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OUTER HOUSE, COURT OF SESSION
[2008] CSOH 25
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A378/05
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OPINION OF C. J.
MacAULAY, Q.C.
(Sitting as a
Temporary Judge)
in the cause
JAMIE BURNS
MacPHERSON
and MRS SANDRA
ELAINE MacPHERSON
Pursuers;
against
JAMES STUART GRANT
WILLIAMS
and MARIE McKAY or
WILLIAMS
Defenders:
________________
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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 (3rd 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 SC (HL) 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.
