EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

For the defenders and appellants: Dunlop; Gillian Lindsay.

For the pursuer and respondent: D. O'Carroll; Govan Law Centre.

30 March 2006.

Introduction

[1] This is an action of damages for breach of contract, in which the pursuer alleges that the defenders, as the landlords of a flat of which she was then the tenant, failed over a period between January 1999 and March 2001 to fulfil their obligation to keep the premises in a tenantable and habitable condition. She alleges that as a result she suffered loss of two kinds, namely first the value of items of moveable property which were damaged and had to be discarded, and secondly damages for "inconvenience".

The issue

[2] The issue which was debated before the sheriff, was then the subject of appeal to the sheriff principal, and is now the subject of the appeal to this court, is whether the claim, so far as laid in respect of inconvenience, is a claim for "personal injuries". If it is, it is accepted by the pursuer that it is time barred, by virtue of section 17(2)(a) of the Prescription and Limitation (Scotland) Act 1973 ("the 1973 Act"), and that the averments relating to that aspect of the claim should therefore be excluded from probation. That is because the pursuer's occupation of the flat came to an end in March 2001, and this action was not raised until 10 August 2004, more than three years later. It is not suggested by the pursuer that, if section 17 applies, she can rely on section 17(2)(b) to postpone the commencement of the limitation period, or can rely on the discretion conferred on the court by section 19A of the 1973 Act. The defenders, for their part, accept that if the claim for inconvenience is not a claim for personal injuries, it is not affected by the limitation period provided for in section 17, and has not prescribed in terms of section 6 of the 1973 Act, the action having been raised within the quinquennium identified in the latter section. It should be noted that the defenders do not seek to argue that, if section 17 applies, the words "consist of or include damages for personal injuries" which appear in section 17(1) have the effect that the other aspect of the claim, for the value of damaged property, is also time barred.

[3] The sheriff, having heard debate on the issue, by interlocutor dated 29 April 2005 held that the inconvenience claim was a claim for personal injuries, and according dismissed that aspect of the action and withheld the averments of inconvenience from probation, allowing the remainder of the claim to proceed to proof before answer. The sheriff principal, by interlocutor dated 4 August 2005, allowed the pursuer's appeal, recalled the sheriff's interlocutor so far as it dismissed the inconvenience claim and withheld the relative averments from probation, and allowed a proof before answer with all averments and pleas standing. The defenders now appeal to this court, seeking to have the sheriff's decision reinstated.

The averments

[4] The only part of the pursuer's pleadings of which it is necessary to take note is the following passage from Article 7 of the Condescendence:

"As a consequence of the defenders' said breaches of duty, the pursuer has suffered loss, inconvenience and damage. She has suffered the inconvenience and discomfort of having to live in a house which was suffering from severe water penetration, dampness and mould growth for a period of some 2 years and two months. She has suffered the inconvenience of living in a house which was damp and smelly, and the social embarrassment of living in such a house. She has suffered the inconvenience of having had to complain to the defenders. She has been required to redecorate and clean the house due to water penetration and dampness. THREE THOUSAND ONE HUNDRED AND SIXTY POUNDS (£3,160) is claimed in respect of the substantial inconvenience caused by the defects in the subjects. The pursuer has had to discard items of moveable property damaged due to dampness and mould growth. Said items are quantified at £1,340 and are fully narrated in a Schedule of Losses which will be lodged in process and is incorporated herein and referred to for its terms brevitatis causa. The pursuer's claim is for solatium and economic loss arising from the defenders' breach of contract."

The part of that passage shown in italics contains the averments making the part of the claim which the defenders do not maintain is time barred.

