Scottish Widows Services Ltd v. Building Design Partnership [2011] ScotCS CSIH_35 (20 May 2011)

Scottish Widows Services Ltd v. Building Design Partnership [2011] ScotCS CSIH_35 (20 May 2011)

The pursuers' claim under the collateral warranty is relevant even though they were not contractually obliged under the sub-lease to carry out the remedial works. The collateral warranty expressly contemplates liability for costs incurred by the occupier, and there is no legal obstacle to such an arrangement. The practical necessity for the occupier to remedy defects suffices to establish a relevant claim for economic loss under the warranty.

Citation
[2011] ScotCS CSIH_35
Parties
Pursuers and Respondents: Scottish Widows Services Ltd; First Defenders and Reclaimers: Kershaw Mechanical Services Ltd; Second Defenders and Reclaimers: Building Design Partnership
Jurisdiction
Scotland
Judgment Date
20 May 2011
Procedural Posture
Reclaiming Motion (appeal) / Interlocutory; Appeal Against Refusal to Dismiss Action as Irrelevant, Seeking Proof Before Answer
Outcome
Reclaiming motion refused; proof before answer allowed; case remitted to the Lord Ordinary to proceed as accords.
Legal Topics
Collateral Warranties, Assignment of Contractual Rights, Measure of Loss, Remedial Works Liability, Interpretation of Repairing Obligations
Contract Law Construction Law Collateral Warranties Assignment of Contractual Rights Measure of Loss Remedial Works Liability Interpretation of Repairing Obligations

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Parties

Scottish Widows Services Ltd

Pursuers and Respondents

Kershaw Mechanical Services Ltd

First Defenders and Reclaimers

Building Design Partnership

Second Defenders and Reclaimers

Procedural Posture

Reclaiming Motion (appeal) / Interlocutory; Appeal Against Refusal to Dismiss Action as Irrelevant, Seeking Proof Before Answer

Legal Issues

  1. 1 Whether the pursuers, as assignees of a collateral warranty, have a relevant claim for the costs of remedial works despite not being contractually obliged under the sub-lease to carry out such works
  2. 2 Whether liability under the collateral warranty extends to economic loss suffered by an occupier/sub-tenant who undertakes repairs out of practical necessity

Ratio Decidendi

The pursuers' claim under the collateral warranty is relevant even though they were not contractually obliged under the sub-lease to carry out the remedial works. The collateral warranty expressly contemplates liability for costs incurred by the occupier, and there is no legal obstacle to such an arrangement. The practical necessity for the occupier to remedy defects suffices to establish a relevant claim for economic loss under the warranty.

Court Disposition

Reclaiming motion refused; proof before answer allowed; case remitted to the Lord Ordinary to proceed as accords.

Orders

  • Refusal of the reclaiming motion by the second defenders
  • Remit to the Lord Ordinary for proof before answer