Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2010] CSOH 69
	OPINION OF MORAG WISE., Q.C (Sitting as a Temporary Judge) in the cause ALISTER MONAGHAN and ANOTHER (A.P.) Pursuers; against DEREK BUCHANAN and OTHERS Defenders: ­­­­­­­­­­­­­­­­­________________

Pursuer: I.G. Mitchell QC; McShane; Brodies LLP

Defender: Hanretty QC; HBM Sayers (Glasgow)

28 May 2010

Introduction

[1] The pursuers purchased a property at 52 Round Riding Road, Dumbarton, G82 2HU on about 13 October 1983. They are suing a firm of solicitors for breach of contract and professional negligence. In short, what is alleged is that the defenders failed to raise an action against an architect prior to the expiry of the 20 year prescriptive period referred to in section 7 of the Prescription and Limitation (Scotland) Act 1973. The case came before me for discussion on the Procedure Roll on the defenders' preliminary pleas.

Submissions for the defenders

[2] Mr Hanretty made a motion to sustain the first and second pleas-in-law for the defenders and to dismiss the action. In support of that motion he presented arguments in four main chapters. First he dealt with the primary issue between the parties, namely that of prescription. Secondly he dealt with alleged inadequacies in the pursuers' averments relating to the architect's duties of care. Then he made criticisms of the averments of loss in the pursuers' case and finally he dealt with a title and interest point relating to the first pursuer.

[3] Reference was made to the relevant averments that set out the history of events that led to the pursuers consulting the defenders. As indicated, in October 1983 they purchased a property in Dumbarton. At some stage in their proposed purchase a certificate was obtained from the architect who had been engaged in the project of building the property. The certificate, signed by the architect, a Mr Clunie, was dated 30 August 1983. It has been produced and incorporated into the pursuers' pleadings (No 6/1 of process). In essence, the architect certified (a) that he had supervised all stages of the construction of the said property and (b) that to the best of his knowledge and belief the work was carried out in accordance with good building practices and conformed to the drawings and specifications, the specifications having been prepared by him and approved by the local authority under the Building Standards (Scotland) Regulations 1971. The pursuers assert in their pleadings that they relied upon Mr Clunie's certificate in the purchase.

[4] The defenders' involvement started when they were instructed by the pursuers in connection with a problem of damage to the property which was believed initially to have been caused by contractors undertaking road works in the adjacent road. The pursuers first consulted the defenders on or about 1 March 2001. It was clear, submitted Mr Hanretty, that what was being consulted on was damage to the property as at 1 March 2001. Until the damage to the property manifested itself no problem with the construction of the house had been apparent.

[5] The contention of the pursuers is effectively that the 20 year prescriptive period referred to in section 7 of the Prescription and Limitation (Scotland) Act 1973 was allowed to expire by the defenders without an action being raised. For that to be correct, the concurrence of iniuria and damnum would require to have taken place on 13 October 1983. It was accepted that for the purpose of section 7 of the 1973 Act knowledge is irrelevant while in relation to the quinquennial prescription in section 6 knowledge is of course important. The relevant issue in this case was a dispute about the date on which there was a coincidence of iniuria and damnum. Under reference to Article 4 of condescendence at page 13 of the Closed Record Mr Hanretty reiterated that what the defenders had been consulted on was damage to the house as at 1 March 2001. Until the building works issue was raised by the pursuers there was no reason to think there was any defect in the construction of the property. He referred also to Article 3 of condescendence at page 10 where the pursuers aver that it was during the course of 1999 that they became aware of subsidence in their home. Mr Hanretty submitted that unless damage is manifest there can be no concurrence of iniuria and damnum. In this context he referred to Strathclyde Regional Council v Border Council and Babtie Shaw 1998 SLT 175. There the defenders had been engaged in laying a trunk main for the supply of water. The defenders had allegedly used a pipe of the wrong strength in one section of the main and damage had subsequently occurred through the pipe in question cracking. The issue at procedure roll was whether the pursuers' claim in contract had prescribed by virtue of the long negative prescription. The view taken was that damnum could only arise with a physical manifestation of the defect in the pipe and not before. Accordingly the plea of prescription failed as it was found that the occurrence of damnum was at the date on which the pipe cracked and not on the date of installation. In support of the submission that there has to be a physical manifestation of damage before damnum can occur reference was also made to the House of Lords decision in the case Pirelli General Cable Works Limited v Oscar Faber and Partners (a firm) 1983 2 AC 1. That case involved an action in tort for damage caused by the negligent design or construction of a building. It was held that the plaintiff's cause of action occurred when the cracks appeared in the chimney in question. Transposing that principle into the facts of the present case, Mr Hanretty argued that if no physical manifestation of the problems with this property appeared until 1999 then the prescriptive period could not have started until that time. Accordingly, he argued, the pursuers' case is fundamentally irrelevant as it is predicated upon the basis that an action had to be raised by October 2003.

