Pursuers; Kennedy, Solicitor Advocate; Balfour + Manson LLP

Defenders: Hayhow; Tods Murray

13 February 2008

Introduction

[1] In this action the pursuers contend that they have suffered loss and damage because they discovered that the proprietor of subjects adjoining the property which they purchased from the defenders was entitled to a servitude right of access over part of their property. They have sued the defenders claiming that the defenders are in breach of contract and also in breach of the warrandice granted by the defenders in the disposition in favour of the pursuers. The defenders do not dispute that the servitude exists and is an overriding interest affecting the property. Nor do they dispute that the existence of the servitude constitutes a breach of the warrandice granted by them in the disposition in favour of the pursuers.

[2] In the course of the procedure roll debate counsel for the defenders invited me to sustain the first plea-in-law for the defenders and to dismiss the action. The solicitor advocate who appeared on behalf of the pursuers offered the defenders a proof before answer with all pleas reserved. As a preliminary matter he moved the record to be amended in terms of the pursuers' minute of amendment. He accepted that the pursuers would require to bear the expenses of that amendment. The proposed amendment was not opposed by the defenders and I allowed the record to be amended. I found the pursuers liable for the expenses incurred by the amendment procedure. An amended record was made available.

The pleadings
[3] Each of the pursuers has a separate conclusion for payment, the first named pursuer suing for £20,000 and the second named pursuer for £25,000.

[4] The pleadings disclose that by missives respectively dated 14 and 21 February and 11 March all 2003 the pursuers agreed to purchase and the defenders agreed to sell subjects known as 2 Maidencraig Steading, Kingswells, Aberdeen. The purchase price was agreed at £125,000. Clause 4 of the Schedule to the pursuers' offer of 14 February 2003 provided:

"The subjects are not affected by any overriding interest, servitude or wayleave or right of way or access whether formally constituted or not."

[5] That condition was met by qualification 9 of the defenders' qualified acceptance of 21 February 2003 which provided:

"The Land Certificate pertaining to the subjects of purchase is enclosed for examination and return and by acceptance hereof the purchasers will be deemed to have satisfied themselves regarding:

(a) The extent of the subjects of purchase.

(b) The servitude rights and others pertaining thereto.

(c) The title conditions contained therein.

The terms of the offer are amended accordingly."

[6] The pursuers aver that the defenders exhibited the Land Certificate for the property and that it disclosed no overriding interest, servitude or wayleave or right of way or access affecting the property. The purchase was settled on or about 11 April 2003. In the disposition granted by the defenders, the defenders granted absolute warrandice.

[7] The pursuers go on to aver that in about November 2004 they discovered that the proprietor of adjoining subjects was entitled to a servitude right of vehicular and pedestrian access over part of the property that they had purchased from the defenders. The grantors of the servitude had previously owned the property purchased by the pursuers. The servitude was constituted in a disposition by those former owners in favour of Mrs Louie Elizabeth Parker dated 28 October and recorded in the General Register of Sasines for the County of Aberdeen on 27 December 1993. The pursuers contend that the defenders knew in about September 2002 of the existence of the servitude, and notwithstanding that knowledge, had failed at any time prior to settlement to advise the pursuers of its existence. The defenders do not deny that a servitude exists but they respond to the pursuers' averments by making specific reference to its terms as follows:

"(THREE) A heritable and irredeemable servitude right of pedestrian access to the subjects hereby disponed from the Lang Stracht over the route shown coloured yellow on the Plan B annexed hereto: declaring that in the event of our Disponee and her successors obtaining planning permission for the erection of a dwellinghouse on the subjects hereby disponed such servitude right shall be increased to allow both pedestrian and vehicular access over the route shown coloured yellow on the said plan, subject to the conditions aftermentioned."

[8] As I have already indicated the defenders do not deny that the existence of the servitude means that it is an overriding interest affecting the property they sold to the pursuers. They accept that the existence of the servitude constitutes a breach of the warrandice granted by them in the disposition in favour of the pursuers. The defenders do not admit the breach of contract contended for by the pursuers.

