Damages

While the language used by the judge in that passage ("might" and "could") permits the argument to be advanced, it is clear from other parts of his Opinion that he understood the need for loss to be established on a balance of probabilities. At paragraph 176, for example, he said:

"The critical questions are whether there is sufficient proof of the existence of an available market, which as a result of breach of duty on the part of the creditors, has not been approached, and which, if approached, would have been likely to have produced a better price than was in fact achieved".

"The pursuer's averments about the hope value indicate that the amount of the discount from the net developable value of the subjects, which is substantial, all depends upon how high the purchaser considers the hope to be. This in turn raises the question whether there was in fact anyone in the market at that time who was willing to pay more than the agricultural value of the land to reflect this. It is this question which the pursuer's averments completely fail to address....It is clear that, because of the planning history of the land and the lack of positive indications in favour of permission for development at the time of the sale, it would have been a wholly unreasonable restriction on the defenders' right to sell the subjects for them to be required to have insisted on a price which reflected a hope value for development before they accepted any offer received by them after advertisement. In my opinion the creditor is not to be subjected to the risk of challenge simply on the theory that the subjects may have had a greater value than was realised by the sale. What matters is the reality of the market place in which the subjects are exposed at the time when he decided to sell. So long as he takes all reasonable steps to attract competition in that market it can be expected to find its own level and establish what the property is worth. The creditor is to be criticised for not taking further steps to attract an appropriate purchaser only if there is evidence to show that had these steps been taken a better bargain would have been achieved. So it would only be if the pursuer is in a position to prove that there was somebody in the market at the time who could be reached by advertisement in the manner described by him, and who was willing to pay an enhanced value to reflect the hope of development, that his case against the defenders can get off the ground. His failure to aver that any such person existed, and that a price at the enhanced value was in fact capable of being obtained in the market at the relevant time, is fatal to the relevancy of his case."

"The trial judge has come to certain conclusions of fact; your Lordships are entitled and bound, unless there is compelling reason to the contrary, to assume that he has taken the whole of the evidence into his consideration."

In the present case, the "omissions" in question appear to us to be unsurprising, and we draw no adverse inference from them.

"And the fact you have used the word 'disappointing', would that suggest that the valuations that had been given tended towards the hope end of the spectrum rather than the more solid expectation end?"

He answered:

"No, I think the reason I used the word 'disappointed' was that I was disappointed all round that that was the price, which in my own view was lower than expectation, expected, although not totally surprised because of the history."

This evidence appears to us to be of little significance, since Mr Watt's reaction, whether of disappointment or of surprise, was based on a false premise: namely, that proper marketing had taken place. It was not suggested to Mr Watt that his reaction undermined the reliability of his valuation, on the hypothesis that proper marketing had taken place; and we see no reason why the judge should have mentioned this particular part of the evidence in his Opinion.

"On the basis that this course of action is adopted and provided there is a vigorous marketing campaign including extensive advertising then we would expect that the majority if not all of these flats could be disposed of within three to four months."

The judge explained his adoption of the figure of £255,000 as follows:

"Mr Watt was satisfied when he gave his advice to the defenders in September 1996 that there was a residential market for the [subjects]. At that time he produced an aggregate valuation of £267,000 and an estimated restricted realisation price of £243,000. On the basis that there was a vigorous marketing campaign he expected that the majority if not all of the flats could be disposed of within three to four months. To take account of the possibility of the minority of the flats taking a longer period to sell, and in exercising a broad judgement, I propose to use a mid-point figure between £267,000 and £243,000 as the appropriate starting point, namely £255,000."

Counsel did not dispute that the judge was entitled to proceed on the basis that all of the flats should have been sold by 31 December 1996. He argued, however, that Mr Watt's valuation did not support a higher figure, as at that date, than £243,000.

Interest

Introduction

"As at 31 December 1996...the pursuer would have received an ascertainable sum of money after deduction of his indebtedness to the defenders. Because of the defenders' breach of duty, as at that date the pursuer was standing out of his money, and, in my opinion, the defenders as the wrongdoers were wrongfully withholding money from him. He could have used that sum to his advantage either to obtain interest or to reduce other borrowings."