[6] So far as the quinquennial prescription was concerned, Mr Hanretty noted that it was admitted on record that the file was transferred from the defenders to new agents in April 2004. On the basis that proceedings required to be raised within 5 years of the physical manifestation of the defects, the relevant 5 year period would expire in July 2004 at which point the defenders were no longer responsible. He advised that he understood that an action had in fact been raised against Mr Clunie thereafter but was sisted pending the outcome of these proceedings.

[7] In short, Mr Hanretty's submission was that the action was fundamentally irrelevant being based as it was upon an alleged failure to raise proceedings by October 2003.

[8] So far as the relevancy and specification of the pursuers' case about the architect's duties of care was concerned, Mr Hanretty submitted that the pursuers' averments in Article 2 of condescendence were inadequate to set up the necessary proximity and reliance on the architect's certificate by the pursuers in their purchase of the property. He suggested that the bald assertion that the pursuers placed reliance on the certificate in purchasing the property was insufficient in circumstances where there was no nexus between Mr Clunie and the pursuers. He invited me to look at the architect's certificate, number 6/1 of process. He suggested it was not worded in a way that would create a nexus between the pursuers and Mr Clunie. The certificate refers to the construction of the property being "solely on behalf of Mr Brown" by Mr Clunie. He drew attention also to the words "to the best of my knowledge and belief" and suggested that this certificate was in very restricted terms, given as it was 8 years after the construction of the property. In any event it related only to the house as originally built and completed in 1975. It could not, he argued, give rise to any reliance 8 years after the event.

[9] Turning to the surveyor's report of 26 August 1983 (No 7/1 of process) which predated the architect's certificate of 30 August 1983, Mr Hanretty submitted that the pursuers' case was inconsistent in that they sought to rely only on the certificate and not on the surveyor's report. At that point in the argument Mr Mitchell interjected and sought to amend his case by introducing averments to incorporate the surveyor's report into his pleadings. There was no opposition to that motion, which I granted during the course of Mr Hanretty's submissions.

[10] Mr Hanretty then noted that the surveyor's report was addressed to the manager of the Bank of Scotland and gave a valuation for the property of £45,000 on the basis that an architect's certificate was available. Thus, he said, the terms of the surveyor's report were known prior to the date of the certificate. In those circumstances, given the restricted terms of the certificate and its date no case had been made out for the pursuers relying on it in the purchase. It would appear that it was the surveyor's report that was relied upon for the purchase not the said certificate. While the surveyor's report did qualify the valuation to there being an architect's certificate, there was no averment on the part of the pursuers that the certificate subsequently produced was sufficient to satisfy that qualification.

[11] So far as proximity was concerned Mr Hanretty submitted that it was clear from its terms that Mr Clunie was restricting his certificate deliberately. He was not issuing the certificate to the world at large. There were averments at Article 2 of condescendence at page 7 that it was Mr Brown, who had instructed Mr Clunie in connection with the construction, who obtained the certificate. Mr Brown was aware that it was to be provided to a purchaser to rely on and it was produced by Mr Brown to the pursuers. Taking those averments together it could not be said that Mr Clunie issued a certificate for the pursuers who relied upon it, despite the bald assertion at Article 6 of condescendence page 16. The pursuers case, submitted Mr Hanretty, was that, but for the negligently issued certificate they would not have bought the house. However, what they required to show was that there was a properly relevant case against Mr Clunie which the defenders had failed to pursue. While initially Mr Hanretty submitted that there were no suitable averments on the basis of the Hunter v Hanley test for negligence, he subsequently accepted that there were sufficient averments in Article 6 of condescendence in relation to that. However, Mr Hanretty maintained his criticisms about whether the pursuers had properly averred what it was that Mr Clunie ought to have done. While one could see that a case might be made out against Mr Clunie had he provided the certificate to those who had instructed him as an architect, the fact remained that Mr Clunie had qualified his certificate by using the expression "to the best of my knowledge and belief" and he had not given it to the pursuers. The issue of whether the pursuers were going to allege that Mr Clunie had lied in relation to his knowledge and belief was simply unaddressed.