The submissions

[5] Both Mr Dunlop for the defenders and Mr O'Carroll for the pursuer, in discussing the authorities, took as their starting point Webster & Co v Cramond Iron Co (1875) 2 R 752, a case in which damages were claimed for the late delivery of a consignment of pipes. Lord President Inglis said, at 753:

"In these circumstances the pursuers are entitled to damages for breach of contract to the extent to which they have sustained damages, but to no greater extent. It lies on them to shew wherein they have sustained damage";

and at 754:

"The contract and the breach of it are established. That leads of necessity to an award of damages. It is impossible to say that a contract can be broken even in respect of time without the party being entitled to claim damages - at the lowest, nominal damages. In directing a jury I should have stated that principle, and told them that if they were satisfied that the pursuers were not put to any serious inconvenience they might give the smallest imaginable sum, but if they thought that, though no specific damage had been proved, the pursuers had been put to serious inconvenience and trouble, then their duty was to give something more substantial."

[6] Mr Dunlop went on to cite Wilkie v Brown 2003 SC 573 in which Lord Justice Clerk Gill, delivering the opinion of the court, pointed out (at 579A) that there could be cases:

"where a breach of contract was to the immediate benefit of the innocent party. In that event it would be contrary to principle that the innocent party should be entitled to nominal damages for the mere fact of the breach. ... But if there is proof that by reason of the breach of contract the pursuer has been put to trouble and convenience, the pursuer can be said to have suffered damage of a kind for which a nominal award may be appropriate ... "

[7] These cases, in our view, show that where a breach of contract causes the innocent party inconvenience, that inconvenience may be reflected in an award of damages. We accept, of course, the qualification of Lord President Inglis's observations made in Wilkie, namely that there may be cases in which the breach of contract results in no loss. In that event there is iniuria sine damno, and thus no entitlement to damages, even nominal damages. We do not, however, understand Lord Justice Clerk Gill's observations as confining an award of damages for inconvenience to nominal damages, however severe the inconvenience may be proved to have been. If there is loss in the form of inconvenience the quantification of the appropriate award of damages is, as Lord Inglis indicated, a jury question.

[8] In search of the basis on which inconvenience caused by breach of contract may be regarded as compensable, Mr Dunlop cited Watts v Morrow [1991] 1 WLR 1421, in which Bingham LJ said (at 1445F-H):

"A contract-breaker is not in general liable for any distress, frustration, anxiety, displeasure, vexation, tension or aggravation which his breach of contract may cause to the innocent party. ...

But the rule is not absolute. Where the very object of the contract is to provide pleasure, relaxation, peace of mind or freedom from molestation, damages will be awarded if the fruit of the contract is not provided or if the contrary result is procured instead. ...

In cases not falling within this exceptional category, damages are in my view recoverable for physical inconvenience and discomfort caused by the breach and mental suffering directly related to that inconvenience and discomfort."

[9] Mr Dunlop also cited Farley v Skinner [2002] 2 AC 732 in which Lord Clyde, after a review of authorities antedating Watts v Morrow, said (at paragraph 35, page 753H):

"As a matter of terminology I should have thought that 'inconvenience' by itself sufficiently covered the kinds of difficulty and discomfort which are more than mere matters of sentimentality, and that 'disappointment' would serve as a sufficient label for those mental reactions which in general the policy of the law will exclude."

In the same case Lord Hutton said (at paragraph 57, page 762H):

"The authorities ... make it clear ... that damages are recoverable for physical inconvenience and that it is not necessary to establish any kind of physical injury or loss";

and (at paragraph 58, page 763C):

"there is a distinction between mere annoyance and disappointment at the failure of the other party to carry out his contractual obligation and actual physical inconvenience and discomfort caused by the breach."

[10] It does not seem to us that those dicta assist Mr Dunlop in establishing the proposition that the pursuer's claim for damages for inconvenience must be regarded as a claim in respect of personal injuries. The thrust of the distinction which is being made is between an emotional reaction to the mere fact of breach of contract, which does not sound in damages at all (save in the exceptional category of case identified by Bingham LJ), and "inconvenience" (to use Lord Clyde's terminology) or "physical inconvenience and discomfort" (to use the language used by the other judges quoted), caused by circumstances brought about by the breach of contract, which will sound in damages.

