as the right to enter the premises and do what he liked with them. There could only be one point of concurrence between the injuria and the damnum, and that was the point when any form of damnum was sustained following the injuria . That fixed the terminus a quo . There might be other losses sustained which were the natural and probable results of the breach, but these only related to the damages recoverable as a consequence of it and did not constitute a new "loss" within the meaning of the subsection so as to constitute a new terminus a quo as each item of loss occurred."

 

[10] In line with the foregoing, it was submitted by Miss Ower that the point of concurrence between the injuria and the damnum was the point when any form of damnum was sustained following the injuria. In this case, the claim was capable of quantification in May 1997. Not only was there a loss associated with the loss of the benefit of the sale of the land, it was forseeable that there would be expenses incurred in attempting to retrieve the situation, such as judicial expenses and expenses on a solicitor and client basis, particularly when the purchaser in the transaction refused to reconvey the ground. Pausing there, I was not told when there was a refusal to reconvey, but I think it reasonable to assume that that it was prior to the raising of the action for rectification against the purchaser in April 2002 and there was no suggestion by either counsel to the contrary. It was submitted that at at May 2007, there was a cause of action against the defender for the loss of his property based on it value and that subsequent attempts to recover it were to be regarded as attempts to mitigate loss.

 

[11] Counsel also referred to the decision of Morag Wise, QC, sitting as a Temporary Judge, in Santander. That was an action for damages at the instance of a the successors to the rights and claims of a bank who extended a loan on the basis of a valuation provided by the defenders. At paragraph 17 of the Opinion in that case reference is made to an agreed position that "the proper approach was to say that the lender suffered loss and damage only when it was possible to say that he was on balance worse off as a result of the negligence".

 

The submission by Miss Ower was that the pursuer was worse off as a result of the breach of contract at the time more than five years before the raising of this action.

[12] I was also referred by counsel to a passage in AMN Group Ltd at paragraph 58 where Lord Emslie discussed the awareness of injuria. However, I pause to note that his observations were in the context of section 11(3) of the Act which is not in issue here and it is difficult to see the relevance here. The same applies to the references made to paragraphs 74, 110 and 111 of the Opinion of Lord Menzies in Pelagic Freezing (Scotland) Ltd.

[13] In anticipation of it being founded upon against her, Miss Ower referred to the case of Kusz, a decision of the Inner House. In that case, The pursuers had instructed the defenders, a firm of solicitors, to raise an action against a builder for breach of contract and to arrest and inhibit on the dependence in April 1995. They were concerned that the defender would sell his dwellinghouse and relocate to Greece. At that time the builder was the proprietor of heritable property but some months later, on 26 July 1995, he conveyed the property to his wife. The action was not raised until 9 October 1996 and inhibition was not carried out until some time later by which time the builder was not the proprietor of any heritable property in Scotland. In due course decree by default was obtained against the builder but could not be enforced. The pursuers raised an action against the defenders for damages on 14 May 2004 and the defenders tabled a plea of prescription, contending that any obligation incumbent on them to make reparation to the pursuers had been extinguished. They contended that the obligation to make reparation became enforceable on or about 26 July 1995. After a debate before the sheriff the defenders' plea of prescription was repelled and the parties were allowed a proof before answer. The defenders appealed to the sheriff principal who allowed the appeal and dismissed the action. The pursuers appealed to the Court of Session. In allowing the appeal, it was held that as there was no offer to prove that in the particular circumstances the claim against the builder had a value as at July 1995 - either because the builder would at that time have prepared to make an offer in settlement or that a third party would have been prepared to make a payment for an assignment of the pursuer's claim - and in the absence of such averments of that kind no proper basis was laid for the contention that loss and damage was sustained either by loss of security or by the loss of any opportunity and further, in the absence of a basis for the claim itself having a value, it could not have an increased value had an inhibition been put in place.

