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Greater Glasgow Health Board against Multiplex Construction Europe LTD and others (Court of Session)
Summary of Opinion — First Division, Inner House, Court of Session
Factual and Procedural Background
On 18 December 2009 the Plaintiff contracted with the Defendant for the design and construction of The Hospital in The City. The Plaintiff alleges defects in the design and construction of the atrium cladding and seeks damages of £16,325,000. The Defendant denies breach and counterclaims for sums paid following adjudications. The Defendant raised contribution claims against Third Party A and Third Party B under collateral warranties.
The Defendant pleaded prescription under section 6 of the Prescription and Limitation (Scotland) Act 1973. The Plaintiff relied on section 6(4)(a)(ii) (error induced by words or conduct) and section 11(3) (postponement where creditor unaware). A commercial judge heard preliminary proof on prescription and found that the Plaintiff had not proved induced error and, alternatively, that with reasonable diligence the Plaintiff could have discovered the position by May 2016. The commercial judge accordingly dismissed the claims (assoilzied) against the Defendant, Third Party A and Third Party B. The Plaintiff sought to reclaim (appeal) that interlocutor. Judge Pentland delivered the opinion of the court.
Legal Issues Presented
- Did the commercial judge err in law or fact in holding that the Plaintiff had not proved error induced by the Defendant's words or conduct so as to interrupt prescription under section 6(4)(a)(ii) of the Prescription and Limitation (Scotland) Act 1973?
- If induced error were established, when did the period of induced error begin and end for the purposes of the "reasonable diligence" proviso to section 6(4)?
- Was the commercial judge wrong to hold that section 11(3) did not postpone the commencement of prescription (i.e. was the Plaintiff unaware, and could not with reasonable diligence have been aware, of its loss before 9 February 2021)?
- Should the appellate court disturb the commercial judge's factual findings given the applicable standards of appellate review?
Arguments of the Parties
Plaintiff's Arguments
- The Plaintiff contended it held a positive mistaken belief that the atrium cladding complied with the contract and that the Defendant's words, conduct and omissions (including payment applications, building warrant/completion certificate material, an inaccurate O&M Manual, internal communications and silence after March 2018) either made representations or prolonged the Plaintiff's error so as to invoke section 6(4).
- The Plaintiff argued silence could amount to conduct and relied on authorities (including AMN Group and, to a more limited extent, Stag Line) to submit that prolonged inaction in the face of a reasonable expectation of disclosure or advice can qualify as inducing error.
- On reasonable diligence the Plaintiff submitted the Defendant had the relevant knowledge and that it was not reasonable to assume the Plaintiff could have discovered the true position within the short period the commercial judge imposed; the Plaintiff relied alternatively upon section 11(3) (latent damage/unawareness) to fix the start of prescription at 9 February 2021.
Defendant's and Third Parties' Arguments
- The Defendant and Third Parties argued the commercial judge's factual findings were entitled to deference and that the Plaintiff had failed to lead evidence that any individual was induced into error or that any error was attributable to the corporation's directing mind; accordingly section 6(4) did not apply.
- They submitted silence was irrelevant where the Plaintiff was unaware of the Defendant's investigations and where the Plaintiff had obligations under CEL 11 to verify the O&M Manual; had the Plaintiff exercised reasonable diligence the issue would have been discovered much earlier.
