United Kingdom House of Lords Decisions

At delivering judgment on 6th March 1980,—

VISCOUNT DILHORNE .—My Lords, I cannot usefully add anything to the speech of my noble and learned friend, Lord Keith of Kinkel. I agree with him that for the reasons he gives this appeal should be dismissed.

LORD EDMUND-DAVIES .—My Lords, were it not for the fact that it found acceptance by the Lord Ordinary, I would have regarded as unarguable the construction of section 11 (1) of the Prescription and Limitation (Scotland) Act 1973 urged before your Lordships by the appellant's counsel. And, despite his strenuous efforts, I respectfully remain of that view.

My reasons for so thinking are the same as those advanced in the speech of my noble and learned friend, Lord Keith of Kinkel, which I have been privileged to read in draft, No advantage would be gained by repeating them in different (and, doubtless, less felicitous) language of my own, and I restrict myself to saying that I concur in dismissing this appeal.

LORD FRASER OF TULLYBELTON .—My Lords, I have had the advantage of reading in draft the speech of my noble and learned friend Lord Keith of Kinkel, and I agree with it.

In addition to the reasons of principle stated in his speech for dismissing this appeal, I would add the following practical consideration. If the appellants were right in saving that each item of pecuniary loss ought to be treated as a separate loss for the purposes of section 11 (1) of the Prescription and Limitation (Scotland) Act 1973, the result would be that each item would prescribe on its own appropriate date, five years after it occurred. But there would be great uncertainty about the date on which the prescriptive period in respect of each item began. Thus the items of loss specified in the appellant's condescendence include the following:

On the appellant's argument, as I understand it, each element of the increase in the costs of development, and each element in the loss of rents would prescribe five years after it "occurred," by which is meant after it fell due. I asked counsel for the appellant how to ascertain the date or dates in which the loss due to the increase mentioned in paragraph 3 above occurred. I asked also how to ascertain the date or dates on which the loss of rents in paragraph 4 occurred, having regard to the fact that ex hypothesi there was no lease in operation during the period covered by the claim. Was it to be assumed that the rent would have been payable annually or monthly, or weekly, or that it accrued from day to day, and that an item of loss occurred on the date when each instalment fell due? I received no answer that satisfied me on any of these questions and I am left in complete uncertainty about the terminus a quo for each of these items. Apart therefore from the inconvenience, not to say absurdity, of having a multiplicity of dates, on each of which different items of loss would prescribe, there would be a great difficulty in ascertaining exactly what the dates were. Yet if the dates on which prescription starts to run cannot be ascertained with reasonable certainty, the result can only be confusion. I decline to construe the Act in a way that would, I think, produce such confusion unless I am compelled to do so by clear words. In this case, happily, I feel no such compulsion.

I would dismiss the appeal.

LORD RUSSELL OF KILLOWEN .—My Lords, the appellant attacks the decision appealed from on two grounds, the first being based upon an alleged construction of sections 6 and 11 of the Prescription and Limitation (Scotland) Act 1973, the second and alternative (first taken before the Inner House) being based upon an alleged construction of section 14 (1) (a) of that Act.

Prior to the coming into force of Part I of the Act on the 25th July 1976 the period for negative prescription was 20 years.

The appellant had become the owner of a block of flats etc. which he was minded to redevelop, for which he required vacant possession. One tenancy could only be terminated on Whitsun 1971 by notice given not less than 40 days before that date. The appellant's solicitors (the respondents) in breach of their duty to the appellant failed to give such notice timeously, with the result that vacant possession could not be obtained earlier than Whitsunday 1972. The appellant took no proceedings and made no claim in respect of that breach of duty until November 1976, more than five years after the breach had resulted in inability on the part of the appellant then to obtain vacant possession and get on with his proposed redevelopment.

Section 6 provides that, if after the appropriate date an obligation to which the section applies has subsisted (without a claim being made in relation to that obligation and without acknowledgement of its subsistence) for a continuous period of five years, after the expiration of that period the obligation is extinguished. Schedule 1 covered the instant case as concerning an obligation to which section 6 applied, being under paragraph 1 (d) an "obligation arising from liability (whether arising from any enactment or from any rule of law) to make reparation": and under paragraph 1 (g) "an obligation arising from, or by reason of any breach of, a contract …" Section 6 (3) provided in the instant case that "the appropriate date" was "the date when the obligation became enforceable."