[12] The third tranche of Mr Hanretty's argument related to the averments of loss. He submitted that the pursuers' averments of loss in Article 8 of condescendence proceeded on a different hypothesis of fact from those in Article 6. In Article 6 an averment is made in terms that had a certificate been issued which disclosed the true position or in the absence of a certificate that satisfied the surveyor's qualification the pursuers would have chosen not to purchase the house. Towards the end of Article 6 of condescendence there were averments of stress and anxiety which seemed to be suggesting a claim for solatium. In any event the averments of loss did not support the empirical factual averments. Then in Article 8 of condescendence at page 21 the pursuers made averments of the cost of rectifying the defects as they ultimately manifested themselves. In the alternative it is said thereto that they would not have bought the property at all. Mr Hanretty queried how it could be said that a loss would have been suffered on 13 October 1983 given that the pursuers were blissfully unaware of any defects with the property until 1999. In relation to an averment that the total principal sum of damages against Mr Clunie would have been about £30,000 Mr Hanretty noted that there was nothing to explain what heads of loss were comprised within that sum. He argued further that the averments of negligence against the defenders in Article 9 of condescendence insofar as they directed against the defenders did not make sense. He argued that it was unclear what the pursuers would have sued Mr Clunie for.

[13] The fourth and final argument presented by Mr Hanretty was a title and interest point at which his second plea-in-law was directed. In short, the first pursuer has not had any proprietorial interest in the house in question since 1991. If it was being said that he had a claim for solatium then that should be concluded for separately but he could have no patrimonial loss without title. He would have had to have title at the time of the raising of the action.

Submissions for the pursuers

[14] Mr Mitchell opened his submissions by submitting that the defenders' attacks on the pursuers' pleadings displayed a fundamental misconception about the nature of the action. He suggested that Mr Hanretty's arguments assumed that the pursuers were suing over defects to a property. In fact the thrust of the action is the issue of a certificate by an architect in circumstances in which it was negligent for him to do so. In reliance on that certificate the pursuers purchased a house. So long as that was understood then the fallacy of the argument about prescription would be clear. Mr Mitchell maintained that the pursuers' loss occurred at the moment of purchase, either on conclusion of missives or when the price was paid. The iniuria arose through the negligent certificate and damnum arose from the moment they moved into the house. Had they found the plans showing that the house had not been built to specification the day they moved in, they could have sued straightaway. He agreed that there was only one point at which damnum and iniuria coincide.

[15] So far as loss was concerned it was important to draw a distinction between the incurring of a loss and the quantification of a loss. But for the certificate the pursuers would not have bought the house and thus they would not have paid £45,000. But in return for that sum of money they did obtain an asset. One would require to know what the asset was worth compared with what they paid for it in order to try and quantify their loss. Thus one must distinguish the fact of their loss with its quantification. The loss arose because they would not have bought the house but the quantification of their loss had to relate to the value of the house at the date of purchase compared with the sum of money paid for it. Mr Hanretty had proceeded upon the basis that current value might be relevant but Mr Mitchell submitted that that was conceptually wrong. It might be relevant if one was suing for defects in a house but again that was not the basis for the action.

[16] Mr Mitchell then answered some of the detailed criticisms made by Mr Hanretty of the pursuers' pleadings. So far as the contention that there were insufficient averments of the architect's duties of care and alleged negligence I have already recorded that Mr Hanretty ultimately conceded that Articles 4 and 6 of condescendence did list the things that Mr Clunie should have done and set out what the alleged negligence was. Ultimately there was no real dispute that these averments would be habile for proof before answer.