[9] As the arguments before me centred on the averments of loss set out at article 6 of condescendence, it is desirable at this point to set that article out in full:

"COND. 6

As a result of the defenders' breach of contract et separatim of warrandice the pursuers have suffered loss and damage. The existence of the servitude materially reduced the value of the pursuers' property. Accordingly the pursuers made contact with Mrs Parker. She met with the pursuers and indicated that she considered that she had reasonable prospects of obtaining planning permission to develop the mill. She explained that a previous application for planning permission had been refused for reasons which she believed she could overcome. She indicated that, if the pursuers did not meet her terms she intended to contact developers with a view to selling the site to them. The pursuers made enquiries and ascertained that there were no insuperable obstacles about planning permission for development of the mill site being obtained by any person including Mrs Parker. Had she been able to do so, the pursuers were justifiably apprehensive that the servitude right enjoyed by Mrs Parker would be expanded from a right of pedestrian access to a right of vehicular access. That right of vehicular access could have been exercised by Mrs Parker and her singular successors over the pursuers property. The vehicular access together with the verges to which Mrs Parker and her successor would become entitled to exercise should planning permission for development of the mill be granted would have a width of up to 3.8 metres. The pursuers' Land Certificate as rectified by the Keeper in August 2005 was subject to a burden in favour of Mrs Parker or her successors entitling her to exercise vehicular access (if planning permission were obtained) by means of a roadway of up to 2.8 metres wide with verges on either side of up to 0.5 metres. The distance between the pursuer's house and the boundary fence is 6.53 metres. That represents partly a driveway on which the pursuers would park the vehicle and partly a rockery. If vehicular access were to be exercised a strip of 3.8 metres, the pursuers' ability to park a car would be removed because it would obstruct the right of access. Their enjoyment of their house and garden would be materially affected adversely. Vehicles including private cars, service vehicles and heavy construction vehicles would be driven past the pursuers' house within a few feet of it putting both them and their children at risk. Mrs Parker declined to negotiate a settlement involving her giving up the right of access over the pursuers' ground. She explained that she did use the access route to take diggers and vehicles to the mill. She was adamant that the existence of her access right had been made known to the defenders prior to the defenders selling to the pursuers. After discussions, Mrs Parker indicated that she was prepared to sell her whole interest in the derelict mill and the surrounding land to the pursuers at a price of £30,000. Having taken legal advice, the pursuers submitted an offer in September 2005 to Mrs Parker for that amount and have purchased the land from Mrs Parker, thus extinguishing confusione the right of access over their own land. The price was paid on 21 October 2005. In addition to the price of £30,000, the pursuers have incurred legal expenses in investigating the problem and in dealing with the negotiations and conveyancing. The pursuers have incurred fees to their solicitors of approximately £3,600 for investigation of the problem and subsequent negotiations and they have incurred fees and outlays of £1,064.75 in connection with the conveyancing to give effect to the purchase. Had the pursuers not purchased the land from Mrs Parker, they would have been unable to sell the property at anywhere approaching its true market value because of the existence of the access over it. Even a pedestrian right of access would have been sufficient to deter any prospective purchaser advised by a competent solicitor from proceeding to buy the land at all. A prospective purchaser would have been advised that the pedestrian access would detract from both the amenity and privacy of the house and that potential vehicular access would have a much more serious effect. The pursuers on selling the house would have been unable to offer a valid marketable title acceptable to prospective purchasers. Any solicitor acting for a prospective purchaser would have required to disclose to any prospective lender to that prospective purchaser the existence of a burden with potentially significant consequences, which would have been likely to have led a prospective lender declining to advance funds to a prospective purchaser. The price of £125,000 paid in February 2003 by the pursuers to the defenders represented approximately the value of the subjects then. The value will have increased since then. The diminution in value created by the existence of the right of access in favour of Mrs Parker, particularly with the possibility of it being increased from pedestrian to vehicular access, would have been considerable. It is reasonable to assume that the value of the house without that defect as at September 2005 was £180,000 and that a diminution in value of 25% of that value would have applied by reason of it not being possible to offer the subjects for sale without declaring the existence of the right of access in favour of Mrs Parker, a right of access which Mrs Parker had openly exercised and repeatedly asserted. In the absence of planning permission for its development, the derelict mill and the land round it would have no more than a nominal value. In addition to the foregoing payments, the pursuers have suffered anxiety, distress and inconvenience. They have a young family. They were apprehensive justifiably about the risk of the access being exercised in such a way as to make their home less safe for their children and with far less amenity. They were justifiably worried about their ability to sell their home should they choose instead to relocate or be forced to do so through other circumstances. The second named pursuer consulted her doctor in November 2005 because of stress and depression. The defenders through their agents made no positive response to the pursuers' request for the problem to be resolved over a very lengthy period. The sum sued for is a reasonable estimate of the pursuers' loss and damage. The defenders' averments so far as not coinciding herewith are denied except insofar as coinciding herewith. The pursuers are entitled to damages to restore them so far as is possible in financial terms to the position in which they would have been had there been no breach of contract or breach of warrandice by the defenders. The diminution in value of the pursuers' property requires to be ascertained at the date of rectification of their Land Certificate by the addition of the prejudicial burden in August 2005. An indicator of the extent of that diminution is the price which required to be paid to remove the defect in the pursuers' title and render the house capable of being sold with a valid marketable title. A previous application for planning permission by Mrs Parker to develop the mill site for residential purposes had been refused on technical grounds and she had expressed to the pursuers her intention of making a fresh application. She claimed that she exercised access sporadically during the defenders' occupation of the subjects. The pursuers believe and aver that the defenders were aware of the existence of the right of access, that it was being asserted by Mrs Parker and that it was being exercised by Mrs Parker who chose deliberately not to disclose that information to the pursuers in the negotiations for the sale and purchase of the house so as to prevent the price which the pursuers were to pay being reduced. Had the pursuers been made aware of the existence of the access, they would not have proceeded with the purchase at all or would have done so at a lower price to reflect the defect in title. Faced with a defective title, the pursuers have acted reasonably in taking steps to remedy that defect."