The judge decided that interest should run from the date of decree until payment on the aggregate of £66,400 and £50,600, the latter sum being the amount of the interest up to the date of decree. In that regard, the judge said:

"In my opinion, when a decree is granted and that decree includes within it a proportion of interest assessed under reference to section 1(1) of the Act [viz the Interest on Damages (Scotland) Act 1958, as amended by the Interest on Damages (Scotland) Act 1971], that decree, inclusive of all its constituents, becomes a decree upon which simple interest begins to run at the relevant rate. If the contrary were the case it would allow a defender, in relation to the accrual of interest to date of decree, to delay without penalty the payment of that interest."

Notwithstanding the form of the pursuer's conclusion, the judge granted decree:

(1) for payment of £66,400;

(2) for payment of interest at the judicial rate on £66,400 from 31 December 1996

until the date of decree; and

(3) for payment of interest at the judicial rate on £117,000 from the date of decree

until payment.

This was challenged on the basis that the judge had awarded interest upon interest. It was submitted that interest should have been awarded only upon the principal sum of £66,400, from 31 December 1996 until payment.

Interest at common law

"I. OF INTEREST, NOMINE DAMNI. - In observing the difference between a claim for damage on breach of a pecuniary obligation, and a claim for damage on breach of an ordinary contract, it is obvious that the general principle upon which both depend is the same. Wherever one suffers loss by breach of contract, he, by whose failure in his engagement the loss comes, is bound to indemnify the suffering party; and the difference between DAMAGE in ordinary contracts, and INTEREST in pecuniary obligations, arises from the nature of the injury which the party in those several contracts may be supposed to have in contemplation at entering into the contract, as the inevitable consequence of failure .... In pecuniary obligations there is not necessarily any particular injury or damage presented to the debtor, which he is to lay his account with as the inevitable consequence of breach of contract; but the evil suffered is the extent of the loss sustained, by not gaining the ordinary legal profits of money, or what is necessary to be paid in order to replace it from another source. This claim for interest on account of damage suffered, is not repugnant even to the Canon law; and where damage could be shewn actually to have arisen from breach of engagement, a claim for it seems to have been allowed under that system. But according to the juster principles of Roman jurisprudence, not only an express breach of contract, but also an inconvenient delay in payment, gave a claim for interest.- Minus solvit qui tardius solvit nam et tempore minus solvitur. Since the prejudice against the taking of interest expired on the Reformation, the law of Scotland has been settled, that breach of contact, or mora in payment, raises this claim without any injury into actual damage, and estimating all losses arising from this cause by the same rule, viz. according to the legal rate of interest."

The same understanding of interest ex mora debitoris as being compensatory in nature can be seen in the judicial decisions discussed below, and is epitomised in Lord Kincairney's dictum in Roissard de Bellet v Scott's Trustees (1897) 24 R 861 at page 865:

"In the ordinary case the damage due for delay in payment of money is nothing but interest."

"Lord Westbury's dictum requires to be applied in any particular case in the context of the transaction in question. The expression 'by virtue of the principal sum of money having been wrongfully withheld, and not paid on the day when it ought to have been paid' does not confer a wide discretion on the court or on an arbiter to determine, untrammelled by legal rules, the date from which interest is to run.

In relation to contractual debt parties may expressly agree the date or event from which interest will run on any outstanding principal sum. In some cases (for example, contracts of loan) the law will imply an obligation to pay interest from the date when the principal sum is due. Otherwise, subject to the exception (admitted at least in the case of open accounts) of interest running from a specified date following the making in advance of a demand to that effect, modern authority indicates that in general interest runs on contractual debts from judicial demand."

"It is just as much liable to interest from that day [viz. the date of citation], up to the time of payment, as the principal. The party refusing payment on the citation has put himself in mora, and is just as much liable to pay interest upon that as upon the principal, or any other debt which one man owes another... it is not because it is interest, but because it is the subject matter of the action, that the Scotch law gives interest, contrary to the principle of the English law, from the instant that the party being called upon to pay, and who ought to pay on the citation, refuses to pay, and thereby becomes, under the Scotch law, in mora."

