Ogilvie Construction LTD against M1 Re Glasgow LTD and Ogilvie Construction Ltd against Leach Rhodes Walker Ltd (Court of Session)

Factual and Procedural Background

This opinion, delivered by Judge Lake, concerns two related actions arising from the construction of a 15‑storey hotel in The City. Plaintiff (Company A) was the design‑and‑build contractor. Two separate defendants were involved: Company C (the architect engaged by Company A) and Company B (the owner/operator). Plaintiff raised (i) an action against Company C (the "Company C action") seeking damages for costs of remedial works arising from an original cladding insulation design of 70mm and a later remedial design of 70+30mm, and alleged defects in cavity barrier design; and (ii) an action against Company B (the "Company B action") seeking declarators that obligations to make reparation to Company B in respect of the 70mm design, the 70+30mm remedial design and the cavity barrier design have prescribed.

A preliminary proof before answer was heard on prescription issues under the Prescription and Limitation (Scotland) Act 1973 as amended by the Prescription (Scotland) Act 2018. The proof proceeded on the assumption that averments of breach were to be treated as true. Parties led factual and expert evidence; there were contested objections as to the proper scope of expert evidence. Key factual events include commencement of works for the 70mm design in April 2017, issuance and implementation of the 70+30mm remedial design in or about October 2017, and earlier works on cavity barriers (prior to February 2017). Independent fire engineering reports were produced for the owner, including two early reports and a later draft (the second and third reports), and other consultant advice was obtained.

Legal Issues Presented

1. Has any obligation enforceable by Plaintiff against Defendant Company C in respect of the 70+30mm remedial design been extinguished by prescription?
2. Has any obligation enforceable by Plaintiff against Defendant Company C in respect of the cavity barrier design been extinguished by prescription?
3. Has any obligation enforceable by Defendant Company B against Plaintiff in respect of the 70mm design been extinguished by prescription?
4. Has any obligation enforceable by Defendant Company B against Plaintiff in respect of the 70+30mm remedial design been extinguished by prescription?
5. Has any obligation enforceable by Defendant Company B against Plaintiff in respect of the cavity barrier design been extinguished by prescription?

Arguments of the Parties

Plaintiff (Company A)

• Contended that the prescriptive period for certain claims was postponed because they did not have the necessary awareness under section 11(3) of the amended Act until later events (e.g. receipt of a solicitor's letter in May 2023 or later consultant reports).
• Argued that remedial works carried out did not amount to an acknowledgement of the secondary obligation to make reparation (section 10(1)).
• Contended that parts of the prescriptive period should be left out of account under section 6(4) in light of alleged error induced by others.

Defendant (Company C)

• Maintained that obligations relied upon by Plaintiff in respect of the matters added by amendment had prescribed.
• Argued that Plaintiff (Company A) was or could with reasonable diligence have been aware of the factual elements required by section 11(3A) at an earlier date.
• Submitted that non‑disclosure to Plaintiff of a report did not amount to inducing error under section 6(4).

Defendant (Company B)

