Peacock Group plc v. Railston Limited and WM Murchland & Company Limited [2010] CSOH 173

The pursuers were a retailing company whose business premises were flooded in 2001 when a mains water connection failed. According to the pursuers, that failure and the resulting loss and damage were caused by breach of contract on the part of the defenders who had carried out shop-fitting works,and who had allegedly failed to carry out their contractual obligations with reasonable care and skill.

The court heard that this action had been raised in early 2009, following its dismissal two years earlier. The earlier case had been dismissed because the physical pipework evidence – the condition of which would be of crucial significance to the determination of the claim - had been borrowed out and apparently lost by the pursuers' agents in November 2003. According to the Lord Ordinary at that time, the prejudice to the third parties was so severe and irremediable, by reason of crucial primary evidence being unavailable for expert inspection on their behalf that the action could not fairly be allowed to proceed against them or against the defenders whose right of relief had been rendered inoperable.

The pursuers acquiesced in this decision, but by chance rediscovery, the missing items were found again in December 2008 and the present fresh action was brought. According to counsel for the defenders and third parties, the element of delay involved since the original cause of action arose was unconscionable and excessive, and was in large measure attributable to fault on the part of the pursuers' agents. It was argued that the condition of the piping would have inevitably changed to some degree during their five-year sojourn in the interior of a filing cabinet, and the result was that new experts were now disabled from examining items in the same condition as had been seen by other experts many years ago. It was submitted that there could never be a level playing field in this litigation and the combination of inexcusable delay and severe prejudice should lead to the immediate dismissal of the proceedings.

Noting that averring inordinate and inexcusable delay was merely the first essential criterion in any motion for dismissal, the Lord Ordinary noted that there must always be “an added ingredient” – an element of unfairness. The Lord Ordinary was not persuaded that the passage of time involved in this case could properly be described as inordinate and inexcusable, and thought there was no reason to regard the third parties as having suffered material prejudice. Accordingly, the Lord Ordinary was not able to hold that a fair trial would not be possible. Proof before answer allowed.