[17] Turning to the criticisms of the architect's certificate, number 6/1 of process, Mr Mitchell noted that this was not addressed to anyone in particular. It was issued four days after the surveyor's report. It is a formal document signed complete with professional qualifications. The first paragraph of the certificate explains who Mr Clunie had been and what his role had been in the construction. So far as the expression "to the best of my knowledge and belief" was concerned Mr Mitchell submitted that this could not avoid a claim for negligence if the substance of the certificate otherwise gave rise to one. In short Mr Clunie's certificate states in terms that the house build was carried out in accordance with good building practice. In relation to the point about the certificate being restricted to the time at which the property was completed in 1975, Mr Mitchell submitted that that might have been a relevant point had an issue been raised about any alterations to the property after it was complete. However there was a specific averment that the departures from the drawings that ultimately manifested themselves would have been evident from 1975.

[18] In any event, argued Mr Mitchell, the agreed facts were sufficient to characterise Mr Clunie as someone who owed a duty of care as a result of applying his particular skill for the assistance of another person whether or not he was in a contractual relationship with them. Reference was made to the locus classicus on this matter by Lord Reid in the case of Hedley Byrne & Co. Limited v Heller and Partners Limited 1964 AC 465 at 502-503. Mr Clunie knew or ought to have known that his certificate would have been relied upon by the pursuers. His certificate was not issued for use by Mr Brown alone. The context in which he provided it was clear and it was a relatively unqualified certificate. When read in conjunction with the surveyor's report which looked for an architect's certificate against a background of their being unable to inspect some parts of the property for defects, the purpose of the certificate was not in doubt.

[19] So far as issues of valuation were concerned, the £45,000 paid for the property was paid on the basis that there was an architect's supervision certificate. So the value of the property depended as much on the certificate as the pursuers' decision did.

[20] In relation to the primary issue of prescription, Mr Mitchell argued that as soon as one took the general point that loss was incurred by the two individuals personally in 1983 a relationship between the prescription point and the title and interest point emerged.

[21] It was accepted that the argument about prescription would effectively determine whether or not the pursuers' case can proceed. However to understand the argument, the issue raised about latent and patent defects required to be addressed. Reference was made to Stewart v Brechin and Co and others 1959 SC 306. It was clear from the opinion of Lord Cameron at page 309 that the way in which one should approach the assessment of loss in such circumstances was to look at the value of the premises and see whether or not there was a diminution in value as a result of the negligence. The proper measure of damages was said to be the difference between the price paid and the value of the subjects as a whole in their actual state at the date of sale. In this case, the principal assumption was that the pursuers would not have bought the house at all. The averments relating to the cost of remedying the defects are simply there as a cross-check. Reference was then made to Martin v Bell Ingram 1996 SC 208 at page 222, where Stewart v Brechin and Co and others was cited as authority for the proposition that the correct approach to the quantification of damages was to take the difference between the price paid and the actual value at the time. The significance of this, according to Mr Mitchell, was that if the measure of damages is the purchase price less actual value, then the damage must arise at the time of purchase. The authorities that Mr Hanretty relied upon were cases against the person who caused the defect. Accordingly had the pursuers sought to sue the builder of the property in question, it would be correct to say that the cause of action would not arise until defects in the construction were noticed. Thus if a workman lays a pipe with a defect damnum does not occur until the pipe cracks. In this case the loss arose the moment the money was handed over. The pursuers paid £45,000 for an asset worth £18,000. The operative negligence was the issuing of the certificate that led them to make the purchase.

