Dunlop v M'Gowans

An obligation to make reparation for loss, injury or damage caused by one act, neglect or default is single and indivisible. It cannot be divided into separate obligations according to when individual items of pecuniary loss arise.

For quinquennial negative prescription, time begins when injuria concurs with damnum. The loss need not then be capable of exact calculation. It is sufficient that quantification is possible by estimation, although later events might permit greater accuracy.

Under the transitional provision, pre-commencement time exceeding the prescriptive period is counted only to the extent permitted by the statutory restriction. The construction must preserve the intended short post-commencement opportunity to pursue an existing claim.

The pursuer bought property for redevelopment and instructed the defenders, his solicitors, to terminate a shop lease at Whitsunday 1971. Their failure to serve timely notice meant that the tenant remained until Whitsunday 1972. On 3 November 1976 the pursuer claimed damages for negligence or breach of contract.

The Lord Ordinary allowed proof before answer, holding that prescription did not extinguish liability for losses arising after 3 November 1971. The Second Division recalled that interlocutor and dismissed the action.

The appeal concerned whether section 11(1) of the Prescription and Limitation (Scotland) Act 1973 treated each item of pecuniary loss as giving rise to a separate prescriptive starting date. A further issue concerned how section 14(1)(a) treated time elapsed before Part I commenced.

1. Appeal dismissed unanimously. Lord Keith of Kinkel delivered the leading speech. Viscount Dilhorne, Lord Edmund-Davies and Lord Fraser of Tullybelton agreed with his reasoning. Lord Russell of Killowen gave concurring reasons. The House affirmed the Second Division's dismissal of the action.

2. Per Lord Keith, section 11(1) of the Prescription and Limitation (Scotland) Act 1973 did not permit loss caused by one act, neglect or default to be divided according to the dates when individual items of pecuniary loss arose. The obligation to make reparation was single and indivisible, and only one action could be pursued to enforce it. The right of action accrued when injuria concurred with damnum.

3. The relevant loss occurred at Whitsunday 1971, when the pursuer was unable to obtain vacant possession and proceed with redevelopment. The loss was then capable of quantification by estimation. The prospect that later events might permit greater accuracy did not defer the commencement of prescription. Lord Russell likewise rejected any distinction between “pecuniary loss” and “potential loss”, treating both as matters concerning quantification of the harm already sustained.

4. Per Lord Fraser, treating every component of development costs or lost rent as a separate loss would produce numerous and uncertain starting dates. Clear statutory language would have been needed to justify a construction producing that confusion.

5. Per Lord Keith and Lord Russell, section 17(1)(b), which appeared in the distinct statutory regime governing limitation of personal-injury actions, did not support the proposed construction of section 11(1). Its reference to accrual of a right of action did not prescribe the starting point of a limitation period.

6. Section 14(1)(a) also did not give the pursuer a fresh five-year period from the commencement of Part I. Where more than five years had already elapsed, the provision permitted only four years and 364 days of pre-commencement time to be reckoned, so that prescription expired one day after commencement. Its transitional purpose was to give potential pursuers the three years between enactment and commencement in which to consider and pursue affected claims.

1. House of Lords: The appeal was dismissed unanimously. The Second Division's interlocutor was affirmed.

2. Second Division of the Inner House: On 14 July 1978 the court allowed the defenders' reclaiming motion, recalled the Lord Ordinary's interlocutor and dismissed the action.

3. Court of Session, Outer House: Lord Stott, sitting as Lord Ordinary on Procedure Roll, allowed proof before answer. He held that prescription did not extinguish liability for losses arising after 3 November 1971.