LEGAL AND GENERAL ASSURANCE (PENSIONS MANAGEMENT ) LTD AGAINST HALLIDAY FRASER MUNRO AND OTHERS [2023] ScotCS CSOH_81 (17 November 2023)

LEGAL AND GENERAL ASSURANCE (PENSIONS MANAGEMENT ) LTD AGAINST HALLIDAY FRASER MUNRO AND OTHERS [2023] ScotCS CSOH_81 (17 November 2023)

The court held that the principle of equivalence applies to collateral warranties, entitling defenders to the same prescription defences as against the original employer, so time runs from practical completion. The pursuer's pleadings under section 11(3) were excluded except as against SMG, but its pleadings under section 6(4) were relevant and sufficiently specific to proceed to proof. The absence of a 'no greater duties' clause in the SMG warranty did not alter the application of contractual limitation. The pursuer could claim under warranties granted post-purchase, and the partnership was not released from liability absent consent to novation.

Citation
[2023] ScotCS CSOH_81
Parties
Pursuer: Legal and General Assurance (Pensions Management) Limited; First Defender: Halliday Fraser Munro; Second Defender: Fairhurst (formerly W A Fairhurst & Partners); Third Defender: Stewart Milne Group Limited; Fourth Defender: Halliday Fraser Munro Limited
Jurisdiction
Scotland
Judgment Date
17 November 2023
Procedural Posture
Commercial Construction Dispute (preliminary Pleas) / Interlocutory Judgment on Preliminary Pleas in Law (debate)
Outcome
Interlocutory judgment: certain averments excluded from probation; proof before answer allowed with all pleas standing; further procedure to be discussed by order.
Legal Topics
Collateral Warranties, Prescription (limitation of Actions), Construction Defects, Assignment of Contractual Rights, Novation and Assumption of Liability, Damages for Defective Works
Construction Law Contract Law Professional Negligence Prescription and Limitation Collateral Warranties Prescription (limitation of Actions) Construction Defects Assignment of Contractual Rights +2 more

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Parties

Legal and General Assurance (Pensions Management) Limited

Pursuer

Halliday Fraser Munro

First Defender

Fairhurst (formerly W A Fairhurst & Partners)

Second Defender

Stewart Milne Group Limited

Third Defender

Halliday Fraser Munro Limited

Fourth Defender

Procedural Posture

Commercial Construction Dispute (preliminary Pleas) / Interlocutory Judgment on Preliminary Pleas in Law (debate)

Legal Issues

  1. 1 Whether the pursuer's claims under collateral warranties are time-barred by prescription or contractual limitation.
  2. 2 Whether the principle of equivalence applies to collateral warranties, entitling defenders to the same prescription defences as against the original employer.
  3. 3 Whether the pursuer has pled a relevant case under section 11(3) and section 6(4) of the Prescription and Limitation (Scotland) Act 1973.

Ratio Decidendi

The court held that the principle of equivalence applies to collateral warranties, entitling defenders to the same prescription defences as against the original employer, so time runs from practical completion. The pursuer's pleadings under section 11(3) were excluded except as against SMG, but its pleadings under section 6(4) were relevant and sufficiently specific to proceed to proof. The absence of a 'no greater duties' clause in the SMG warranty did not alter the application of contractual limitation. The pursuer could claim under warranties granted post-purchase, and the partnership was not released from liability absent consent to novation.

Court Disposition

Interlocutory judgment: certain averments excluded from probation; proof before answer allowed with all pleas standing; further procedure to be discussed by order.

Orders

  • Sustain SMG's first plea-in-law; exclude from probation pursuer's averments regarding statutory prescription against SMG.
  • Sustain HFM's and Fairhurst's first pleas-in-law; exclude from probation pursuer's averments regarding section 11(3) of the 1973 Act against them.