[22] Mr Mitchell drew attention to the averments in Article 4 from page 13D to page 14A-B. It was clear from the pleadings that what was being contended was that the architect had in fact issued a certificate which he had no reasonable basis for issuing. That is as much as the pursuers can claim. They cannot know whether the architect issued the certificate because he had not supervised properly or whether he knew of the defects in the building and did not tell the truth when issuing the certificate. Either way the architect failed in his duties because either the supervision had been carried out incompetently or he had failed to carry it out at all. But the loss arose because of the issue of the certificate on which the pursuers relied. As it was agreed that knowledge was not important for the twenty year prescriptive period, one simply looked to see when the negligence occurred which had to be in 1983 the only point at which the pursuers relied on the expertise of Mr Clunie. It was important in this context to distinguish responsibility for the defects from responsibility for the certificate. For Mr Hanretty's argument to be correct, the architect could have claimed that any action raised against him in say 1987 would have been premature as no defects with the property had been noticed at that time. Mr Mitchell contended that could not be correct analysis. It simply could not be the case that a house with defects does not become less valuable until the defects manifest themselves. Reference was made to Beard v Beveridge, Herd and Sandilands 1990 SLT 609. There a firm of solicitors acting for the landlords of certain premises had included in a lease a rent review clause that was subsequently discovered to be inoperable because no mechanism was provided for determining the rent failing agreement between the parities. The lease was executed in 1967 but the discovery of the inoperable clause was in 1987. An action against the successors to the firm of solicitors involved failed on the basis that the coincidence of iniuria and damnum occurred at the date of the execution of the lease in 1967. Mr Mitchell pointed out that in this case it was clear that the pursuers did not know of any defect with the property when they purchased it. They did not know and could not have known that there were defects, thus the quinquennial prescription started to run at the point when they had knowledge in 1999. What had happened in 1983 was that they had purchased a house on the strength of the architect's certificate. It was clear that a lack of knowledge in no way avoided the coincidence of damnum and iniuria even though it would stop the quinquennial prescription starting to run. It was possible for the twenty year prescriptive period to expire before the quinquennial prescription even started to run.

[23] An interesting analogy with the present case could be seen, contended Mr Mitchell, in the English case of Byrne & Another v Pain and Foster 1999 1 WLR 1849. In that case a valuation report was negligently made and the plaintiffs had purchased a property in reliance on it. Defects in the property were later discovered and the case involved the six year time bar period in the relevant English legislation. The issue under discussion was when the cause of action accrued. The Court of Appeal, in affirming the first instance decision, held that a cause of action accrued when the plaintiff first suffered actual damage which was at the time of the exchanging contracts irrevocably committing themselves to acquiring an interest in a property which was worth less than they were led to believe by the valuation report. Similarly in this case, the instant Mr and Mrs Monaghan acquired the property in Dumbarton it was worth less than they paid for it even though they had no knowledge of that. Mr Mitchell argued that further support for his approach could be found in the opinion of Lady Dorrian in the case of The Legal Services Centre Limited v Miller Samuel LLP & Others [2006] CSOH 191. In that case the pursuers, a property development company, sued a firm of solicitors in relation to the negotiation and drafting of certain leases. The particular lease giving rise to the dispute was executed in December 1989 and January 1990. The pursuers contended that they would lose income in the future as a result of certain difficulties with the rent review clause. The action was signetted on 24 April 2004. The defenders contended that any obligation upon them had been extinguished by the quinquennial prescription as there had been a concurrence of iniuria and damnum at the last date of execution of the lease in January 1990. In expressing the view that the pursuers' claim had prescribed, the Lord Ordinary pointed out that at the time of the execution of the lease the pursuers had a less valuable asset than they should have had and would have been able to raise an action at that time. Mr Mitchell reiterated that in this case the negligence in question was not in delivering a defective house but in saying that it was not defective. The pursuers' claim against Mr Clunie was that he told them in 1983 that the house had been properly constructed in accordance with specification when it had not been. Reference was then made to the leading authority in support of the proposition that there could only be one date upon which iniuria and damnum coincided - Dunlop v McGowans 1980 SC 73. Mr Mitchell submitted that it was important to understand the distinction between physical loss and economic loss in this context. Physical loss giving rise to an action for a defect in premises was different from the economic loss the pursuers suffered in spending money on something less valuable than it would have been but for the negligence claimed.

[24] Mr Mitchell referred to some of the authorities on which Mr Hanretty had relied in support of his contention that prescription did not start to run until the defects with the property were noticed. In particular, with reference to Pirelli v Oscar Faber and Partners 1983 AC 1, it was accepted that in a case involving physical damage to a property, iniuria and damnum occur when the defects come into existence. However, neither that authority nor Renfrew Golf Club v Ravenstone Securities Ltd 1984 SC 22 had anything to do with the cause of action in the present case. There may well be circumstances in which an architect might be responsible for the defects to a building and if so an argument might arise that iniuria and damnum do not coincide until the defects are noticed. In this case, the architect is not charged with inadequate supervision leading to defects in the building. The case against him is that he issued a certificate in an erroneous terms.

