BRITISH OVERSEAS BANK NOMINEES LIMITED AND ANOTHER AGAINST STEWART MILNE GROUP LIMITED [2018] ScotCS CSOH_125 (21 December 2018)

BRITISH OVERSEAS BANK NOMINEES LIMITED AND ANOTHER AGAINST STEWART MILNE GROUP LIMITED [2018] ScotCS CSOH_125 (21 December 2018)

The collateral warranty granted new rights to the pursuers, and a new prescriptive period ran from its grant. Clauses 2.3 and 3.1 do not import prescription as a contractual bar; they limit the substantive scope of duties but do not restrict the duration of obligations beyond statutory prescription or express contractual limitation. The defender cannot rely on prescription as a contractual bar against the pursuers' claim under the collateral warranty.

Citation
[2018] ScotCS CSOH_125
Parties
Pursuer: British Overseas Bank Nominees Limited; Pursuer: WGTC Nominees Limited; Defender: Stewart Milne Group Limited
Jurisdiction
Scotland
Judgment Date
21 December 2018
Procedural Posture
Commercial Action / Debate on Relevancy and Contractual Interpretation
Outcome
Defender's construction rejected; pursuers' averments relevant; defender's third plea-in-law repelled.
Legal Topics
Collateral Warranties, Prescription, Contractual Interpretation, Limitation of Liability
Contract Law Construction Law Collateral Warranties Prescription Contractual Interpretation Limitation of Liability

Case Brief

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Parties

British Overseas Bank Nominees Limited

Pursuer

WGTC Nominees Limited

Pursuer

Stewart Milne Group Limited

Defender

Procedural Posture

Commercial Action / Debate on Relevancy and Contractual Interpretation

Legal Issues

  1. 1 Whether the defender can rely on prescription as a contractual bar under the collateral warranty
  2. 2 Proper construction of clauses 2.3 and 3.1 of the collateral warranty
  3. 3 Whether pursuers' rights under the collateral warranty are subject to the same temporal limitations as Northburn's rights under the building contract

Ratio Decidendi

The collateral warranty granted new rights to the pursuers, and a new prescriptive period ran from its grant. Clauses 2.3 and 3.1 do not import prescription as a contractual bar; they limit the substantive scope of duties but do not restrict the duration of obligations beyond statutory prescription or express contractual limitation. The defender cannot rely on prescription as a contractual bar against the pursuers' claim under the collateral warranty.

Court Disposition

Defender's construction rejected; pursuers' averments relevant; defender's third plea-in-law repelled.

Orders

  • Defender's third plea-in-law repelled
  • Defender's averments regarding clauses 2.3 and 3.1 excluded from probation