The Lord President said (at page 31):

"...[14] The hypothesis upon which this debate proceeds is that the pursuers have a relevant case against their former solicitors. The latter have raised a plea that that claim has been extinguished by prescription. It is for them to make good that plea...[21] We were also referred to a number of cases from England. There the issue, under the Limitation Act 1980 was whether a cause of action had accrued by a particular date or event. That in turn depended on whether [actual] damage had by that date been sustained...The distinction was drawn between losses which were, at the date in question, contingent and those which involved the sustaining of a measurable loss at that date quite apart from a contingent loss which threatened at a later date (see Law Society v Sephton & Co, per Lord Hoffmann at para 17). The latter would trigger the limitation; the former would not. The cases...were analysed by Lord Mance in Law Society v Sephton & Co at paragraph 67. For the reasons he gives each of those involved a person's legal position having been altered 'to his immediate, measurable economic disadvantage..."

 

Miss Ower submitted, adopting some of the language above, that the pursuer had sustained an immediate, measureable loss relating to the value of the ground at the time of the settlement of the transaction in May 1997, and certainly by the time there was a refusal to re-convey the ground, which must have been prior to the raising of the action for rectification in April 2002, and that any subsequent recovery was to be regarded as mitigation of that loss.

 

[14] As to the onus of proof, Counsel argued that the passage in Kusz at paragraph 14 was not the ratio of the decision and that there was no onus on the defenders. She referred to Pelagic Freezing (Scotland) Ltd, from paragraph 86 where Lord Menzies referred to the divergence of opinion in the Outer House on the question of onus and came the view that the onus of proving prescription rested with the pursuers. At paragraph 87, he referred to the decision of Lord Abernethy in Strathclyde Regional Council v W A Fairhurst & Partners (reported 1997 SLT 658), who held the general rule to be that the onus rested on the party alleging the affirmative, the affirmative being that the obligation had subsisted for the prescriptive period and that the onus was on the defenders to aver and, if necessary, prove facts and circumstances to justify their plea. In that case, Lord Abernethy, applying the test in Jamieson v Jamieson 1952 SC (HL) 44 held that it could not be said on the pleadings that the pursuers would necessarily fail. The arguments were presented at a debate on the procedure roll. He said (at page 663): "...unless the matter is clear on the face of the pleadings, it is for the defenders not only to take the plea of prescription in terms of section 6 but also to aver and if necessary, prove facts and circumstances which justify it...".

 

However, in Pelagic Lord Menzies went on (at para. 94):

 

"In the present case, the pursuers come to court asserting that they have an existing legal right against the defenders. The defenders deny the existence of that legal right by raising the issue of its extinction by prescription. Viewed in this light, I consider that the burden of satisfying the court that they have a legal right of action against the defenders rests with the pursuers.

[95] ...If, in a clear case, the court can have regard ex proprio motu to the extinction of an obligation meaning that there is no legal right in existence, I find it difficult to understand why (in a clear or unclear case) the burden of proving that there is no legal right in existence should rest with the defenders. I agree with the view expressed in Richardson v Quercus that once the question of prescription has been raised it is for the pursuer to prove that his title to sue has been preserved."

 

The reference to Richardson v Quercus was to Lord Wheatley's decision in the Outer House (unreported, 25 March 1997). The same approach was preferred by the court in Santander at paragraph 34.

 

[15] Miss Ower submitted that, there was no onus on the defender in this case, but that in any event the matter was clear on the face of the pleadings. The claim had prescribed. I was invited to sustain the prescription plea. That plea sought (and still seeks) decree of absolvitor and not dismissal. When I expressed the view that I might have some difficulty sustaining a plea in such terms at debate (if I was to favour the defender) Miss Ower contended that I could, as an alternative, deal with the matter under reference to the defender's second plea-in-law (general relevancy and specification). Although, in the course of the debate, she sought, and was (without objection) granted leave to amend the prescription plea to accord with her submissions on the timing of the prescriptive period, she did not move to amend the plea to seek dismissal.

 

Submissions on behalf of the pursuer

 

[16] Mr Burr on behalf of the pursuer invited me to repel the defender's first and second pleas-in-law and allow a proof.