In Maclean v Campbell the same point was made, for example by Lord Murray (at page 611):

"The pursuer has been found entitled both to principal and interest down to the date of citation. The principal and interest together form the sum that was due, and therefore on both the defenders ought to pay interest from that date."

Lord Cowan, in the same case, cited the speech of Lord Brougham LC in Napier v Gordon, and observed (ibid):

"Here it is clear that the claim for the principal and interest forms the subject-matter of the action."

The difference between the approach adopted in these decisions, and the general approach to interest on debt (i.e. that interest runs from the date of citation), thus reflected the fact that the arrears of interest were themselves a principal debt forming part of the subject-matter of the action.

"What is really due at the date of citation is two sums - first, principal, second, interest upon the principal from the date when interest became due either ex pacto or ex lege until the date of citation, and these two sums might have been sued for as one sum upon which interest would run from the date of the legal demand, i.e. the date of citation."

That approach to the appropriate forms of conclusion was followed in the Encyclopaedia of Scottish Legal Styles (1935), Vol. 1, pages 55-59, and is currently followed in Green's Litigation Styles, pages A2051 and A2058. It is to be noted that, if that approach is followed, the court does not pronounce a decree under which interest runs on the interest accruing between the date of citation and the date of decree: that is because the interest accruing after citation on the debts of which payment has been wrongfully withheld is not itself a principal debt forming part of the subject-matter of the action.

"one in which the defenders had conceded their liability to pay accrued interest as at [the relevant date], and in which that date was to be deemed to be the date when the arrears became due and payable"

(per Lord President Emslie at page 207). Payment of the arrears having been judicially demanded, interest accordingly ran on the arrears. The Lord Ordinary, Lord Ross, explained (at page 201):

"As Lord Cowan pointed out in Maclean v Campbell, at p. 611, under reference to Napier v Gordon, where the subject-matter of the action is interest, the law of Scotland may award interest on that interest, In ... the instant case the outstanding interest is in the same position as a principal sum which has been wrongfully withheld."

"This common law principle [viz. the principle stated by Lord Westbury in Carmichael v Caledonian Railway Co and by Lord Atkin in Kolbin & Sons v Kinnear & Co] was applied to awards of damages. The practice both in England and in Scotland was that interest was not due on sums awarded as damages until the making of the award. As Lord Justice-Clerk Thomson said in Macrae v Reed & Mallik Ltd 1961 SC 68 at p. 72: 'It has long been our practice that where, in actions of damages, damages are awarded interest runs only from the date of the final decree. The reason is that it is then, and only then, that the illiquid claim for damages is quantified and made liquid. Once there is a final decree for a specified sum that sum is payable at the date of the final decree, and if it is not then paid, it carries interest as payment is wrongly withheld. That is in consonance with the accepted principle as laid down in Carmichael by Lord Westbury where he said (at p 131): 'Interest can be demanded only in virtue of a contract, express or implied, or by virtue of the principal sum of money having been wrongfully withheld, and not paid on the day when it ought to have been paid'."

"Quantification will generally fix the earliest date from which interest can reasonably be taken to run and that will generally coincide with the date of decree, where the pursuer is successful."

Lord Keith added that, where there was a frivolous defence or an unjustified appeal or other obstructive procedure designed to hold up payment, that might constitute wrongful withholding. In such circumstances, the court had on occasion awarded interest on damages from a date prior to the final decree (e.g. Clancy v Dixon's Ironworks Ltd 1955 SC 17), although there appears to have been no case in which interest was awarded from an earlier date than the date on which the amount of the damages was fixed (cf. British Railways Board v Ross and Cromarty Council 1974 SC 27 per Lord President Emslie at page 39).

"(1) In any proceedings tried in any court of record for the recovery of any debt or damages, the court may, if it thinks fit, order that there shall be included in the sum for which judgment is given, interest at such rate as it thinks fit, on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment: Provided that nothing in this section -(a) shall authorise the giving of interest upon interest; or (b) shall apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise; ... ".