[10] Having regard to the figures set out in the extract from the pursuers' pleadings set out in the preceding paragraph, it appears that on the basis that the pursuers extinguished the right of access over their own land confusione the total cost inclusive of fees and outlays was £34,664.75. On the diminution in value approach averred by the pursuers the figure is £45,000.

Defenders' submissions
[11] Counsel for the defenders submitted that the pursuers had averred two separate and contradictory means of establishing their level of loss. In the first place the pursuers' averments disclosed that their loss was being quantified under reference to the cost to them of buying out the whole of the dominant tenement. In the second place the averments disclose that their loss was being calculated under reference to the diminution in value of the subjects of sale by reason of the existence of the servitude. Counsel for the defenders argued that there was no averment to suggest that these were alternative methods of assessing loss or that one method was being used as a cross check of the other. Also, although the total diminution in value figure of £45,000 tallied with the total of the two conclusions the question had to be posed as to what role the apparent solatium element played. Furthermore, the total figure of £34,664.75 arrived at under reference to the cost of buying out the whole of the dominant tenement could not be related to the pursuers' conclusions arithmetically. Counsel for the defenders indicated that his complaint was one of lack of fair notice in relation to the manner in which the pursuers' loss was being calculated.

[12] Counsel for the defenders then went on to examine each of the potential approaches adopted by the pursuers and submitted that each was irrelevant or lacking in specification.

[13] In relation to the purchase of the dominant tenement approach counsel for the defenders argued that the pursuers had made no attempt to deal with the element of betterment that, he submitted, must have attached to the purchase of the dominant tenement. By acquiring the whole of the adjoining premises the pursuers on the face of it obtained a benefit greater than merely the extinction of the servitude.

[14] In relation to the diminution in value approach he submitted that there was an apparent contradiction between the alleged 25% diminution of value and the averments made on behalf of the pursuers that the subjects were not saleable at all. That apparent contradiction was not explained by the pursuers. Furthermore in the pursuers' averments three different dates appear to be relied upon as the appropriate date for assessing the diminution in value, namely September 2005, August 2005 and October 2005. The dates were in close proximity to each other but nevertheless there might be a difference and so far as the defenders were concerned they were entitled to be given notice as to what date the pursuer was intending to rely upon.