 

[17] He submitted that the essential facts for the purposes of the issue at debate were not in dispute. He accepted that there were no averments in support of an argument under section 11(3) of the Act and that the focus was therefore on section 6 and section 11(1). He accepted that any obligation would become enforceable when there was a concurrence of injuria and damnum. Any breach of contract represented the injuria and any loss represented the damnum. The critical issue was when the point of concurrence occurred in this case. He accepted the law as stated in Dunlop v McGowans and in particular the speech of Lord Keith (noted above) under reference to Johnston at paragraph 2.09. He also referred to Osborne & Hunter v Hardie Caldwell 1999 SLT 153, a decision of the Inner House. That case concerned a partner in a firm of chartered accountants who had advised a limited company, of which he was a director, to lend a sum of money to, and act as guarantors for, a third party. The third party did not repay the loan and the company had to make payment to a bank in terms of the guarantee. The company sued the accountants, alleging professional negligence. The accountants argued that the action, being one of reparation to which the quinquennial prescriptive period applied, was time barred, on the basis that the action was not raised until 24 January 1996 and concurrence of injuria and damnum had been not later than the first payment of the loan moneys, namely April 1990, which was when the company had acted to their disadvantage. The Lord Ordinary repelled this plea on the basis that the concurrence of injuria and damnum, in relation to the pursuers' loan, could not take place until there was a failure to repay the loan, and in relation to the guarantee, until it was called up. The defenders reclaimed. The Inner House held (1) that every case depended on its own circumstances, and on the pursuers' averments they should never have been advised to lend to the third party, so that prima facie the concurrence of iniuria and damnum in relation to the loan was when the money had been lent, as that was when the company suffered material disadvantage. However, the pursuers were allowed a proof before answer on their averments under section 11(3). In delivering the Opinion of the Court the Lord Justice Clerk (at page 156) said: "It may well be that it is normally the case that, until there is default in the repayment of a loan, it cannot be shown that damnum occurred. However, each case depends on its particular circumstances."

 

[18] Likewise, Mr Burr submitted that each case must depend on its own circumstances and that the authorities founded upon by counsel for the defender illustrated the point. In this case, it had not been demonstrated that as at May 1997, there had occurred a loss of the type required to constitute damnum for purposes of prescription. At that time there had been no reasonable economic loss. He developed that approach under reference to Santander and in particular the submissions on behalf of the pursuer in that case (at paragraph 18) that while it was accepted that there was a distinction between loss and measure of loss, the loss had to be a "meaningful loss in the sense of a loss that can be sued for". He submitted that in May 1997, there was no such loss. There was no loss of unrecovered expenses of the action for rectification, which may not have been required at that stage. Such an action may not have been defended. It may have been unsuccessful or it may have turned out in the way it did. The sequestration of the purchaser and subsequent loss of irrecoverable judicial expenses did not make for a meaningful loss from the pursuer's perspective as at May 1997.

 

[19] Mr Burr's submission was that the sequestration of the purchaser was therefore significant, but that the earliest date at which a loss could be said to have arisen was the date of the judgement in the action for rectification. He submitted (under reference to Pelagic at paragraph 97) that a pragmatic approach was required and that I should adopt such an approach here and that, taking such a view, the losses in relation to judicial expenses could not be said to have arisen until there had been unsuccessful recovery from the purchaser and at the earliest 2 February 2006 (the date of decree in the rectification action).

 

[20] As to the alleged loss of the sale of ground wrongly disponed to the purchaser, Mr Burr submitted that the averments (in Art. 6 of Condescendence) did not fully illustrate what was being sought under this head, namely £40,000 in damages. It could not be said that there was a loss which included loss of the value of the property. He also submitted that the defender's averments relating to prescription occurred in Answer 2 in answer to factual averments, including averments regarding judicial expenses, the purchaser's sequestration and the lack of prospect of recovery, but not in answer to the averments of loss of the benefit of the sale price of the land, which occurred later in Art. 6. Therefore, there plea was not properly taken in relation to that aspect of loss and that took us back to the loss relating to unrecoverable expenses which were not foreseeable.