[25] So far as the title and interest to sue point relating to the first pursuer was concerned Mr Mitchell argued that if the right to litigate arose from ownership then the first pursuer had title because he had a one half pro indiviso share of the ownership of the property in 1983. However, Mr Mitchell went on to contend that the action was a personal claim for economic loss and the title was largely irrelevant. The claim against the defenders is that as a result of their negligence the pursuers lost their right to sue the architects. The pursuers' loss in that context was jointly and severally suffered. They both lost the difference in value between what they paid for the property and its actual value in 1983 together with the trouble and inconvenience to which they had been put and associated costs. While it was accepted that if it was ownership that gave the pursuers the right of action it might have been better to divide the conclusions but a failure to do so was hardly fatal to the pursuers' case in light of the test set down in Jamison v Jamison 1952 SC and Miller v SSEB 1958 SC.

[26] In summary Mr Mitchell accepted that if I was against him in relation to the prescription argument then the action would fall to be dismissed. However, if his arguments relating to prescription found favour, then there was nothing in so lacking in the pleadings to refuse to send the case to proof before answer. In the circumstances he invited me to repel the first two pleas-in-law for the defenders and send the case to proof before answer.

Response on behalf of the defenders

[27] Mr Hanretty responded briefly to the detailed arguments made by Mr Mitchell on the prescription points. He contended that the fallacy of the pursuers' argument could be tested by looking to see what would have happened had they sold the property purchased in 1983 shortly afterwards for the same price as they had bought it. While Mr Mitchell had argued that on the day the pursuers bought the property they had a loss that travelled with them, it was easy to envisage circumstances in which no loss was suffered at all. Had the defects never been noticed or had the property been sold without them being noticed, no loss would have occurred.

[28] To some extent Mr Hanretty accepted that the principle relating to the concurrence of iniuria and damnum was not in dispute between the parties. It was the application of that principle to the facts of the present case that was at issue. He contended that if the problems with the property had been manifest prior to the pursuers' purchase then no question of the long negative prescription would have arisen. In closing his response, Mr Hanretty conceded, very fairly, that although he had taken a number of pleading points during the course of the discussion, it was accepted that many of those had been answered and that the arguments relating to prescription and title to sue were primarily those for determination.

Discussion

[29] The main issue for determination in this case is whether the pursuers are correct in claiming that any action they had against the architect Mr Clunie prescribed on or about 13 October 2003. If the right to raise proceedings against Mr Clunie was extinguished at that time, then the pursuers have a basis for suing their former solicitors for failing to raise the action prior to that date.

[30] Section 7 of the Prescription and Limitation (Scotland) Act 1973 provides as follows:

"7(1) If, after the date when any obligation to which this section applies has become enforceable, the obligation has subsisted for a continuous period of 20 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....

(2) This section applies to an obligation of any kind (including an obligation to which section 6 of this Act applies) not being an obligation to which section 22A of this Act applies or an obligation specified in Schedule 3 to this Act as an imprescribable obligation or an obligation to make reparation in respect of personal injuries within the meaning of Part II of this Act or in respect of the death of any person as a result of such injuries"

It is not in dispute that any obligation on the part of Mr Clunie would fall within section 7. Where the parties differed was in relation to the date upon which any such obligation became enforceable for the purpose of the statutory provision.

[31] In my opinion, the pursuers have a relevant case on record against their former solicitors for failing to raise an action timeously against the architect who had issued a certificate in October 1983 upon which they say they had relied in purchasing their home. I am in complete agreement with the argument formulated by Mr Mitchell, namely that once the nature of the case for negligence against the architect is understood, it becomes clear that iniuria and damnum coincided at the time of the property purchase. There is ample authority to support this conclusion. In my view, the starting point is the decision of the House of Lords in Dunlop v McGowans 1980 SC(HL) 73. That case involved an allegation that a firm of solicitors had failed to serve a notice to quit on a tenant timeously, resulting in their client being unable to obtain vacant possession of a property for a further year. The action against the agents was raised more than five years after the failure to serve the notice but less than five years from the date upon which a vacant possession was ultimately obtained. The pursuers' argument that the prescriptive period started only to run when financial loss actually occurred involved splitting up various losses arising in different periods from the original negligent act. In rejecting the pursuers' argument Lord Keith of Kinkel opined (at page 81) as follows:

"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 iniuria concurs with damnum. ... In the present case the loss injury and damage flowing from the respondent's 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."

