Link Housing Association Ltd v. PBL Construction Limited & Ors [2007] ScotCS CSOH

OUTER HOUSE, COURT OF SESSION

[2007] CSOH 206

A1744/02

OPINION OF LORD McEWAN

in the cause

LINK HOUSING ASSOCIATION LIMITED

Pursuer;

against

(FIRST) PBL CONSTRUCTION LIMITED; (SECOND) THE GRAY AITKEN PARTNERSHIP LIMITED; (THIRD) GEMMELL HAMMOND AND PARTNERS; (FOURTH) J R QUEENAN PARTNERSHIP LIMITED; (FIFTH) HUGH BROWN

Defenders:

________________

Parties participating at this hearing:

Pursuer: Johnston, QC; Burness

Second Defenders: Lake; Simpson & Marwick

Fourth Defenders: McNeil QC, Walker; Brodies

Non participating parties:

Fifth Defenders: Agents: Drummond Miller

First Defenders: Agents: MacRoberts

21 December 2007

[1] In 1996 a developer called GAP Housing Association Ltd decided to have built a development of flats in Ferguslie Park area of Paisley. They engaged the first defenders BPL Construction Ltd to build them. (This Company is now in liquidation.) Gray Aitken, the second defenders, were appointed architects; Gemmell Hammond, the third defenders, engineers. The Queenan Partnership, the fourth defenders, were the employers' agents and HBM Site Services, the fifth defenders, were Clerk of Works. The second and third defenders gave collateral warranties to GAP.

[2 ] The flats were built and let in 1997 and soon a growing list of faults and problems emerged. There were defects in windows, cladding, plumbing, electricity and other things. The problems were so great that the flats had to be demolished. It was inevitable that legal proceedings would be raised. However, before turning to that, other events should be noticed. In November 2000 Link Housing Association Ltd (I will refer to this Company as LHA number one) took over all rights held by GAP in the contracts with the various defenders. LHA number one was formed in 1962 and had the unique number 1481(R)S. On 8 May 2001 LHA number one changed its name to Link Group Ltd retaining the same unique number. Then on 29 November 2001 a new company was incorporated called Link Housing Association Ltd (I call this LHA number two) with the unique number SC 225807. This company with the same name as the former one was apparently set up to manage the flats and keep "name continuity" for the tenants.

[3 ] At this point matters began to go wrong. The inevitable legal proceedings were wrongly raised in the name of LHA number two. Link Group were, of course, also in existence at the same time. In March 2005 the pursuers lodged a Minute of Amendment seeking inter alia to substitute for the pursuers, the Link Group Ltd. The amendment was received and answered by various interested defenders. The Lord Ordinary then allowed the Record to be amended in terms. It is not necessary for me now to comment on his opinion. There was a reclaiming motion and the amendment was refused for two reasons. The first was that the error was one of substance going as to the identity of the person suing and a different person could not be substituted. The second reason for refusal related to expiry of time limits.

[4 ] It could have been thought (Opinion para. 15) that some encouragement was given to lodge another Minute of Amendment. That is what has happened, and again the pursuers seek to substitute Link Group Ltd as pursuers. The second and fourth defenders oppose even the receipt of the Minute. They say the matter is already decided and I am bound by the decision of the First Division on this same point. The third defenders are no longer in the action. The fifth defenders were not represented before me.

[5 ] Let me now set out briefly the arguments.

[6 ] Mr Johnston began by simply asking for the amendment to be received and answered. He said the amendment was only refused because of the favourable clause in the second defender's contract. He would neither move or oppose any dismissal against the second defenders. He made a number of points in his reply which I deal with below.

[7 ] Mr Lake for the second defenders said that an amendment of this type (substantially as before) was no longer competent. The issue had been considered and decided. The pursuers in Court did not take over any collateral warranty and, he said, that point had been expressly conceded. Whatever obligation was owed to GAP was not owed to them. The proposed pursuers could never have taken over the contracts and any claim they have should lie against others not convened in this action. His clients were entitled to absolvitor but the Court could not do this ex proprio motu. The pursuer could abandon or renounce probation and consent to absolvitor.

[8 ] For the fourth defenders, Mr McNeill said he was in the same position as Mr Lake. The case was only one of contract, not delict as well and there were issues of insurance. This amendment should not even be received. The new amendment was the same as the old and the matter had been decided. In any case the new amendment was seven years late and tendered without any excuse. Counsel also addressed an argument on prescription and referred me to Britannia Building Society v Clark 2002 SLT 1355.

[9 ] In his reply Mr Johnston denied that his amendment was tardy and he discussed various procedural steps he had been contemplating or was actively taking since the decision of the Inner House. He then said he would renounce probation against the second defenders and not oppose absolvitor and expenses.

[10 ] The new amendment is No. 49 of Process. It is substantially the same as the old one (to be found at page 42 of the Appendix). I am bound by the decision of the Inner House on the point and I will refuse to allow the amendment to be received. I regard what the pursuers are again trying do as not only unarguable but, this time, also unstateable. I rely on and adopt the reasons given by the Lord President. The matter now does not admit of argument.

[11 ] I also think it would be quite wrong to release the second defenders on a renunciation of proof against only them. That would not be fair as against the fourth defenders who claim to have the same unanswerable point against the pursuers. In any case if I release the second defenders in this way the fourth defenders will simply bring them back in and seek relief. That would cause further delay. To some degree I also have to consider that the fifth defenders could be affected by all of this. It is, therefore, not necessary to consider the prescription argument and the Britannia case.

[12 ] I shall refuse to allow the amendment to be received and I shall order a preliminary proof on the existing record limited to the question of whether these pursuers have any rights under any of the GAP contracts.

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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Link Housing Association Ltd v. PBL Construction Limited & Ors [2007] ScotCS CSOH_206 (21 December 2007) URL: http://www.bailii.org/scot/cases/ScotCS/2007/CSOH_206.html Cite as: [2007] CSOH 206, [2007] ScotCS CSOH_206

Scottish Court of Session Decisions