[15] Counsel for the defenders went on to argue that the appropriate date for the diminution of value approach should either be the date of the disposition granted by the defenders in favour of the pursuers in April 2003 or the date on which the pursuers discovered the existence of the servitude - November 2004.

[16] In addressing the date when, in a breach of warrandice case, any loss resulting from diminution in value of the property is to be assessed counsel for the defenders submitted that on the basis of the pursuers' averments the nature of the defect in title was that there was a partial deprivation and not a total deprivation as might be the case where a disponee loses the property entirely. Whereas in the case of a total deprivation of the property the measure of loss would be the market value of the property, in a situation as here where the deprivation is only partial the loss is assessed under reference to the diminution in market value caused by the title defect. Counsel for the defenders submitted that on the basis of the pursuers' pleadings the most appropriate date was November 2004 because it was then that the pursuers learned that the neighbouring proprietor was entitled to a servitude right of access over the pursuers' property. He acknowledged that in the defenders' pleadings the suggestion is that the appropriate date is the date of settlement and that might be a fall back position but in any event the three different dates chosen by the pursuer of August, September and October 2005 were not the correct dates.

[17] So far as the pursuers' claim for solatium was concerned, counsel for the defenders submitted that such a claim was highly doubtful in the context of a claim for loss under warrandice. He appeared to accept that such a claim was relevant in the context of breach of contract. He submitted that the pursuers' averments generally lacked specification and, if indeed it is psychiatric injury that is being averred, no indication was given as to why it was reasonably foreseeable that such injury would be suffered in the circumstances.

[18] In the course of his submission counsel referred to Welsh v Russell [1894] 21 R 769, Palmer v Beck 1993 SLT 485, Clark v Lindale Homes Limited 1994 SC 210 and 1994 SLT 1053 and Gretton & Reid, Conveyancing (3^rd edition) para. 16.10.

Submissions for the pursuers
[19] The solicitor advocate for the pursuers submitted that adequate notice had been given to the defenders of the case being made against them. Properly understood, the pursuers' pleadings disclosed that, having become aware of the title problem, the pursuers in due course were able to rectify the problem themselves in about September 2005 by agreeing with Mrs Parker the owner of the dominant tenement, to purchase the property. The total sum of £34,654.75 represented the out of pocket costs incurred by the pursuers in rectifying the title. He did not demur from the proposition that the general approach whether in a breach of warrandice case or a breach of contract case was the diminution in value approach advanced on behalf of the defenders but he submitted that the pursuers were entitled to set out the costs incurred by them as a cross check.

[20] In relation to the attack made by the defenders on the pursuers' averments in support of the solatium claim the solicitor advocate for the pursuers submitted that a claim for solatium would in any event be relevant in breach of contract irrespective of what the position might be in a claim for breach of warrandice. He argued that what he termed "contractual solatium" could fall short of psychiatric injury and that the defenders' submissions on the foreseeability of psychiatric injury were misconceived. In any event he submitted that solatium was competent as a head of claim in a breach of warrandice case.

[21] In presenting his submissions the solicitor advocate referred to Watson v Smith & Co 1986 SLT 217, Clark v Lindale Homes, Palmer v Beck, Haberstich v McCormick & Nicholson 1975 SC 1; 1975 SLT 181, DiCiacca v Archibald Sharp & Sons 1994 SLT 421 and Douglas v Stuart Wise Ogilvie Estates Limited 2002 SLT 689.

Discussion
Breach of warrandice
[22] There is no dispute in this case that the defenders are in breach of the absolute warrandice clause of the disposition. The simple issue is whether the pursuers have made relevant averments on the loss they sustained as a consequence of that breach.

[23] In Welsh v Russell Lord Maclaren describes the compensation payable as a result of the breach of warrandice in the following way at page 773:

"The obligation (of warrandice) has also this peculiarity in common with other obligations of indemnity, that its extent is measured by the extent of the injury which the creditor in the obligation may sustain, because such obligations are designed to indemnify the purchaser not only against the consequences of complete eviction, but against the loss of the most inconsiderable fraction of the estate, or its diminution in value by reason of the establishment of a burden of any kind."