It was accepted for the appellant that section 6 by itself was fatal to his appeal (apart from the point under section 14 (1) (a)), since manifestly over five years had elapsed since Whitsun 1971. But he relied upon section 11 (1) of which the terms are as follows:

"… any obligation (whether arising from any enactment, or from any rule of law or from, or by reason of any breach of, a contract …) to make reparation for loss, injury or damage caused by an act, neglect or default shall be regarded for the purposes of section 6 of this Act as having become enforceable on the date when the loss, injury or damage occurred."

I observe that this echoes Schedule 1 paragraph 1 (d) and (g), while applying the word "reparation," found only in (d), to the whole.

For the appellant it was contended that the operation of section 11 was to produce in the case of this one breach of duty a series of "appropriate dates" for the purpose of section 6, each one relating only to what was referred to in argument as the "pecuniary loss" which could be demonstrated to have been suffered on or before that date. This was to be contrasted with what was described as only "potential loss," which would not serve to produce a terminus a quo as an appropriate date, albeit it could be made the subject of proceedings and a claim, if the pursuer thought fit, before it ripened into a "pecuniary loss." Therefore, claimed the appellant, although the relevant time could elapse as to some part of the loss or damage suffered, it did not follow that it would have elapsed as to other parts: and in this it is right to say that he was not contending that more than one action could be brought for the same breach of duty.

I cannot, my Lords, accept this argument. I do not find in the Act any justification for this distinction between "pecuniary loss" and "potential loss." All is a question of quantification of the harm done by the breach of duty. The loss damage and injury suffered by the pursuer was that arising from the fact that he was unable to obtain vacant possession at Whitsun 1971 and pursue his plans for development, and it occurred then.

I am assisted in this conclusion by the fact that the argument at least in theory may postpone the application of negative prescription indefinitely. In certain circumstances section 7 retains the former period of 20 years but section 11 applies also to such cases. For the appellant it was accepted that the present argument was not available when applying the 20-year period before the 1973 Act: so that if the argument were sound the 1973 Act would in certain circumstances have lessened the protection previously afforded by negative prescription, which would be an unlikely aim of the statute.

I mention without developing in detail a point made on the use in section 17 (1) (b) of a reference to a right of action accruing. Why, it was said, was not that phrase used if that was all that was meant? Section 17 is in a different Part of the Act, and the phrase is only used as part of the definition of a person bringing an action and in no sense as part of the description of a terminus a quo for limitation purposes. It can afford no guidance.

Section 14 (1) of the Act provides that in the computation of a prescriptive period:

"(a) time occurring before the commencement of this Part of this Act shall be reckonable towards the prescriptive period in like manner as time occurring thereafter, but subject to the restriction that any time reckoned under this paragraph shall be less than the prescriptive period."

The argument is that since the full period of five years had expired before that commencement (25th July 1976) none of it was reckonable towards the five-year period, and the proceedings were commenced in November 1976 well within five years of 25th July 1976. If this were right and four years 364 days had elapsed before 25th July 1976 negative prescription would operate under the Act on 26th July 1976, but if five years or more had elapsed by 25th July 1976 it could not operate until 1981. Counsel for the appellant admitted that this would be absurd and could offer no suggestion why it should have been intended. The draftsmanship is inept but in my opinion it is possible to deduce from it the intention afortiori that if time occurring before the commencement of this Part and overrunning that commencement is more than the prescriptive period it shall count.

For these reasons I am of opinion that this appeal fails.

LORD KEITH OF KINKEL .—My Lords, this appeal from the Second Division of the Inner House raises questions as to the proper construction of certain provisions of the Prescription and Limitation (Scotland) Act 1973.

The admitted facts are as follows. In 1970 the pursuer purchased for purposes of redevelopment certain heritable property in Dumfries. The defenders, a firm of solicitors, acted for him in carrying through the purchase. Part of the subjects was occupied as a shop by the Dumfries and Maxwelltown Co-operative Society Limited under a lease the terms of which provided for its termination at Whitsunday in any year upon 40 days' prior notice in writing. The pursuer instructed the defenders to take steps to terminate the lease at Whitsunday 1971. The defenders failed to give the requisite 40 days' notice, with the result that the Co-operative Society was entitled to, and did, remain in possession of the premises until the lease was duly terminated at Whitsunday 1972.

On 3rd November 1976 the pursuer raised the present action against the defenders claiming damages upon the ground of negligence or alternatively breach of contract in respect of their failure to give the Co-operative Society the notice required to terminate the lease at Whitsunday 1971. The damages claimed include sums by way of pecuniary loss some of which are said to have been incurred before and some after 3rd November 1971.