 

[21] Mr Burr returned to the case of Kusz and submitted, firstly, that it was instructive as it involved solicitor's negligence and secondly, that it demonstrated that the onus of establishing that a claim had prescribed lay with the defender. I have already mentioned the facts of the case. In that case, it was been argued for the pursuers (at paragraph 9) that the concurrence of injuria and damnum had not occurred until the date when decree had been obtained against the builder and the pursuers had been unable to obtain satisfaction of it. Until then, there was no certainty that any loss had occurred as a result of the defenders' negligence. It had been submitted that the onus of averring and proving prescription rested with the defenders and there were no relevant or sufficiently specific averments in support of their plea. In that case, the court held that there was no offer to prove that the claim against the builder had a value at the time argued for by the defenders. Mr Burr reiterated that in the instant case there were no averments directed at the loss relating to the loss of benefit of sale and that, under reference to paragraph 14 of Kusz, the onus was on the defender to make good the plea. Under reference to paragraph 21 of the decision in that case (noted above) he accepted the distinction between contingent loss on the one hand and measurable loss on the other. The latter would trigger the prescriptive period. He submitted however that the relevant loss here was contingent upon the outcome of the action for rectification when decree had been granted.

 

[22] Mr Burr renewed his motion to repel the defender's first plea-in-law (prescription) and second plea-in-law (general relevancy), and thereafter to allow a proof.

 

[23] In a brief reply on behalf of the defender, Miss Ower submitted that the loss of benefit relating to the land was a meaningful at the time of the original transaction and referred to the loss of the sale to the third party purchaser. As to the pleading point, she referred to what was said by Lord Emslie in AMN Group Ltd at paragraph 28, where he indicated that he was not prepared to hold, as a matter of principle, "that prescription can be elided by the manner in which a given case is pled."

 

Discussion

[24] It was accepted by counsel for both parties that the issue of prescription could be dealt with at debate without the necessity of an enquiry into the facts. In this context, it should be noted that the first plea-in-law for the defender (prescription) seeks absolvitor, a plea I would not sustain in its present form if I were to favour the defender's position. As the pleadings stand, the only plea that is pertinent at the stage of debate is the defender's second plea-in-law which is a general plea directed at the relevancy and specification of the pursuer's averments.

 

[25] It should also be noted that the averments in Answer 2 (reproduced in para. [5] of this Note) raising the issue of prescription are limited to suggesting that the obligation to make reparation became enforceable in or around May 1997 on the basis that that was when any "negligence" occurred and this is in line with the argument set out in the Rule 22 Note lodged on behalf of the defender. No reference is made to the issue of loss and in particular the central issue of when there was a concurrence of injuria and damnum. However, no issue was taken on behalf of the pursuer on that account and argument was joined between parties on the central issue. Further, there was no opposition to the motion on behalf of the pursuer for leave to amend the prescription plea with a view to focusing the argument (based on the occurrence of loss) that the obligation to make reparation was extinguished in or about May 2002 or by April 2007 at the latest.

 

[26] In order for the defender to succeed, I require to be satisfied on the basis of the pleadings that the pursuer will necessarily fail (Jamieson v Jamieson) and in the context of prescription, the matter requires to be clear on the face of the pleadings (Strathclyde Regional Council v Fairhurst & Partners). Approaching the matter in that way, it does not seem to me that a consideration of onus is of particular assistance at this stage.

 

[27] The issue in this case is a sharp one and involves considering when in point of time the pursuer sustained loss as a result of any breach of duty on the part of the defender. The terms of the statute have already been noted. Thereafter, the starting point is Dunlop v McGowans. Passages from the speech of Lord Keith in the House of Lords and the opinion of Lord Wheatley in the Inner House have already been noted. In delivering his opinion Lord Wheatley said (at page 33):

 

"...The phrase "loss injury and damage" is a phrase commonly used to to comrehend the various types of loss which may be sustained as a result of breach of a legal duty or obligation. It covers all kinds of damnum. As soon as any form of loss, injury or damage occurs following a breach of legal duty or obligation (the injuria) the concurrence takes place. There can only be one point of concurrence and this is it. There may be further loss, injury and/or damage which arises consequential upon and the natural and probable result of that breach, but these do not constitute separate breaches so as to give rise to the right to raise separate actions therefor."