[11] The authority on which Mr Dunlop placed greatest reliance was Fleming v Strathclyde Regional Council 1992 SLT 161. In that case the pursuer sought damages for "distress and inconvenience" suffered as a result of damage to the house tenanted by her caused by an ingress of floodwater. She called as defenders both the sewerage authority and the housing authority, and alleged that the flooding was caused by their negligence. The action was not raised until after the expiry of the triennium. The issue was therefore the same as in the present case, namely whether the "distress and inconvenience" in respect of which the claim was made fell to be regarded as "personal injuries" within the meaning of section 17(1) of the 1973 Act. The Lord Ordinary (Lord Cullen) held that the averments of distress and inconvenience were averments of personal injuries, and therefore excluded these averments from probation. The relevant passage in Lord Cullen's opinion (at page 163D-F) was in the following terms:

"In regard to time bar, however, I have come to the conclusion that the defenders' attack is well founded. The expression 'personal injuries' is, in my view, wide enough to cover various forms of personal suffering, including distress and inconvenience. It is not necessary that 'personal injuries' should be such as to involve a medical condition, let alone the need for medical assistance. I would prefer to treat distress and inconvenience as covered by the general meaning of 'personal injuries' rather than by the expression 'mental condition' which appears in the partial definition contained in section 22(1) of the 1973 Act. The phraseology of that provision suggests that its intention was to make clear that 'personal injuries' extended to, inter alia, various ensuing medical conditions."

Mr Dunlop submitted that we should follow that approach. He pointed out that Lord Cullen's decision was the subject of apparently favourable comment by Lord Prosser, albeit in a somewhat different context, in McLelland v Greater Glasgow Health Board 2002 SLT 446 at 450F.

[12] Mr Dunlop drew attention to the fact that the pursuer's claim is expressed as including a claim for solatium. The loss resulting from inconvenience was non-pecuniary. It was a loss which was personal to the pursuer. The inconvenience had impaired her mental and physical state by causing her discomfort and embarrassment. If the claim sounded in damages, it did so because the inconvenience had been experienced by the pursuer physically, sensorily. The claim was therefore for personal injuries.

[13] As we have already noted, Mr O'Carroll's submissions for the respondents began at the same starting point as Mr Dunlop's, namely Webster & Co v Cramond Iron Co. Taking that case as establishing that a claim for damages for inconvenience might be made in a breach of contract case, Mr O'Carroll referred also to Aarons & Co Ltd v Fraser as an example of the recovery of damages for inconvenience by a body corporate. He also cited Gunn v National Coal Board 1982 SLT 527 and McArdle v City of Glasgow District Council 1989 SCLR 19 as examples of damages for inconvenience for a breach of contract of the sort alleged in the present case.

[14] The main thrust of Mr O'Carroll's submissions, however, was that Fleming was wrongly decided. He pointed out that Fleming was a delictual rather than a contractual case. He pointed out that the averments in that case were of distress as well as inconvenience. He submitted that Lord Cullen had fallen into the error of conflating distress and inconvenience. He submitted further that Lord Cullen did not address the normal rule that mere distress, or any other emotional reaction, does not ordinarily sound in damages. In that connection he cited Simpson v Imperial Chemical Industries Ltd 1983 SLT 601, in which Lord Justice Clerk Wheatley (at page 602) accepted the submission that;

"Damages are only awarded for injuries which a fright has caused. Causing fright is not per se causing bodily injury. While fright may cause an emotional reaction, injury in respect of which damages can be claimed is not sustained unless and until the fright has a consequence that can be described as an injury."

At page 605 Lord Robertson quoted the following dicta:

"To found a claim of damages for personal injury there must be physical injury of some kind";

and,

"The first hurdle which a plaintiff claiming damages of the kind in question must surmount is to establish that he is suffering, not merely grief, distress or any other normal emotion, but a positive psychiatric illness."