• Argued that no relevant acknowledgement by Plaintiff arose from remedial works because such works implemented contractual obligations to deliver a compliant building rather than an obligation to make reparation.
• Contended that the amended section 11(3) required awareness that the loss was caused by the acts or omissions of an identified person and that they did not have such awareness until much later.
• Argued that a letter from Plaintiff dated 23 February 2018 should have induced error and so part of the period should be left out of account under section 6(4).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
McClure Naismith LLP v Harley Haddow Partnership & Others 2018 SCLR 257	Single prescriptive period applies to an obligation to make reparation for a breach; consider each distinct obligation separately.	Cited to support approach of analysing prescription by reference to particular obligations sued on.
Dunlop v McGowans 1980 SC (HL) 73	Traditional statement of commencement of prescription in terms of damnum and injuria.	Referenced as background to framing the commencement test.
David T Morrison v ICL Plastics [2014] UKSC 48 2014 SC (UKSC) 222	Consideration of "loss, injury or damage" for purposes of prescription.	Used in discussing meaning of loss under s.11(1).
Gordon's Trustee v Campbell Riddell Breeze Paterson LLP [2017] UKSC 75 2017 SLT 1287	Authority on the meaning of "loss, injury or damage" and on what awareness is required under s.11(3).	Applied to determine that objective occurrence of loss suffices to start the clock and to analyse awareness required by s.11(3A).
Midlothian Council v Raeburn Drilling and Geotechnical Ltd 2019 CSOH 29 2019 SLT 1327	Examples where prescriptive period started before awareness of the issue.	Relied on as part of pattern of authorities showing early commencement in economic loss cases.
WPH Developments v Young and Gault [2021] CSIH 39 2022 SC 28	Confirmation of the approach in Gordon's Trustees on commencement and awareness.	Applied in considering awareness and commencement under s.11.
Tilbury Douglas Construction Limited v Ove Arup [2024] CSIH 15 2024 SC 383	Section 6(4) does not apply where a creditor's decision to rely on assurances was driven by its own commercial interest; conduct of contract alone insufficient to induce error.	Followed in rejecting that assurances induced error so as to exclude part of the prescriptive period.
Huntaven Properties Ltd v Hunter Construction (Aberdeen) Ltd [2017] CSOH 57	Authority on treating temporary disconformity and timing of loss for building works.	Referenced in relation to possible alternative approaches to timing of loss; no submission made to treat the 70mm installation as temporary.
Agro Invest Overseas Limited v Stewart Milne Group Limited [2018] CSOH 120	Timing of loss in construction/economic loss contexts.	Referenced as related authority on commencement timing.
Gibson v Carson 1980 SC 356	Section 10(1): acknowledgement must be referable to the particular obligation.	Applied to hold remedial works did not amount to acknowledgement of the secondary obligation to make reparation.
Johnston, Prescription and Limitation (text)	Textual analysis: repairs constitute acknowledgement only if referable to the particular obligation.	Used to support interpretation of s.10(1).
Legal and General Assurance (Pensions Management) Limited v Halliday Fraser Munro [2025] CSIH 24 2025 SLT 1151	Section 6(4) does not apply where the alleged inducing representation is circular (i.e. the breached provision itself) or where assertions of performance are insufficient.	Relied on to conclude that a bare assertion of compliance did not induce error under s.6(4).
Caledonian Railway Co v Chisholm 1886 13R 773	Policy considerations underlying estoppel/error doctrines.	Referenced for policy background in relation to s.6(4).
BP Exploration Co Ltd v Chevron [2001] UKHL 50 2002 SC (HL) 19	Policy on when it would be unjust for a debtor to rely on time‑bar where error induced.	Referenced in discussion of policy underpinning s.6(4).
Kennedy v Royal Bank of Scotland plc [2018] CSIH 70 2019 SC 168	Authority considered in WPH Developments regarding scope of Gordon's Trustees reasoning.	Noted as binding on approach to awareness under s.11.

Court's Reasoning and Analysis

The court analysed prescription stepwise under the amended 1973 Act.

Commencement (s.6(1) and s.11): Section 11(1) treats an obligation to pay damages as becoming enforceable when the loss, injury or damage occurs. The court applied authority (notably Gordon's Trustee and subsequent decisions) to treat "loss, injury or damage" as an objective fact. For these facts the court found that loss occurred when Plaintiff (Company A) started work to implement each design: the 70mm work began in April 2017, the 70+30mm remedial work began in or about October 2017, and cavity barrier work occurred before February 2017. For Company B the loss occurred when the defective building containing non‑compliant elements was constructed (same dates).

Relevant acknowledgement (s.10(1)): The court held that remedial works carried out under the contract are performance directed to the primary contractual obligation to deliver a compliant building and cannot "only reasonably be explained" by reference to a secondary obligation to make reparation. Applying Gibson and Johnston, such remedial works did not constitute a relevant acknowledgement of an obligation to make reparation.

Postponement/awareness (s.11(3)–(3A)): The court interpreted the three factual awareness requirements in s.11(3A) together with authorities. It held that awareness under (3A)(a) is satisfied by awareness of the objective fact that the works had been carried out (or expenditure incurred). Paragraphs (b) and (c) require awareness that those facts were caused by the acts/omissions of an identifiable person and the identity of that person; this does not require that the creditor know they have suffered a detriment. Applying evidence about reports and consultant advice, the court found that Plaintiff had awareness of the facts specified in s.11(3A) in respect of the relevant claims (with differences as to precise documentary awareness between parties), and that Company B was aware of the necessary facts (including the absence of BR135 evidence) by October 2017.

Section 6(4) (leaving time out of account for error induced): The court applied recent authority holding that mere contractual assertions of performance or unvouched assurances do not ordinarily induce the kind of error contemplated by s.6(4). The court found that a letter from Plaintiff dated 23 February 2018 constituting an assertion of compliance did not induce error in Company B given contemporaneous information Company B had (including the third independent report and consultant advice) and was therefore insufficient to exclude part of the prescriptive period. Similarly, Plaintiff could not show that non‑disclosure by Company C of a report induced error for the purposes of s.6(4).

Overall, the court concluded that the prescriptive period commenced more than five years before proceedings for each obligation and that no relevant acknowledgements were proved and no part of the prescriptive period fell to be excluded.

Holding and Implications

HOLDING: The court held that the five obligations identified in the proof were extinguished by prescription.

Implications: The direct effect is that the obligations relied on by Plaintiff against both Defendant companies in respect of the 70mm design, the 70+30mm remedial design and the cavity barrier design are time‑barred. The court recognised that no part of the prescriptive period is to be excluded under section 6(4) and that no relevant acknowledgement under section 10 was established. The court did not purport to create novel precedent beyond applying existing authorities; it ordered that the matter be set down for submissions on how to give effect to these conclusions.