"In practically every case a judgment against the defendant means that he should have admitted the claim when it was made and have paid the appropriate sum for damages"

(para. 8). The Committee saw no reason to distinguish in that regard between debts, damages for breach of contract, special damages for tort, and cases where general damages were given, as for instance for libel, or for pain and suffering in personal injury cases.

"Both the Inner House and the House of Lords have discretion to award interest from a date earlier than that of their judgment in an appeal. It is not clear, however, what is the earliest date from which they may award interest. It is not the normal practice for this discretion to be exercised, because the party who is unsuccessful in the Court of first instance has a right to appeal, and the delay caused by the appeal is lawful and is not generally regarded by the Court as unreasonable ... But there are some reported cases in which interest on damages has been awarded either from the date of the jury's verdict, or from the date on which the verdict might have been applied but for unjustifiable delay by the defender."

"The former is the date applicable in England [under section 3(1) of the 1934 Act], but we consider that, if any change is to be made in the law of Scotland on this matter, the earliest date from which the court should be empowered to award interest is the date of citation. We reach that view because we think that cases must be rare in which it could be equitable that a defender should be found liable to pay interest on an award of damages from a date earlier than that on which he had received a formal claim for payment by being cited. Even this proposal involves a departure from strict adherence to the principle at present accepted in Scotland that interest is not payable on damages until the amount of damages is liquidated. Such a departure might be justified on the theoretical ground which was apparently accepted by the English Law Revision Committee (Cmd 4546, paragraphs 8 and 9) - viz, that when the court makes an award of damages it in effect decides that the defender should have admitted the claim when it was made and that he should then have paid the appropriate sum in damages. In our view a more important reason for making such a departure is the practical consideration that it would remove the interest which a defender at present generally has in delaying proceedings"

(para. 3). The Committee added (at para. 5):

"In the event of a discretionary power such as is suggested being given to the Courts, we assume that the normal practice of awarding interest only from the date of final decree would continue except where the defender had caused unreasonable delay."

The Committee's recommendation was:

"That all Courts having jurisdiction in questions of damages should be empowered to award interest from the date of citation."

"1.-(1) Where the court having jurisdiction in any action for damages pronounces an interlocutor decerning for payment by any person of a sum of money as damages, the interlocutor may, if the circumstances warrant such a course, include decree for payment by that person of interest on the sum or any part thereof at such rate as may be specified in the interlocutor, from such date as may be so specified (being a date not earlier than the date on which the action was commenced against that person) until the date of the interlocutor.

(2) Nothing in this section shall-

(a) authorise the granting of interest upon interest, or

(b) prejudice any other power of the court as to the granting of

interest, or

(c) affect the running of any interest which apart from this section would run by virtue of any enactment or rule of law."

"The ruling principle must be that, as interest assumes the existence of a principal sum, interest falls to be awarded only where there is a principal sum, which, but for the law's normal delays, the pursuer would have enjoyed. This is consonant with the accepted principle that ordinarily interest is payable only where there is a principal debt payment of which has been improperly or unjustifiably withheld."

Like Lord Justice-Clerk Thomson, Lord Patrick regarded the Act as enabling the court to compensate the successful pursuer for delay in the receipt of damages in respect of losses which he had sustained, stating (at pages 76-77):

"The cardinal rule in awards of damages has hitherto been that the tribunal which tries the case should seek to put the injured party, so far as money can do so, into the same position as he would have been if he had not been injured, and I can see nothing in the statute to lead me to believe that that cardinal rule has been departed from. On the contrary, I think the purpose of the statute was to give the Court power to give fuller effect to that cardinal rule, a power which it did not previously have. Thus, a case, such as this, might not come to trial, there being no undue delay on the part of the pursuer in bringing his action, for a year or more after the accident. In such a case, the injured pursuer would commonly be losing wages week by week until the date of the trial. The Court had no power to compensate him except by awarding him his out-of-pocket loss established at the date of the trial. It could not compensate him for the fact that he should have had these wages in his pocket week by week as time elapsed until the date of the trial. Now, the Court has been given power to compensate him for that fact by awarding him interest on his pecuniary loss before the trial at such rate and from such date or dates as will in the Court's judgment adequately compensate him in this matter."