Mr O'Carroll also cited Simmons v British Steel plc 2004 SC (HL) 94, in which Lord Hope of Craighead said (at paragraph 24, page 101):

"Emotional reactions such as anger, distress or fear do not sound in damages. But emotional reactions may lead to other conditions, both physical and psychiatric, for which damages can be awarded."

On the basis of these dicta Mr O'Carroll submitted that inconvenience caused by breach of contract might lead to personal injury, but there was no suggestion in the pursuer's averments that that had occurred in the present case. The pursuer's case, despite the unfortunate use of the word "solatium", was a simple case of inconvenience caused to the pursuer by the defenders' failure to maintain the pursuer's flat in a habitable condition. There was no suggestion in averment that the pursuer had suffered anything that might properly be regarded as personal injury. Section 17 should accordingly be held not to apply, and the sheriff principal's interlocutor allowing a proof before answer at large should be adhered to.

Discussion

[15] "Inconvenience" may sound in damages in a number of contexts. As Sheriff Principal Wheatley observed in Purdie v Dryburgh 1999 Rep LR 68 at paragraph 12-25, page 74:

"It is perhaps unfortunate that the term inconvenience is sometimes used in the assessment of solatium for personal injuries and sometimes in the context of loss of amenity."

These are not, however, the contexts with which we are concerned in this case. This is not a case where, as a result of physical personal injury, the pursuer suffers inconvenience, of the sort which would be suffered, for example, by a man who had lost a leg in a road accident. The inconvenience suffered by the pursuer is that she had to live in unpleasant conditions for a period of time as a result, so it is alleged, of the defenders' failure to fulfil their contractual obligation to keep the flat of which she was tenant in habitable condition. There is, in our view, no doubt that such inconvenience resulting from breach of contract sounds in damages (Webster & Co).

[16] We do not consider that Mr Dunlop gains any support for his contention, namely that the inconvenience averred by the pursuer amounts to personal injuries, from the English cases which he cited. These cases show that damages are not recoverable for a mere emotional reaction to the fact of breach of contract; but that damages are recoverable where the breach of contract brings about a set of circumstances in which the pursuer suffers inconvenience. That such inconvenience has been referred to as "physical inconvenience" does not imply that it must be regarded as personal injury. Indeed in Farley v Skinner at paragraph 57, Lord Hutton pointed out that while damages are recoverable for physical inconvenience, it is not necessary to establish any kind of physical injury. Mr Dunlop's attempt to argue that the inconvenience of living in the damp house impaired the pursuer's physical and mental state and must therefore be regarded as amounting to personal injury is ill founded. There is no averment that the pursuer's physical or mental state was impaired. A person may well live in adverse conditions, which cause her inconvenience, discomfort or embarrassment, without any impact whatsoever on her physical or mental health.

[17] In our opinion Fleming was wrongly decided. In so far as Lord Cullen was influenced by the averment of distress (which is not replicated in the present case), his reasoning failed to take into account that mere distress or other emotional reaction does not sound in damages and is thus not regarded as constituting personal injuries (Simpson; Simmons; see also Watts at 1445F). If the averment of distress is removed from the picture, all that is left is inconvenience. Inconvenience sounds in damages not because it is a species of personal injury, but because it is a recoverable head of general damages for breach of contract, whether the pursuer is a natural person (capable of suffering personal injuries) or a body corporate (not so capable) (Webster & Co; Aarons & Co Ltd). It is unfortunate that the pursuer's pleadings use the term "solatium"; but we are of opinion that we must look behind the language, and examine the true nature of the pursuer's claim. On doing so, we conclude that the claim is not properly to be regarded as a claim for personal injuries.

Result

[18] In these circumstances we refuse the appeal and adhere to the interlocutor of the sheriff principal dated 4 August 2005.