[32] In this case, the alleged breach by the defenders of their duty of care to their clients, the pursuers, is that they failed to raise an action against the architect Mr Clunie within twenty years of his allegedly negligent act, before the end of the long negative prescriptive period. To succeed against the defenders, the pursuers have to show that a case could have been raised against the architect from October 1983 onwards. It seems to me that they are able to do so because they plead that their loss arose at the time they paid a sum of money for a house that they would have not paid but for their reliance on the architect's certificate. They would not have been suing Mr Clunie for any defects to the property, latent or patent, thus the issue of the timing of manifestation of those defects is inconsequential.

[33] This approach is consistent with that taken by Lord Cameron of Lochbroom in the case of Beard v Beveridge Herd and Sandilands 1990 SLT 609. The professional negligence alleged in that case was a failure to frame a lease with a properly drawn and binding rent review clause. In finding that there had been a coincidence of damnum and iniuria at the date of execution of the lease, Lord Cameron of Lochbroom opined (at p 611) as follows:

"I agree with counsel for the defenders that if the pursuers had discovered the defect in the lease immediately after its execution, they could then have raised an action of reparation on the same ground of negligence as is pleaded in this action and have sought damages, albeit the damages might require to have been calculated on the basis of estimation and without the accuracy that has become possible in the present pleadings in the light of supervening events. Thus, for instance they might have been calculated by reference to the difference in value which the lease as drafted and executed would have had upon assignation of the landlords interest for money's worth as compared with a lease with an operable rent review clause of the nature instructed by the pursuers. Accordingly in my opinion, the execution of the lease was the occurrence which gave rise to the loss injury and damage flowing from the negligent act of the drafter and is thus the equivalent of the failure to obtain vacant possession at Whitsunday 1971 in Dunlop v McGowans."

Similarly, in this case, I can see that questions arise about the quantification of damages given that the pursuers did not become aware until long after their purchase that the architect's certificate in question may have been wrongly given as there were defects to the property at the time of its issue. Had they known that in 1983, their position is that they would not have purchased the house. However, as the information was not available to them until sixteen years after the purchase, consideration would also have to be given to remedying the defects. None of that in my view alters the fact that their right of action against Mr Clunie arose at the time of the allegedly negligent act just as the right of action against the firm of solicitors in Beard v Berveridge Herd and Sandilands arose on the execution of the lease with the inoperable rent review clause. The defenders in this case are, rather like the pursuers in The Legal Services Ltd v Miller Samuel LLP & Others, confusing the occurrence of a loss with its quantification. In 1983 the pursuers purchased a property that did not carry with it the value they understood it to have, namely £45,000. Accordingly, their loss was immediate albeit they could not and would not quantify it until many years later.

[34] Further it seems to me that, so far as the pursuers claim against Mr Clunie is concerned, their situation was akin to that being discussed by the Court of Appeal in the case of Byrne and Another v Payne & Foster 1999 1WLR 1849. Where the loss claimed is the financial loss of purchasing a property for more than it was worth due to negligent advice, that loss clearly arises at the time of purchase. There is no inconsistency between that and a decision that loss relating to negligent advice on the design of a chimney arose when cracks in the chimney developed - Pirelli General Cable Works Limited v Oscar Faber and Partners (a firm) 1983 2AC 1. The principle enunciated in Pirelli, referred to by the Court of Appeal in Byrne and Another v Payne and Foster is that the date on which there is a right of action is the date when the damage occurred as opposed to the date on which it was discovered. Using the terminology of Scots law the date on which damage occurs is when iniuria and damnum coincide. Of course the measure of loss may be affected by subsequent events. Had the pursuers managed to sell the property for nearly as much as they had paid for it, the consequences of the alleged negligence would have been minimised and the value of the claim lower. In my view that has no bearing on the central question of when their loss arose. Accordingly, I conclude that so far as the arguments on prescription are concerned, the pursuers' arguments are to be preferred and the case is, on that basis at least, relevantly pled.