He goes on to say at page 773:

"It is indeed evident from the nature of the obligation of warrandice that it must in the general sense, and probably in all cases, resolve into a claim of pecuniary indemnification for the loss of the subject of sale, or its diminution in value through the existence of real securities, real burdens, servitudes or other real rights affecting the estate."

[24] In agreeing with Lord Maclaren, Lord Kinnear says at page 775,

"But I agree with what has been said by Lord Maclaren that that being the position of his right he has chosen a wrong and inapposite remedy, because the only operative conclusion of the summons which he has brought, after allowing the defender an opportunity of clearing the subjects of the burden, is that the defender should make payment to him of the present value of the subject described in the summons. Now that is the ordinary and perfectly appropriate conclusion of a summons upon a warrandice where there has been a total eviction of the subjects from the purchaser, for then the measure of the indemnity which he is asking, and to which he is entitled, is the present value of the whole subjects of which he has been deprived. In such an action the conclusion is not for repayment of the price, as Lord Maclaren had explained, but a conclusion for the present value of the subject. In the ordinary case, of course, there is no corresponding conclusion for restitution of the subjects, for the assumption of such an action is that they have been carried away.

But such a conclusion is clearly inappropriate to a case where the purchaser remains in possession of the subjects, and complains merely that his use of them is diminished by reason of a servitude right of way. It is impossible that a purchaser of land should recover the entire value of the land from the seller, except on condition of his restoring the land, and in circumstances which will entitle him to do so. It is said that although there is no provision for restoration to be found in the conclusion of the summons, an offer to restore is contained in the condescendence. But however that may be, it is not appropriate to an action for breach of warrandice. That is an action on the contract, and the pursuer of an action founded upon the contract cannot in the same action claim to recover the price and give back the lands, and so to set aside the contract. The pursuer does not maintain that he is entitled to reduce the contract. But if he did he could not have decree of reduction in an action founded upon the warrandice clause. The remedy to which he is entitled under the clause of warrandice is not reduction but indemnification. In case of a total eviction he is entitled to demand the whole value of the subjects. In case of a partial eviction he cannot be entitled to the whole value, but only to the value of what he has lost. The action on the warrandice, therefore, where the pursuer is left in possession of the subjects, and complains merely of a burden by which its value is diminished, is in effect an action of damages."

[25] In Welsh v Russell, the purchaser of property discovered that the owner of adjoining property had a servitude right of access over his back garden. The adjoining owner obtained a decree against him establishing the existence of that servitude. The purchaser sued the seller for the full value of the subjects of sale but as the passages just quoted from the Opinions of Lords Maclaren and Kinear, disclose, his approach was misconceived because he had only suffered a partial eviction of the subjects and was entitled only to obtain indemnification for the loss sustained as a result of that partial eviction. In this present case, the case was presented on the basis that the pursuer did sustain a partial eviction of the subjects of sale, cured subsequently by their purchase of the dominant tenement.

[26] In Palmer v Beck the purchaser of a house and garden received a title containing less than she had contracted to purchase but more than the seller had title to convey to her. The purchaser moved out of the house because of the defect in the title and eventually sold the property. To do so she required to purchase the extra area to enable her to sell the property. She failed to establish her case based on breach of warrandice because she failed to prove that she was ever evicted from the area of garden ground or that there was at any stage a threat of eviction which gave rise to a claim for breach of warrandice. In addressing her claim for damages Lord Kirkwood says at page 491-492:

"Turning to the pursuer's claim for damages for breach of warrandice, a breach of warrandice gives rise to a claim for indemnification and the amount of the loss will normally be calculated as at the date of eviction (Bells Principles, para. 895; Bells Lectures on Conveyancing, Volume 1 p.217). In this case it seems to me that the measure of the pursuer's loss would be the diminution in the value of the subjects arising from the breach of warrandice, namely, the difference between the value of the subjects validly conveyed to her and the value of the subjects if they had included the area of ground specified in the disposition to which the defenders did not have a title. Further, I consider that the diminution in value would fall to be calculated at the date when the eviction or threat of eviction occurred. In my opinion, the pursuer is not entitled to recover, under this head, any damages resulting from the fact that she vacated the subjects because she had moved out some 6 months before the disposition was granted. The pursuer led evidence from Mr Goeffrey Smith which was apparently designed to demonstrate the diminution in the value of the property as at 1 April 1978 when Mr and Mrs McGregor took entry. Mr Smith said the value of the subjects, including the whole area of garden ground, would have been £30,000, but the pursuer could only obtain a price of £24,500. However counsel for the pursuer, as I understood him, did not seek to argue that the pursuer's claim should be based on the difference between these two values and I must confess I had some difficulty in understanding the basis of the claim which he did make. However, if the proper measure of damages is the diminution in the value of the property resulting from the alleged breach of warrandice, the question would arise as to the date on which that diminution in value fell to be calculated. If, contrary to the view which I have taken, there was a threat of eviction then it would appear that it must have existed as soon as the disposition was delivered to the pursuer on the basis that she did not thereby acquire a title to the area of garden ground in question and was therefore liable at any time to be evicted from it by the true owners."

[27] The following conclusions can be drawn from what was said in Welsh v Russell and

Palmer v Beck. The obligation of warrandice can form the basis of a claim for damages. The purpose of an award of damages for a breach of warrandice is indemnification. If the purchaser, as a result of the defect in title, is totally evicted then the measure of damages is the market value of the property as at the date of eviction. On the other hand if the defect in title does not result in total eviction then the general rule is that the purchaser's loss is assessed by reference to the diminution in value of the property. The appropriate date for making such an assessment of the diminution in value is the date when the threat of eviction arises - in Palmer v Beck that occurred when the disposition was delivered. What the cases referred to do not address is the measure of damages in a case of partial eviction when the defect is subsequently cured.

[28] On the basis of the pursuers' pleadings, the pursuers discovered in November 2004 that the adjoining proprietor was entitled to the servitude right of access. As at that date the pursuers were aware of its existence and, according to their pleadings, that it was a right of access that "Mrs Parker had openly exercised and repeatedly asserted". I agree with counsel for the defenders that the different dates relied upon by the pursuer and in particular September 2005 are not the appropriate dates for assessing the diminution in value of the property because of the existence of the servitude right of access. The pursuers were aware prior to those dates that the servitude existed and was being insisted upon.

[29] What has happened here according to the pursuers' averments is that they have cured the defect in title by purchasing the adjoining proprietors' land. They aver that that was reasonable in the circumstances. The circumstances do raise the question as to the interplay between the diminution in value approach and the cost of cure. It seems to me that, although the diminution in value approach represents the normal rule, if in fact a title defect is cured by the innocent purchaser in a case of partial eviction, then it should be open to such a purchaser to prove his loss under reference to the cost of remedying the title defect. For example, the cost of cure may be significantly less than the loss of value arrived at by strict adherence to the diminution in value approach. In that situation the overriding principle of indemnification would demand that the purchaser's loss was the cost of cure. The purchaser who manages to cure a title defect at a cost less than the loss ascertained by calculating the diminution in value with the title defect in place is mitigating his loss.