Lord Mackintosh noted (at page 79) that the Act dealt only with the interest, if any, which was to run on a sum of damages prior to the date of the interlocutor decerning for payment of them, and had nothing to do with interest payable on them from the date of the decree until payment:

"That latter matter was already fully provided for under existing procedure whereby interest, usually at five per centum, is invariably payable on the whole sum of the damages from the date of decree, the damages being then regarded as a debt already due and payable, and, as such, interest runs on it ex lege. The purpose of the Act was, as its long title shows, to amend our law and to make provision, where the circumstances of the case warrant it, for interest being given on an award of damages from some date earlier than the date of decree."

After referring to the general rule that interest was not given on damages until they were liquidated, Lord Mackintosh suggested (at page 80) that the intention of the Act was

"to allow interest to run on a successful pursuer's damages, or on such part of them as might be reasonably ascertainable before the date of the decree, so as to compensate him for being kept out of his money and so deprived of its use throughout the progress of a litigation through no fault of his own."

Finally, Lord Strachan observed (at page 85):

"In my opinion, the distinction between principal and interest must be kept in mind, and, primarily at all events, interest should be granted under section 1(1) only in circumstances which are generally recognised by law as giving rise to a claim for interest."

In that regard, Lord Strachan cited the principle that, apart from contract, interest was payable only by virtue of a principal sum having been wrongfully withheld and not paid on the day when it ought to have been paid, as stated by Lord Westbury in Carmichael v Caledonian Railway Co and by Lord Atkin in Kolbin & Sons v Kinnear & Co, and continued (at pages 85-86):

"It seems to me that it is some such principle which should govern the exercise of the power conferred by section 1(1) of the Act of 1958."

The Administration of Justice Act 1969

"(1A) Where in any such proceedings as are mentioned in subsection (1) of this section [section 3 of the Act of 1934], judgment is given for a sum which (apart from interest on damages) exceeds £200 and represents or includes damages in respect of personal injuries to the plaintiff or any other person, or in respect of a person's death, then (without prejudice to the exercise of the power conferred by that subsection in relation to any part of that sum which does not represent such damages) the court shall exercise that power so as to include in that sum interest on those damages or on such part of them as the court considers appropriate, unless the court is satisfied that there are special reasons why no interest should be given in respect of those damages."

The effect of the new provision was to make it compulsory for the court to exercise its power under section 3(1) of the 1934 Act in personal injury cases, unless there were special reasons not to do so. In requiring that the interest so awarded be included in the sum for which judgment was given (and, therefore, in the sum which then attracted interest as a judgment debt), section 3(1A) was consistent with section 3(1). The only innovation was to oblige the court, in personal injury cases, to apply the same principles as under the 1934 Act (Jefford v Gee at page 143 per Lord Denning MR).

The Interest on Damages (Scotland) Act 1971

"First, because of these differences between Scotland and England [i.e. between section 1 of the 1958 Act and section 3 of the 1934 Act, as amended], a Scottish pursuer today can claim interest for a shorter period, that is, from the date of the commencement of the court action, and not from the date of the accident. Secondly, there is no presumption that interest should be payable in the personal injuries case"

(HC Deb. Vol. 810, cols. 1185-1186, 29 January 1971).

"(1) Where a court pronounces an interlocutor decerning for payment by any person of a sum of money as damages, the interlocutor may include decree for payment by that person of interest, at such rate or rates as may be specified in the interlocutor, on the whole or any part of that sum for the whole or any part of the period between the date when the right of action arose and the date of the interlocutor.

(1A) Where a court pronounces an interlocutor decerning for payment of a sum which consists of or includes damages or solatium in respect of personal injuries sustained by the pursuer or any other person, then (without prejudice to the exercise of the power conferred by subsection (1) of this section in relation to any part of that sum which does not represent such damages or solatium) the court shall exercise that power so as to include in that sum interest on those damages and on that solatium or on such part of each as the court considers appropriate, unless the court is satisfied that there are reasons special to the case why no interest should be given in respect thereof."

