Decision of the Supreme Court in the case of Gordon v Campbell Riddell Breeze Paterson LLP
The Supreme Court has issued its judgement in the appeal from the Inner House in the case of Gordon v Campbell Riddell Breeze Paterson LLP. The case was mentioned by Brian Fairgrieve in his talk at our recent CPD events in Glasgow and Dundee and the outcome is that the appeal by the pursuers has now been dismissed unanimously.
This decision was fairly widely expected having regard to the constitution of the court and its resemblance to that in Morrison v ICL Plastics. Interestingly, however, the only judgement was issued by Lord Hodge, who issued the main dissenting judgement in Morrison.
By way of brief reminder, the action concerned defective notices to quit issued by the defenders in respect of certain fields owned by the pursuers which were subject to the provisions of the Agricultural Holdings (Scotland) Act 1991. The notices to quit were served in November 2004, requiring the tenants to remove in November 2005. When they failed to do so, applications were made to the Scottish Land Court in February 2006 and, by decision dated 24th July 2008, the Scottish Land Court refused to give effect to two of the three notices in question.
The Supreme Court rejected the argument that time did not begin to run until the Land Court decision was issued. Instead, the Court considered that:
“On an objective assessment, the trustees suffered loss on 10th November 2005 when they did not obtain vacant possession of those fields and could not realise their development factor. It does not matter if the loss resulted from the tenant’s intransigence, as the trustees may have believed, or from someone else’s acts or omissions.”
Lord Hodge acknowledges that the approach adopted “is harsh on the creditor of the obligation” but seeks to justify that to some extent by offering the view that it offers certainty. He also questions whether the interpretation now placed on Section 11(3) of the 1973 Act is what the Scottish Law Commission envisaged in its report which led to that Act and he notes, as previously observed, that the Commission has now published a further report with a draft bill which will seek to amend the law in this regard.
If it were ever wise to defer raising proceedings, this latest decision provides anticipated reinforcement for the view that that can no longer be considered to be the case.
For more information about the case please don’t hesitate to contact Brian Fairgrieve and he would be delighted to explain more about the outcome of the decision.