- They argued section 11(3) was inapplicable because, applying Gordon's Trustees and Morrison, the Plaintiff incurred expenditure at practical completion (26 January 2015) and thus became objectively aware of the loss then.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Dryburgh v Scotts Media Tax [2014] CSIH 45; 2014 SC 651 | Establishing corporate state of mind by leading evidence of directing mind or by agency. | Used to explain how a body corporate's state of mind may be established and applied to conclude no evidence of Board-level error was led. |
| Tilbury Douglas Construction v Ove Arup [2024] CSIH 15; 2024 SC 383 | Articulated elements required to succeed under section 6(4) and related observations on burden and conduct. | Cited for the elements that must be proved under section 6(4) and for guidance on reasonable diligence and the need for evidential proof; the court followed its framework. |
| Stag Line Ltd v Tyne Shiprepair Group Ltd (The Zinnia) [1984] 2 Lloyd's Rep 211 | Instances where an implied duty to inform may arise (special circumstances involving danger or unlikelihood of discovery). | Distinguished: court held its facts were not analogous and declined to imply a duty to inform into the contract here. |
| Heather Capital Ltd (In Liquidation) v Levy & McRae [2017] CSIH 19; 2017 SLT 376 | Silence can amount to "conduct" for the purposes of section 6(4). | Accepted that silence can be conduct but applied it to the facts and found that the Defendant's silence could not have induced the Plaintiff's error because the Plaintiff was unaware of the Defendant's investigations. |
| Cramaso LLP v Visc Reidhaven's Trs [2014] UKSC 9; 2014 SC (UKSC) 121 | Representations have continuing effect once made. | Cited to support the proposition that earlier representations may persist but found the particular communications relied on did not induce error as to the atrium cladding. |
| AMN Group Ltd v Gilcomston North Ltd [2008] CSOH 90; 2008 SLT 835 | Prolonged inaction in the face of a legitimate expectation of expert assistance may amount to conduct inducing error. | Considered by Plaintiff by analogy; court held the facts there were materially different and AMN did not support the Plaintiff's case here. |
| Rowan Timber Supplies (Scotland) v Scottish Water Business Stream [2011] CSIH 26 | Invoices or positive acts may amount to representations for section 6(4) purposes. | Distinguished: that case involved positive repeated demands; the court found the payment applications and related routine acts here were not shown to have induced corporate error. |
| Gordon's Trustees v Campbell Riddell Breeze Paterson LLP [2017] UKSC 75; 2017 SLT 1287 | For section 11(3) purposes, prescriptive period starts when creditor is aware (or could with reasonable diligence have been aware) that loss/expenditure has occurred; expenditure can constitute loss. | Relied upon to hold that expenditure at or shortly after practical completion meant the Plaintiff was objectively aware of loss by 26 January 2015 and so section 11(3) did not postpone prescription. |
| David T Morrison v ICL Plastics [2014] UKSC 48; 2014 SC (UKSC) 222 | Latent damage and related principles on when prescriptive period commences. | Applied as part of the authorities establishing that expenditure/purchase triggers the prescriptive period rather than latent-damage-only approach; used in assessing section 11(3). |
| Adams v Thorntons WS 2005 1 SC 30 | Policy rationale for prescription (promoting certainty and avoiding stale claims). | Cited to emphasise why the party claiming relaxation of prescription bears the burden of proof. |
| Dunlop v McGowans 1980 SC (HL) 73 | Concurrence of injuria and damnum as the date when obligation becomes enforceable under section 11(1). | Referenced in defining the date when the obligation became enforceable (practical completion is the relevant date here). |
| BP Exploration Co Ltd v Chevron [2001] UKHL 50; 2002 SC (HL) 19 | Principles on interruption of prescriptive periods by misleading conduct; requirement that creditor be misled. | Cited for the proposition that a creditor must prove it was misled by the debtor's conduct or fraud. |
| Henderson v Foxworth Investments [2014] UKSC 41; 2014 SC (UKSC) 203 | Standards for appellate intervention in factual findings (rarely interfere unless plainly wrong/no basis in evidence). | Applied to justify deference to the commercial judge's findings and to refuse to disturb them on appeal. |
| Thomas v Thomas 1947 SC (HL) 45; Yuill v Yuill [1945] P. 15; In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; 2013 1 WLR 1911 | Authorities on appellate review and deference to trial judges. | Used to frame the standard of review and the threshold for interference with first-instance factual findings. |
| Woodhouse v Lochs and Glens (Transport) Ltd [2020] CSIH 67; 2020 SLT 1203 | Appellate regard for limitations of appeal process when reviewing factual findings. | Cited to support the court's approach to deference to the commercial judge. |