 

The passage was not disapproved in the House of Lords. So the crucial point is when any form of loss has been sustained. Other losses stemming from a wrong may emerge in the fullness of time, but they do not operate to delay the commencement of prescription. The decision in the House of Lords made clear the single and indivisible nature of the "loss, injury and damage" referred to in section 11(1). The decision also suggests that, provided quantification of loss can be made, albeit on the basis of an estimate, then the commencement of the prescriptive period is not delayed.

 

[28] That approach was followed in Beard v Beveridge, Herd & Sandilands 1990 SLT 609, an action founding upon the defenders' failure to secure a lease with a properly drawn and binding rent review clause. In delivering his opinion, Lord Cameron of Lochbroom said (at page 611):

 

"I agree with counsel for the defenders that if the pursuers had discovered the defect in the lease immediately after its execution, they could then have raised an action of reparation on the same ground of negligence as is pleaded in this action and have sought damages, albeit the damages might require to have been calculated on the basis of estimation and without the accuracy that has become possible in the present pleadings in the light of supervening events. Thus, for instance, they might have been calculated by reference to the difference in value which the lease as drafted and executed would have had upon assignation of the landlord's interest for money's worth as compared with a lease with an operable rent review clause of the nature instructed by the pursuers. Accordingly, in my opinion, the execution of the lease was the occurrence which gave rise to the loss, injury and damage flowing from the negligent act of the drafter and is thus the equivalent of the failure to obtain vacant possession by Whitsunday 1971 in Dunlop v McGowans. An analogy may be found in the example cited in the Scottish Law Commission's Report on Prescription and Limitation of Actions (Latent Damage and other related issues),no. 122 at para. 3.6, where reference is made to the case of the client who acquires, as a result of his solicitor's negligence, a faulty title to his house which is not discovered until he attempts to sell the property more than 20 years later, and where the obligation to make reparation on the part of the negligent solicitor would have prescribed."

 

That case concerned twenty year prescription under section 7 of the 1973 Act but the crucial provision was section 11(1) and it serves to illustrate that, provided an estimate of loss can be made, then that is sufficient to constitute damnum for the purposes of the commencement of the prescriptive period. This is not inconsistent with the observations of Lord Mance in Law Society v Sefton & Co (a firm) 2006 AC 543 at paragraph 67 where he refers in the context of limitation to a person's legal position having been altered "to his immediate, measureable economic disadvantage" [my emphasis].

 

[29] I do not think it particularly helpful to consider whether or when a party is on balance "worse off" as suggested under reference to Santander (paragraph 17). That appears to be a reference to the speech of Lord Hoffman in Law Society v Sefton & Co (a firm) (at page 551), when discussing transactions in which there are benefits (covenant for repayment and security) as well as burdens (payment of the loan) and where the measure of damages is the extent to which the lender is worse off than he would have been if he had not entered into the transaction.

 

[30] In Kusz (at paragraph 21) the Lord President referred to a line of authority in England where a distinction was drawn between losses which are contingent and those which involved the sustaining of a measureable loss at the relevant date quite apart from a contingent loss which threatened at a later date, the latter triggering the limitation period and the former not.

 

[31] The English authorities therefore suggest (albeit in the context of limitation of actions) that the loss must be immediate, in the sense that it is not wholly contingent, and measureable, in the sense that an estimate of value may be made.

 

[32] It is also clear from the authorities (including Osborne & Hunter) that each case is to be decided on its own facts. I accept that, to a degree, a pragmatic approach is to be adopted although that would not include stretching the limits of what or what not may properly be regarded as the occurrence of a loss.

