JOHN G SIBBALD AND SON LTD AGAINST
DOUGLAS JOHNSTON AND THE FIRM OF DMJ ASSOCIATES
| OUTER HOUSE, COURT OF SESSION |
| | [2014] CSOH 94 |
| CA44/13 | OPINION OF LORD TYRE in the cause JOHN G SIBBALD & SON LIMITED Pursuer; against DOUGLAS JOHNSTON First Defender; and THE FIRM OF DMJ ASSOCIATES Second Defenders: ___________ |
Pursuer: Mohammed; McClure Naismith LLP
Defender: Duthie; Simpson & Marwick
3 June 2014
Introduction
[1] The pursuer is a development company. The second defenders are a firm of consulting engineers. This action concerns a contract to design a vehicular bridge within the Limefield Estate, West Calder, West Lothian. By an agreement dated 23 April 2003, the pursuer appointed the first defender, in his capacity as a partner or sole principal of the second defenders, to provide various professional services including the following:
“Design and specify: the new bridge over Harburn Water, repair works to old bridge as agreed with Highways, all roads (to be adopted and private), servicing provision for gas/water/electricity/drainage/telecom, pumping station. All to comply with planning requirements, Road Construction Consent, Building Control, Insurers, NHBC and all other interested parties.”
[2] The bridge was constructed in about the early part of 2004. The pursuer avers that the design of the bridge was defective in certain significant respects. On 28 June 2004, West Lothian Council (“WLC”) wrote to the pursuer expressing a number of concerns regarding both the design and the construction of the bridge, including the adequacy of the load bearing strip. On 9 July 2004, WLC wrote to the defenders stating that the bridge as constructed differed significantly from the design drawing that had previously been approved by them. Investigations were carried out in the course of the following year and, on 20 May 2005, WLC wrote to the pursuer listing outstanding issues including matters related to design, and advising that the bridge would not be adopted by the Council unless the issues raised were dealt with satisfactorily.
[3] The pursuer now avers that it has suffered loss and damage as a consequence of various breaches of duty by the defenders. In summary, those breaches are said to be:
- failure to obtain the consent of WLC in respect of the bridge design and to have the design certificate and check certificate approved and countersigned by WLC;
- failure to inform the pursuer that the bridge was being constructed without approval of the design by WLC;
- failure to exercise reasonable skill, care and diligence in designing the bridge, and in particular failure to specify an adequate load bearing strip;
- failure to ensure that the bridge was constructed to adoptable standard.
The losses which the pursuer claims to have sustained as a consequence of these alleged failures include the cost of remedial works, the cost of temporary diversion of services using the bridge, the cost of re-submission of planning applications, and interest incurred on borrowings due to the pursuer having been unable to build and sell properties within the development because of the non-adoption of the bridge.
[4] The present action was raised on 13 March 2013. The defenders deny that they are in breach of any duty owed to the pursuer and submit, in any event, that any obligation incumbent upon them to make reparation for breach of contractual duties owed to the pursuer has been extinguished by operation of prescription under section 6 of the Prescription and Limitation (Scotland) Act 1973, the pursuer having been aware that there was an issue regarding the design of the bridge since June 2004. The case came before me for debate of the defenders’ preliminary plea of prescription.
Argument for the pursuer
[5] Section 11(1) of the 1973 Act provides that any obligation arising inter alia from breach of contract shall be regarded as having become enforceable on the date when the loss, injury or damage occurred. On behalf of the pursuer it was submitted that the commencement of the prescriptive period was delayed in the present case by the operation of section 11(2), which provides as follows:
“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.”