The defenders pleaded that any obligation incumbent upon them to pay damages to the pursuer had been extinguished by the operation of quinquennial negative prescription under Part I of the Act of 1973. The case came before the Lord Ordinary (Lord Stott) on Procedure Roll, and he allowed a proof before answer, holding that prescription did not operate to extinguish the defenders' liability to pay damages for losses arising after 3rd November 1971. The defenders reclaimed, and on 14th July 1978 the Second Division (the Lord Justice-Clerk, Lord Wheatley, Lords Kissen and Thomson) recalled the Lord Ordinary's interlocutor and dismissed the action. The pursuer now appeals to this House.

By section 6 (1) of the 1973 Act it is enacted:

"If, after the appropriate date, an obligation to which this section applies has subsisted for a continuous period of five years—(a)without any relevant claim having been made in relation to the obligation, and (b) without the subsistence of the obligation having been relevantly acknowledged, then as from the expiration of that period the obligation shall be extinguished."

By virtue of subsection (2) and Schedule 1 to the Act, the obligations to which section 6 applies include "any obligation arising from liability (whether arising from any enactment or from any rule of law) to make reparation."

By virtue of subsection (3) the expression "appropriate date" in subsection (1) means, in relation to an obligation arising from a liability to make reparation, "the date when the obligation became enforceable."

Section 11 (1) of the Act provides:

"Subject to subsections (2) and (3) below, any obligation (whether arising from any enactment, or from any rule of law or from, or by reason of any breach of, a contract or promise) to make reparation for loss, injury or damage caused by an act, neglect or default shall be regarded for the purposes of section 6 of this Act as having become enforceable on the date when the loss, injury or damage occurred."

Subsections (2) and (3) are not relevant for present purposes.

It was argued by counsel for the appellant that, on a proper construction of section 11 (1), section 6 (1) did not operate to extinguish the respondents' obligation to make reparation for those items of loss resulting from their negligence which the appellant had suffered less than five years before the raising of the action, i.e., after 3rd November 1971. It was accepted that the right to recover in respect of items of loss suffered before that date was cut off, and it was not suggested that more than one action could consistently with principle be founded on the same act, neglect or default, but it was maintained that each item of pecuniary loss was properly to be regarded separately as rendering enforceable, in respect of that particular item, the obligation to make reparation.

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

Support for the appellant's argument was sought to be gathered from the reference in section 17 (1) (b) of the Act to the accrual of a right of action, it being suggested that if section 11(1) intended to do no more than indicate the moment of concurrence of injuria and damnum as the point from which time was to run, a similar reference would have been appropriate there. But section 17 appears in the part of the Act dealing with limitation of actions of damages for personal injuries, a topic having historically an entirely different legislative background from negative prescription. Further, the accrual of a right of action is not in section 17 (1) (b) laid down as the terminus a quo any limitation period is to run. In the circumstances no inference favourable to the appellant's argument can properly be drawn.

Counsel for the appellant submitted a further and quite separate argument founded on the provisions of section 14 (1) (a) of the Act, which are:

"In the computation of a prescriptive period for the purposes of any provision of this Part of this Act—(a) time occurring before the commencement of this Part of this Act shall be reckonable towards the prescriptive period in like manner as time occurring thereafter, but subject to the restriction that any time reckoned under this paragraph shall be less than the prescriptive period."

The Act was passed on 25th July 1973, and Part I came into force three years later. The argument was that since more than five years had elapsed between Whitsunday 1971 and the commencement of Part I on 25th July 1976, no part of that time was to be reckoned towards the prescriptive period, so that only the short time between 25th July 1976 and the raising of the action on 3rd November 1976 fell to be so reckoned.

This argument also must be rejected. The effect of the last part of paragraph (a) is that, in reckoning the prescriptive period, that part of any time occurring before the commencement of Part I which is allowed to be taken into account must be less than five years. So, for example, if ten years had elapsed before the commencement of the Act, only four years and 364 days of that time would be reckoned towards the prescriptive period, which would thus expire one day after the commencement of Part I of the Act. The evident purpose of the provision, which is a transitional one, is to allow potential pursuers whose claims will become subject to the five-year prescriptive period on the commencement of Part I, to have the three-year period between the passing of the Act and the commencement of Part I available for the purpose of considering their position and taking timeous proceedings.

My Lords, for these reasons I am of opinion that the decision of the Second Division was correct and should be affirmed. I would dismiss the appeal.