"decree for payment ... of interest, at such rate or rates as may be specified in the interlocutor, on the whole or any part of that sum".

The distinction between the sum awarded as damages, on the one hand, and interest on that sum on the other hand, was maintained.

"exercise that power [viz. 'the power conferred by subsection (1)'] so as to include in that sum [viz. 'a sum which consists of or includes damages or solatium in respect of personal injuries'] interest on those damages and on that solatium".

"In short, I understand the view of the court in Macrae to have been that the exercise of the power conferred by the subsection had to be approached upon a discriminating and selective basis, and that the ruling principle in the exercise of the power must be that, as interest assumes the existence of a principal sum, interest falls to be awarded only where there is a principal sum which, but for the law's normal delays, the pursuer would, before the date of decree, have enjoyed. This ruling principle was seen to be consistent with the accepted general principle of law that, ordinarily, interest is payable only where there is a principal debt, payment of which has been wrongly withheld."

His Lordship construed the new section 1(1), as substituted by the 1971 Act, as proceeding on the same basis as section 1(1) of the 1958 Act in its original form, subject to the change in the base date from which interest might run:

"I am of opinion that the principle which should be followed should be that laid down in Macrae, namely, that interest should be awarded, in the exercise of the power, upon those parts of the whole sum of damages payment of which to a pursuer has been withheld through the particular litigation's normal delays. As was explained in Macrae, this is in consonance with the accepted general principle laid down in Carmichael, which I have set out earlier in this opinion. It is also the principle which appears to have commended itself to the Court of Appeal in its consideration of the somewhat similar English legislation [in Jefford v Gee]. Like Lord Patrick in his consideration of the old form of subsection (1), I can see nothing in the language of the new subsection (1) to lead me to believe that the cardinal rule in awards of damages is to be departed from, and by giving effect to to the principle which I have just discussed the court will, it appears to me, be able to give even fuller effect to the cardinal rule than was possible under the old subsection (1)."

On that approach, the new section 1(1), like its predecessor, enabled the court to treat the damages, or elements in the damages, as being equivalent to a debt owed by the defender to the pursuer prior to the date of decree. The principal difference between the new provision and its predecessor was that, whereas the 1958 provision enabled the court to treat damages as being wrongfully withheld (and, therefore, as bearing interest) only as far back as the date of citation, the new section 1(1) enabled interest to be awarded from an earlier date.

"Turning to the new subsection (1A), I am satisfied as matter of construction that, in the absence of special reasons why no interest should be given, the court is being directed therein to exercise the power described in subsection (1) in the case of all awards of damages in respect of personal injuries. It is 'that power' which is to be exercised, and the words can only refer to the power mentioned in the bracketed passage in subsection (1A), i.e., the power conferred by subsection (1). Further, not only is there no indication in subsection (1A) that the power is to be exercised in a way different from the power which may be exercised in the court's discretion, but there are, in my opinion, clear indications in the subsection itself which indicate that it is to be exercised in the same way. It is to subsection (1) that one must look to find out about rates of interest, the base date and the period of interest; and I refer, further, in particular, to the words which I have already quoted, viz, ' ... interest on those damages and on that solatium or on such part of each as the court considers appropriate ... ' A new and different problem, however, is raised by what the subsection says as to the result to be achieved by the exercise of the power. It is to be exercised 'so as to include in that sum interest.' In my opinion effect must be given to these words, but I do not consider that it is practicable to follow the direction literally. What, in my opinion, should be done, bearing in mind that any interest elements in an award may be subject to tax, is to decern for payment of a sum of damages, assessed in accordance with accepted principles, together with an additional sum derived from interest at specified rates, for specified periods ending with the date of the interlocutor, on those parts of the total sum of damages which should bear interest. Damages would therefore consist of the addition of two sums, and on the resulting sum interest would no doubt run from the date of decree until payment."

His Lordship therefore awarded interest on the past pecuniary losses, and on the past element of solatium, and granted decree for a global sum which comprised both the damages and the awards of interest.

