Sheriff assoilzies law firm from counterclaim by client with outstanding fees alleging breach of contract

About this case:

• Citation:
  [2024] SC ABE 19
• Judgment:
  External link
• Court:
  Sheriff Court
• Judge:
  Sheriff Ian Miller

George Souter, the defender in an action raised by AC Morrison & Richards LLP, first presented the counterclaim, worth four times the sum of the principal action, as an adjustment to his defence in July 2022. The pursuers’ position was that, at that time, the legal ground of the counterclaim had prescribed.

The case was heard by Sheriff Ian Miller at Aberdeen Sheriff Court. Manson, advocate, appeared for the pursuers and Watt, advocate, for the defender.

Irrecoverable fees

The principal action was raised by the pursuers for professional fees and outlays due to them while acting as the defender’s solicitors on three occasions in 2012, 2016 and 2017 respectively. The defender in turn averred that Mr John Koss, a solicitor of the predecessor firm of the pursuers, had failed to exercise the knowledge, skill and care of a reasonably competent solicitor.

It was averred by the defender that Mr Koss had failed to act appropriately during a dispute between the defender and a developer that planned to build on land that he believed belonged to him. He had been assured by Mr Koss in 2006 that he did not need to worry about the discrepancy between two competing titles, when in fact he did, and this forced him to raise Lands Tribunal proceedings in 2016 in which he incurred £45,511.36 in unrecoverable expenses.

Counsel for the pursuers submitted that all the obligations founded upon in the counterclaim had been extinguished by the time that it had been presented. The breach on which the defender founded occurred in either 2006 or 2010. As regards breach of contract, he became aware of this in a letter dated 25 November 2015 informing him of a rejection of his application to the Land Register to transfer the title of a section of his land to his company.

For the defender it was submitted that the loss suffered was his inability to pay the irrecoverable fees incurred in respect of the Lands Tribunal proceedings. The key issue was not the existence of the proceedings, which he did not win until December 2019, but his liability for those fees. The legal ground of his claim had not prescribed at the time that the counterclaim was presented.

First actual determination

In his decision, Sheriff Miller said of when damnum occurred: “In my opinion the point in time when damnum occurred was the date when Mr Koss, as the then duly authorised and mandated law agent of the defender, received notification that his client’s application to the Land Register had been rejected because of the boundary issue. The rejection was the first averred consequence of the decision taken at the 2010 meeting about the boundary issue. It was the first actual determination made in response to that decision and it was one that was adverse to the heritable interests of the defender.”

He continued: “In my opinion the point in time when damnum occurred was the date when Mr Koss, as the then duly authorised and mandated law agent of the defender, received notification that his client’s application to the Land Register had been rejected because of the boundary issue. The rejection was the first averred consequence of the decision taken at the 2010 meeting about the boundary issue. It was the first actual determination made in response to that decision and it was one that was adverse to the heritable interests of the defender.”

Sheriff Miller concluded on this part: “I hold 25 November 2015 to be the appropriate date for the purposes of section 6 of the Prescription and Limitation (Scotland) Act 1973. That was the date on and from which the obligation became enforceable. That obligation subsisted from then for a continuous period of five years. That period expired at midnight on 24 November 2020. As at that point in time the defender had not made any relevant claim in relation to the obligation. By the time he raised his counterclaim the obligation to make reparation on which he founds in it and the legal ground on which he presented it had prescribed.”

Addressing a claim for stress-related damages, he added: “The defender does not aver that the pursuers assumed duties under the contract in respect of the defender’s personal wellbeing that included the substance of his head of claim and nothing was advanced to support it being in a class of contract where the consequences he asserts flow from it as a matter of law. His averments in respect of stress, distress and inconvenience are irrelevant. Furthermore, and in any event, what he does aver is so manifestly lacking in specification that it is irrelevant.”

The pursuers were therefore assoilzied from the crave of the pursuer’s counterclaim, and the cause appointed to a hearing to determine further procedure.