| Glasgow City Council v VFS Financial [2022] CSIH 1; 2022 SC 133 | Constructive knowledge/reasonable diligence in discovery of errors. | Referenced in assessing what reasonable diligence would have achieved and in supporting constructive knowledge conclusions. |
| SSE Generation Ltd v Hochtief Solutions AG [2016] CSOH 177; First Division [2018] CSIH 26; 2018 SLT 579; Salt International v Scottish Ministers [2015] CSIH 85; 2016 SLT 82 | Approaches to onus and evidential issues after hearing evidence. | Discussed in relation to which party bears onus on the reasonable diligence proviso and held onus was immaterial once the evidence was considered. |
| WM Morrison Supermarkets plc v LEM Estates Ltd (In Liquidation) [2020] CSOH 31; 2020 PNLR 16 | Whether adjusted pleadings introduce distinct obligations and the effect on prescription. | Applied to conclude the adjustment introduced no distinct new obligation requiring a separate prescriptive period. |
| Midlothian Council v Raeburn Drilling and Geotechnical Ltd [2019] CSOH 29; 2019 SLT 1327 | Authority on section 11 timing issues. | Referenced among authorities considered in assessing section 11(3) issues. |
| WPH Developments v Young & Gault [2021] CSIH 39; 2022 SC 28 | Authority relating to prescription and discovery. | Cited in the array of authorities guiding application of section 11 and prescription principles. |
| Caledonian Railway Co v Chisholm (1886) 13 R 773 | Historical authority on representations and acquiescence (distinguished). | Distinguished: court noted differences in statutory context and facts; not adopted as supportive precedent here. |
| DPP v Haw [2007] EWHC 1931; [2008] 1 WLR 379; Noon (River Manager) v Matthews [2014] EWHC 4330 | Implied delegation of functions of statutory office-holders and implications for attribution. | Considered in submissions on attribution by delegation; court held no sufficient evidence to rely on implied delegation and declined to admit late argument. |
Court's Reasoning and Analysis
The court approached the reclaiming motion on the basis of the commercial judge's factual findings, explaining that appellate interference with first-instance findings is permissible only in exceptional cases where the trial judge was plainly wrong or made a material legal error. The court identified the statutory tests in sections 6 and 11 of the Prescription and Limitation (Scotland) Act 1973 and summarised the elements the creditor must prove under section 6(4): existence of an error as to rights/remedies, causation by the debtor's words or conduct, that error contributed to refraining from a claim, and the dates when the error began and ended (Tilbury Douglas).
Applying those principles to the commercial judge's findings, the court concluded:
- The commercial judge made detailed credibility findings and found no witness evidence that any individual was induced into error or that the Board's directing mind was shown to have been misled. The Plaintiff accepted those factual findings and did not identify alternative findings to be substituted.
- Routine acts by the Defendant (payment applications, submission of building-warrant documentation, completion certificates) were not shown to have induced corporate error; the O&M Manual was inaccurate but the Plaintiff did not consult it until 2021, so it could not have induced error earlier.
- Silence by the Defendant after March 2018 did not influence the Plaintiff's state of mind because the Plaintiff was unaware the Defendant was investigating the atrium; therefore silence could not have induced error (Stag Line distinguished; Heather Capital acknowledged as principle but inapplicable on facts).
- On reasonable diligence, the court accepted the commercial judge's analysis that CEL 11 imposed on the Plaintiff an obligation to verify the O&M Manual at handover; had the Plaintiff complied, it would have discovered the true position shortly after practical completion and any period of induced error would have ended by May 2016, leaving prescription to extinguish the obligation by May 2021.
- Section 11(3) was unavailable because, following Gordon's Trustees and Morrison, expenditure at or shortly after practical completion (26 January 2015) meant the Plaintiff was objectively aware of loss and could not postpone commencement until 2021.
- The appellate court found no demonstrable legal error in the commercial judge's reasoning and no basis to overturn his factual findings given the applicable standard of review (Henderson and related authorities).
Holding and Implications
DISPOSED OF
The reclaiming motion is refused. The court adhered to the commercial judge's interlocutor of 27 June 2025 which had assoilzied the Defendant, Third Party A and Third Party B (i.e. dismissed the Plaintiff's claims against them on prescription grounds). The court reserved questions of expenses.
Implications: The direct effect is that the Plaintiff's claims as pleaded were held to have prescribed and were dismissed; no broader change to prescription law was established and the court emphasised the application of existing authorities and the strict evidential burden on a creditor seeking to invoke section 6(4) or section 11(3).
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