Summary of Opinion — Judge Sandison

Factual and Procedural Background

This opinion, delivered by Judge Sandison on 6 February 2026, concerns two commercial test actions transferred from sheriff courts (Dundee and Stirling) arising from a common standard-form dental bursary contract. Company A provided an undergraduate dental bursary of £4,000 per academic year conditional on a post‑graduation commitment to carry out a specified period of dental work under The Health Service in The State, with an 80% "NHS earnings" threshold. The particular bursary scheme closed to new entrants in 2018 and affects about 1,300 former recipients. Two representative defendants (Defendant A and Defendant B) were sued for repayment where Company A contends they failed to meet the contractual NHS‑earnings requirement. The actions were heard as test cases to resolve issues of contractual construction and prescription; parties made submissions and lodged affidavit evidence from Agency B and others concerning administration and monitoring of the scheme. The judge reserved final disposal and ordered further submissions after reaching conclusions on construction and prescription.

Legal Issues Presented

1. What is the proper construction of the term "NHS earnings" in the bursary contract?
2. Is the 80% "NHS earnings" requirement assessed year‑by‑year or in aggregate over the commitment period?
3. Must the required commitment be performed as a continuous 5‑year period (subject to justified interruptions) beginning within one year of graduation?
4. Should earnings be measured on a gross (turnover) basis or net (after deductions) basis?
5. If the commitment is not met, is repayment of the bursary required in whole or only proportionally for the years not complied with?
6. When does the prescriptive period for Company A's repayment claim begin, and do the exceptions in section 6(4) of the Prescription and Limitation (Scotland) Act 1973 (fraud/error) postpone prescription?

Arguments of the Parties

Company A's Arguments

• The application form and contract must be read together; the application form shows the 80% requirement was intended to apply in each relevant year.
• "NHS earnings" means earnings generated by provision of services that are set out in the Remuneration Statement and remunerated at those rates (i.e. NHS‑funded services), not merely the status of the patient.
• The commitment is a continuous period starting within one year of graduation; justified absences permit adjustment but do not negate continuity.
• Earnings should be measured on a gross (turnover) basis for simplicity and practicality; maternity pay and similar payments do not qualify as "NHS earnings" under Company A's primary construction.
• Repayment for failure is proportional to the number of years in which the threshold was not met (e.g. 20% per year of a 5‑year commitment).
• Prescription does not bar the claims because either (a) the obligation only became enforceable when accountant‑certified information was provided following a request under the contract, or (b) if the obligation arose earlier, section 6(4) postpones prescription because the dentists deliberately concealed non‑compliance (fraud) and Company A acted with reasonable diligence.

Defendants' Arguments

• "NHS earnings" should be read as earnings from treating patients who are registered for The Health Service, regardless of whether the patient paid privately for particular treatments.
• The 80% requirement should be assessed in aggregate over the whole commitment period rather than year‑by‑year.
• The contract lacks machinery to measure "NHS earnings" reasonably; construction should import sensible limitations to avoid absurdity (e.g. exclude non‑dental income and treat maternity pay appropriately).
• The Ministers/Company A failed in reasonable diligence by not requesting earnings information earlier; section 6(4) cannot be invoked because there was no deceit or inducement to refrain from suing and the dentists had no contractual duty to volunteer certified breakdowns absent a request.
• Measurement should proceed by reference to dentists' actual net receipts (not gross turnover) so as to reflect the dentist's real earnings.

Table of Precedents Cited

Court's Reasoning and Analysis

The court conducted a concentrated textual and contextual exercise of contractual construction, giving primary weight to the contract text while admitting contemporaneous background materials (notably the application form and the Agency A website text) where relevant. Key analytical steps and findings were:

• The term "earnings" denotes monetary reward from the dentist's own professional work; monies attributable to ancillary staff or hygienists are not the dentist's "earnings" for the calculation.
• "NHS earnings" cannot be limited to payments actually made by The Health Service because that would make compliance impracticable; nor can it mean all earnings from treating Health Service registered patients regardless of whether the specific treatment is NHS‑funded. The proper construction is that "NHS earnings" are earnings generated by treatment provided in accordance with the Remuneration Statement (i.e. services remunerated under The Health Service arrangements).
• The application form, signed immediately before the contract, expressed an undertaking that the 80% threshold was to be met "for each of the years" of the commitment; on that background the court concluded the parties intended year‑by‑year assessment rather than aggregate assessment.
• The commitment period is to be continuous, commencing within one year of graduation, but justified absences (maternity, certified sickness, etc.) are to be excluded from the computation; payments in respect of such absences (maternity/sick pay) are also to be disregarded for threshold calculations.
• Given difficulties, uncertainties and potential for unproductive dispute if net earnings were used, the court concluded gross (turnover) measures are to be used for both NHS and private sides of the calculation.
• The SAAS website contemporaneous statement that repayment would be proportional to the extent of the tie‑in period not complied with clarifies that partial failures attract proportional repayment (e.g. 20% per year of a 5‑year commitment; 25% per year of a 4‑year commitment).
• The court did not need to apply contra proferentem to reach these constructions, though it acknowledged the principle remains available and may inform cases where drafting ambiguity affects valuable rights.
• On prescription, the court held that an obligation to repay in respect of a particular commitment year becomes enforceable once that year has concluded if the 80% target for that year was not met; the obligation is prestable at that point and the prescriptive period runs from when it becomes legally possible to sue. The court rejected the argument that certified accountant evidence was a condition precedent to accrual, distinguishing McPhail.
• The court rejected Company A's reliance on section 6(4) (fraud) to postpone prescription: mere failure to volunteer earnings information absent a duty to speak (save when asked) did not constitute the sort of deliberate concealment required; the court would have required proof of actual knowledge or deliberate conduct to find fraud. Applying these conclusions to the facts, the claim against Defendant A was not time‑barred; the claim against Defendant B was partly time‑barred in respect of two earlier years but survived in respect of a later year (2017/18).

Holding and Implications

CORE RULING: The court construed the bursary contract to mean that (a) "NHS earnings" are earnings generated by provision of services remunerated under the Remuneration Statement (i.e. Health Service remunerated services); (b) the 80% threshold is assessed year‑by‑year during a continuous commitment period commencing within one year of graduation subject to justified absences; (c) earnings are to be measured on a gross basis; and (d) repayment for partial non‑compliance is proportional to the number of years not meeting the threshold.

Direct consequences for the parties on the facts before the court:

• Company A's interpretative construction on the central issues was accepted in large part.
• The prescriptive analysis means Company A's claim against Defendant A remains timely; Company A's claim against Defendant B is time‑barred in respect of some earlier years but survives for at least one of the claimed years (the final year identified).
• The court did not enter final decree immediately; parties were given leave to make final submissions and the cases were put out by order for final disposal.

Broader implication: the decision resolves important interpretative uncertainties for the larger cohort of similar disputes by (i) defining "NHS earnings" as earnings from services remunerated under the Remuneration Statement, (ii) confirming annual assessment and gross‑turnover measurement, and (iii) clarifying the operation of prescription and the limited scope for relying on section 6(4) postponement where no deliberate concealment is proven.