[35] Turning to the issue of title and interest to sue, I accept Mr Mitchell's argument that the first pursuer's right of action against Mr Clunie arose in 1983 and that his title to sue is a personal one based on the alleged wrongdoing of the architect and the defenders' subsequent failure to raise proceedings. The pursuers aver (Article 8 of condescendence at page 22) that the defenders sought instructions from and tendered advice to both pursuers after it became apparent that the first pursuer had transferred his interest in the property to the second pursuer. This action arises out of the alleged failure of the defenders to raise an action against Mr Clunie on behalf of both pursuers. Intimation of such a claim had been made to Mr Clunie by the defenders during 2002. While there may be a dispute about whether or not the defenders continued to be instructed to pursue the claim against Mr Clunie on behalf of both pursuers or the second pursuer alone after November 2002 it seems to me that the assertion of the pursuers that they continued to act for both is sufficient at this stage in the proceedings. Of course issues about the measure of the first pursuer's loss may arise, in circumstances where he had relinquished title by 1991. Questions will no doubt be asked about the price, if any, achieved by him for the transfer as this would have a bearing on mitigation of the loss incurred by him in 1983. However, as the transfer of his interest was to his wife, the second pursuer, those issues can be easily resolved. Mr Mitchell accepted that it might have been better, given the change in ownership, had there been separate conclusions dealing with the potential differences in the claims of the pursuers as individuals. However, I agree that this is an insufficient basis to dismiss the first pursuer's claim against the defenders. As Mr Mitchell contended, there is a clear relationship between the prescription argument and the title and interest point. I have accepted that both pursuers' rights against Mr Clunie arose on the concurrence of iniuria and damnum in 1983. What happened thereafter relates to measure of damages rather than the right to them. Accordingly, the defenders' argument against the first pursuer having title and interest to sue also fails.

[36] I should also comment upon some of the pleading points that were taken by Mr Hanretty, albeit that these were ultimately regarded as subsidiary considerations. It is clear that, in addition to showing that they lost a right of action against Mr Clunie through the defenders failure to raise proceedings timeously, it is also incumbent upon the pursuers to aver that they had a relevant case against the architect. It seems to me that they have done so. The timing of and circumstances in which a certificate was obtained from Mr Clunie in my view creates a sufficient nexus for the pursuers to be able to claim that there was a breach of duty giving rise to a loss. I reject the contention that the known facts suggest that they purchased the property on the basis of the surveyor's valuation alone and not in reliance on the architect's certificate. A surveyor's valuation was obtained on 26 August 1983 which qualified the valuation to the extent that it would only hold good if a suitable architect's certificate was available. Within days that architect's certificate was obtained and, on the pursuers' averments, made available to them. That they relied upon it for the purchase does not seem to me to be a bald assertion when taken with the other averments as to timing and circumstances. The terms of the certificate, number 6/1 of process, do not suggest that it was being provided solely for Mr Brown for whom the house had been constructed. The reference to Mr Brown is part of a narrative which explains the architect's earlier role in the construction. I consider that the pursuers have made sufficient averments to place Mr Clunie in the category of someone who owed a duty of care to them through applying his particular skill for their assistance. Further, there are ample averments relating to what Mr Clunie ought to have done had he been exercising ordinary skill and care.

[37] So far as the criticisms about the averments of loss are concerned, these are clear to the extent that the primary basis of loss is the difference between the market value of the house in its defective state and the actual price paid for it. This reflects the fact that the pursuers did not lose the whole of the purchase price as they took ownership of an asset for that price, albeit with one said to have a much lower market value than they thought they were purchasing. The case based on remedying the defects takes account of the fact that the pursuers did go ahead with the purchase and were then left with a choice, on discovery of the problem of either crystallising their loss by selling, or remedying the defects.

Decision

[38] In all the circumstances, I consider that, for the reasons explained, the pursuers have made out a case against the defenders that it is both relevant and sufficiently specific. Accordingly, I shall repel the first and second pleas in law for the defenders and order a proof before answer, reserving meantime all questions of expenses.