 

[33] Applying the approach outlined above, I find it difficult to conceive that a loss had not occurred as at May 1997 when the disposition was delivered to the purchaser containing, in error, the additional land not contemplated by the missives. At that time, the pursuer lost the beneficial use of the land, and more immediately, on his averments, the loss of a sale to a third party which did not proceed when the purchaser discovered the pursuer could not confer a title. It may be that the loss at that stage could not be quantified with precision and that a complete assessment of damages could not be carried out until the outcome of steps taken in an attempt to retrieve the position. However, I agree with counsel for the defender that such steps should properly be regarded as being an attempt to mitigate loss rather than pointing to the idea that there might be no loss at all or that loss was contingent on the outcome of the action for rectification. Taken pro veritate, the pursuer avers a loss which prima facie was immediate. The loss at that stage would not be the value of the land, but would (as the pursuer avers) be the loss of the benefit of the sale price and it would in my view be legitimate to make an assessment of damages based upon that premise. That is what the pursuer offers to prove.

 

[34] If the purchaser had agreed to re-convey the land right away, there may have been minimal loss, but that does not appear to have happened here. An action for rectification was required. At the very latest, in my view, a measureable loss occurred when the purchaser refused to re-convey the land. Neither counsel were able to inform me of the date when this occurred, but, as I indicated earlier, it seems reasonable to assume that this was at some point after the settlement of the transaction in May 1997 and at the latest April 2002 when the action for rectification was raised. On that view, prescription operated to extinguish the obligation in or around May 2002 and in any event by April 2007 at the latest.

 

[35] There is in my view no warrant for delaying the commencement of the prescriptive period to await the outcome of the action for rectification. I have already indicated that the loss of the sale constituted an immediate and measurable loss. Although comprising a separate head of loss on the pleadings, the expenses of the action for rectification were a natural and probable result of the defender's breach of duty (Lord Wheatley in Dunlop v McGowans) and were in my view foreseeable at an early stage, particularly when there was a refusal on the part of the purchaser to re-convey the ground. If contingent in the sense that they might not be recoverable (and that would only apply to the judicial expenses portion and not the solicitor and client element which would have to be borne), then that was only part of the claim, the other parts being measureable.

 

[36] The case of Kusz is clearly distinguishable on the facts and I do not consider that it would support the proposition that there was, on the averments in this case, no value attributed to the loss sustained by the pursuer prior to the outcome of the action of rectification. It seems to me that there was a cause of action against the present defender at an early stage and that an action could have been raised by April 2002, the loss being measureable by then at the latest. If necessary, such proceedings could have been sisted pending the outcome of the action for rectification, after which, no doubt, loss could have been assessed with greater accuracy.

 

[37] I have accordingly come to the view that, on the face of the pursuer's averments, the claim in this case has prescribed. Put another way, even if all the pursuer's averments are proved, he would in my view necessarily fail having regard to the issue of prescription.

 

[38] As to the pleading point raised by Mr Burr on behalf of the pursuer, I do not consider that the court is restricted, in considering the issue of prescription, to the pursuer's averments in relation to the expenses of the action of rectification and is precluded from a consideration of the pursuer's averments of loss relating to loss of benefit of the sale to the third party purchaser. I do not think that an issue of prescription, once raised, can be elided in this way, particularly where it appears that the court may have regard to the issue ex proprio motu (D. Johnston at paragraph 20.11).

Conclusion

 

[39] For the foregoing reasons, I have come to the conclusion that the obligation to make reparation was extinguished by short negative prescription in or around May 1997 or in any event by April 2002 at the latest. No relevant claim was made until the raising of the present action in January 2011. I have accordingly come to the conclusion that the action should be dismissed.

 

[40] I have decided to put the case out for a hearing for formal disposal in terms of pleas-in-law at which time I will also deal with all matters of expenses, which are accordingly reserved meantime.

 

[41] As regards formal disposal, I am of the view that the issue of prescription at the stage of debate is more appropriately dealt with by reference to a prescription plea rather than a general relevancy and specification plea, and as there was no suggestion that there need be an enquiry in to the facts to determine the issue, I will give those acting for the defender the opportunity to amend that plea so as to seek dismissal rather than absolvitor.