This case, it was submitted, was concerned with a continuing neglect or default which had not yet ceased. The defenders were under a continuing duty to review the design of the bridge, such a duty having been re-activated when problems with the design were intimated to them in 2004. Reference was made to London Borough of Merton v Lowe (1981) 18 BLR 130 (in particular to the views of the trial judge, HH Judge Stabb QC, quoted in a commentary to the Court of Appeal decision at 133); University of Glasgow v Whitfield (1988) 42 BLR 66 (HH Judge Bowsher QC at 77); and New Islington and Hackney Housing Association Ltd v Pollard Thomas & Edwards Ltd [2001] PNLR 515 (Dyson J at paragraphs 16-18 and 23-25). The duty of review continued even after practical completion (on this point it was submitted that I should prefer the view of Judge Stabb QC in London Borough of Merton v Low to the contrary view of Dyson J in the New Islington and Hackney case). It was not suggested by either counsel that anything turned upon the fact that the present case concerns a design by a consulting engineer whereas the cases cited concerned professional duties of architects.
[6] In the present case, although practical completion had been achieved, the duty to review which had been re-activated when the defenders were made aware of the alleged defects in the design of the bridge continued until the issuing of the final certificate. That had not yet occurred. The relevant breach of duty was one of omission, namely the failure to review the design. That was a continuing omission. The defenders continued to be in breach of their duty of review and accordingly the claim had not prescribed.
Argument for the defenders
[7] On behalf of the defenders, it was submitted that section 11(2) had no application in the circumstances of the case. A distinction had to be drawn between a continuing duty on the one hand and a continuing breach of duty on the other. It was necessary to identify precisely what breach or breaches of duty were founded upon by the pursuer as having caused the loss claimed to have been sustained: see e.g. Johnston v Scottish Ministers [2005] CSOH 68, Lady Dorrian at paragraph 17; Warren James (Jewellers) Ltd v Overgate GP Ltd [2010] CSOH 57, Lord Glennie at paragraphs 5-6. In the present case the breaches of duty relied upon were not continuing duties but completed acts and omissions, i.e. negligent design and failure to obtain local authority approval. Any such acts and omissions must have occurred by the time the bridge was constructed in 2004. Esto there was a duty of review which had been re-activated when problems were intimated and which had survived beyond the date of practical completion, there was no correlation between that duty and the losses claimed to have been sustained. After practical completion, the defenders could do no more than review the design and disclose any defects discovered to the pursuer. In assessing whether claims arising out of the original breaches of duty had prescribed, it did not assist the pursuer to found upon a different and (in this case) subsequent alleged breach of duty which was not causative of the losses averred to have been sustained.
Discussion
[8] In my opinion, the submissions on behalf of the defenders are clearly to be preferred. I accept, on the basis of the English authorities cited by counsel for the pursuer, that a continuing duty to review a design may subsist – or be re-activated – where there is concern regarding the adequacy of the design. I do not find it necessary to express any view on whether such a duty could survive the achievement of practical completion, but I accept that, for so long as such a duty subsists and remains unfulfilled, there may be a continuing neglect or default capable of falling within section 11(2). But that, in my view, is beside the point. As Lady Dorrian and Lord Glennie respectively observed in the cases to which I was referred, the first step is to identify the act, neglect or default that is founded upon by the pursuer and from which the loss, injury or damage sued for is said to flow, and then to determine whether or not that act, neglect or default is a continuing one. In the present case it is readily apparent from the pursuer’s pleadings that the losses sued for are said to flow from the failures which I set out at paragraph 3 above. These are all completed acts or defaults which are averred to have occurred in the course of designing (and possibly constructing) the bridge, i.e., at best for the pursuer, at some time prior to June 2004; it is unnecessary for present purposes to be more precise. There is, in my opinion, no causal link between, on the one hand, any breach of duty to review the design which may continue to subsist and, on the other hand, the occurrence of any of the losses claimed in this action.
[9] In these circumstances I hold that section 11(2) has no application to the breaches of duty founded upon by the pursuers and said to have caused the losses sued for. Any obligation of the defenders to make reparation for the loss, injury and damage averred to have been sustained by the pursuer became enforceable at some time before June 2004 and had subsisted for a continuous period of more than five years prior to the raising of these proceedings. It has been extinguished by operation of prescription.
[10] I shall therefore sustain the defenders’ first plea-in-law and grant decree of absolvitor.