Factor's registered notice did not prevent time bar: Inner House
A registered notice of potential liability for costs, for a flatowner's share of property maintenance costs and fees due to the factors of the whole building, does not constitute a "diligence" interrupting the running of time against the factors being able to bring a claim for payment, appeal judges have ruled.
Lord Brodie, Lord Malcolm and Temporary Judge Mhairi Stephen QC also held that the claim lapses after five years, rather than the 20 year period argued for by the factors.
The case was brought by Cumbernauld Housing Partnership Ltd against Janice Davies, who owned an 11th floor flat in a block at Seafar, Cumbernauld. The pursuers claimed payment of £9,574.50 for factoring services dating back to around 2000 and following years. They had served notices of potential liability under s 12 of the Tenements (Scotland) Act 2004 in 2008 and 2011.
The sheriff held that the pursuers had faiiled to establish their appointment as factors and dismissed the action; the sheriff principal held that this was sufficiently established by regular dealings over a period of years, and that correspondence between the parties in 2010 constituted an agreement by the defender to pay the sums claimed.
On the defender's appeal, the pursuers argued that the debts claimed were in respect of "obligations relating to land", which prescribed after 20 years rather than five. However Lord Brodie, delivering the opinion of the court, said it would be an "extravagant" result if what were essentially tradesmen's bills did not prescribe for 20 years. An obligation to pay money by way of costs to which s 12 applied was expressly included within the legislation relating to the five year prescription, and it would produce odd results if the various sums claimed did not fall within that provision. The defender's liability was a liability by virtue of a management scheme in terms of s 11(9) of the 2004 Act and therefore a relevant cost in terms of s 12.
Regarding the notices registered, the term "diligence" was not very clearly defined in law, but the notice did not have the effect of improving the factor's position in relation to the existing debtor or their property, but created a potential liability of a subsequent owner. It therefore did not constitute the "execution... of any form of diligence" and did not interrupt the operation of the time bar.
However certain payments by the defender from late 2010 were enough to interrupt the running of prescription in relation to obligations that had not already prescribed, and taking account of these along with the raising of the present action, the court reduced the sum due to £3,620.88.