"to require the Court to include relevant interest elements in every sum decerned for in actions of damages for personal injuries unless there are special reasons for not doing so"

(per Lord President Emslie at page 60). Accordingly, the appropriate form of conclusion in an action of damages for personal injuries was for payment of a specified sum with interest thereon at the judicial rate from the date of decree until payment, since

"in every conclusion or crave in the type of action with which section 1(1A) is concerned the sum sued for must be deemed to cover all competent heads of damages, including any interest components which may fall to be included in any award in implement of the requirement of the subsection"

(per Lord President Emslie, ibid). In the same case, Lord Cameron explained (at page 62) that a different form of conclusion was appropriate in cases falling within the scope of section 1(1), since, under that provision,

"the interest which may be decerned for is additional to the sum awarded in name of damages itself and therefore, does not form part of it."

His Lordship observed (ibid) that section 1(1A) introduced "a new and different concept", namely that "the interest found due forms part of the sum decerned for". As we have explained, the origin of that concept lay in the English Act of 1934.

"I agree with counsel for both parties that the Act of 1958 did not sweep away the previous law relating to damages. As Lord Mackintosh observed in Macrae v Reed & Mallik Ltd. at p. 80, the Act did not profess to abrogate the general rule relating to damages nor to do away with the former practice. Accordingly the general principle laid down in Carmichael v Caledonian Railway Co (1870) 8 Macph. (H.L.) 119 and Kolbin & Sons v Kinnear & Co still applies, that is to say, that a pursuer may recover interest by way of damages where he is deprived of an interest bearing security or a profit producing chattel or where money has been wrongfully withheld. Where a delict has been committed, the delinquent is liable to pay damages. In the normal case, however, the amount of damages cannot be quantified there and then, and damages cannot be regarded as being wrongfully withheld at a date when they are incapable of quantification. On the other hand, even though damages have not been quantified, if they become capable of ascertainment then the injured party can properly be regarded as standing out of his money, and the damages can be regarded as being wrongfully withheld (Fraser v Morton Wilson and Bell's Sports Centre v Briggs & Sons).

The Act of 1958 empowered the court to award interest from a date not earlier than the date on which the action was commenced against the defender, i.e. the date of citation. The Act of 1971 extended that power to an earlier date by enabling the court to award interest for the whole or part of the period between the date when the right of action arose and the interlocutor awarding damages. The right of action may well have arisen long before the pursuer has cited the defender in the action of damages. I agree with Lord Maxwell in Buchanan v Cameron 1973 S.C. 285 that the mere fact that a right of action arose on a particular date does not per se justify an award of interest from that date, but in my opinion interest may properly be awarded from a date when the damage suffered was capable of ascertainment (Bell's Sports Centre v Briggs & Sons). This appears to me to be consistent with the principle adverted to by Lord Keith of Avonholm in F.W. Green & Co Ltd v Brown & Gracie Ltd 1960 S.L.T. (Notes) 43 where he observed of damages for breach of contract that quantification would generally fix the earliest date from which interest could reasonably be taken to run. In my opinion, however, even if damages have not been quantified, interest may reasonably be held to run from a date when the damages may reasonably be regarded as quantifiable or capable of ascertainment. From that date the wrongdoer can reasonably be regarded as wrongfully withholding the damages."

Following that approach, the court upheld the decision of the Lord Ordinary to award interest under section 1 on certain elements of the damages from a variety of dates until the date of decree. The interlocutor was silent as to interest after the date of decree, which would therefore run at common law on the damages for which the court had decerned.

The present case

"As at 31 December 1996 ... the pursuer was standing out of his money, and, in my opinion, the defenders as the wrongdoers were wrongfully withholding money from him."

That conclusion is not challenged. The money which, as the judge found, was wrongfully withheld was the sum of £66,400 at which he assessed the pursuer's damages. Since that sum had been wrongfully withheld since 31 December 1996, it was open to the judge, under section 1(1) of the 1958 Act, not only to decern for payment of that sum of money as damages, but also to include in the interlocutor decree for payment of interest on that sum from 31 December 1996.

Conclusion