[30] I agree with counsel for the defenders that on this issue of loss the pursuers pleadings are confused. The averments setting out the actual costs of remedying the title defect sit side by side with averments purporting to assess loss by reference to diminution in value without any clear indication as to how the apparently contradictory averments as to loss are to be reconciled. Furthermore, the conclusions are difficult to reconcile with the totality of the pursuers' averments on loss. The essence of counsel for the defenders' position was that there was a lack of fair notice. I have a great deal of sympathy with that complaint. However, to saddle the pursuers with the draconian consequences of dismissal because of drafting inadequacies in a case where on the admitted averments, they ought to have a remedy, would be a step too far particularly since the issue is simply one of quantification - at least in so far as the case based on breach of warrandice is concerned. I consider it to be of some importance that the pursuers have managed to cure the title defect. In such circumstances it can be said that the initial measure of the pursuers' loss was the cost to them of rectifying the title defect. If the costs in remedying the title defect are proved to be less than the diminution in value with the servitude in place then those costs will represent the pursuers' loss. If counsel for the defenders is correct that the pursuers have obtained a degree of betterment then the loss suffered by the pursuers will be even less. That is an issue that has been raised by the defenders and responded to by the pursuers' general denial, and can be fully considered after proof. Furthermore, after proof if the conclusions cannot not be related to what is proved, it will be open to the Court to award damages in the sums actually proved. Accordingly, although I do agree with counsel for the defenders that the pursuers have failed to focus on the appropriate date for the assessment of the diminution in value, I do not consider that in the circumstances that failure is fatal. Plainly, it ought to be remedied before the proof. Be that as it may, I consider that sufficient notice has been given of the manner in which the pursuers intend to prove their loss flowing from the breach of warrandice.

[31] As part of their claim for damages the pursuers also make averments that they should recover in respect of "anxiety, distress and inconvenience". This aspect of the case was described as the solatium claim in the course of the arguments and it is to consider that aspect of the case that I now turn.

[32] In Palmer v Beck Lord Kirkwood also had to deal with a claim for solatium. He says at page 492,

"I am also of the opinion that, as the pursuers' claim would be for indemnification, she is not entitled to an award of damages for solatium for the anxiety and distress which she allegedly suffered as a result of the breach of warrandice."

[33] In Watson v Swift & Co's Judicial Factor Lord Morison appeared to be of the view that a claim for damages for breach of warrandice would entitle the purchasers to include in such a claim damages for anxiety and depression. However, the issue did not appear to have been developed in any significant way in that particular case.

[34] This whole issue in the context of contract was considered in Mack v Glasgow City Council 2006 SLT 556. In that case a former tenant of property owned by the defenders sued the defenders for breach of contract, alleging that over a period in excess of two years, the defenders had failed to fulfil their obligation to keep the premises in a habitable

condition. She alleged that items in the property had been damaged by mould. She sought damages in respect of the loss resulting from that damage. She also claimed as a head of loss damages for the "inconvenience and discomfort" of having to live in a house suffering

from water penetration, dampness and mould. The description "solatium" was used in connection with this part of her claim.

[35] In deciding that properly understood the pursuer's claim was for inconvenience and not for personal injury notwithstanding the "unfortunate" use of the description "solatium", the Extra Division refused an appeal by the defenders challenging the Sheriff Principal's decision not to dismiss the action on this aspect of the pursuer's claim. In the Opinion of the Court the following extract from the speech of Lord Hope of Craighead in Simmons v British Steel Plc 2004 S.C. (H.L.) 94, p.101 is referred to at page 559F:

"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."

The Court goes on to say:

"[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 [1991] 1 W.L.R., p. 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)".

[36] What the decision in Mack v Glasgow City Council shows is that "anxiety, distress" and "stress", if not associated with averments of physical or psychiatric injury, will not sound in damages. The use of terms such as "solatium" as in Palmer v Beck and Watson v Swift & Co's judicial factor or "contractual solatium" as suggested by the Solicitor Advocate for the defenders in this case are totally inapposite. I am of the view that the pursuers' averments are wholly lacking in specification to set up a relevant claim for psychiatric injury. Furthermore, the threshold hurdle of foreseeability would have been fatal in any event. I consider that in the circumstances the pursuers' averments on this aspect of their claim ought not to be admitted to probation. The averments on "inconvenience" per se can survive, at least in the context of the contractual claim.

Contract
[37] Neither party made any substantive submissions on the pursuers' contractual case. Unlike the breach of warrandice claim, the defenders do not admit that they were in breach of contract. What I have said in relation to the solatium claim also applies to the contractual claim. However the reference in the pleadings to "inconvenience" and the averments that might be understood to support a finding of inconvenience are relevant within the context of the contractual claim.

Conclusion
[38] In the circumstances I shall allow a proof before answer on all pleas. I shall put the case out by order so that I can be addressed on the appropriate deletions to the pleadings standing the conclusions I have arrived at. I shall also reserve the question of expenses.