Martin Hines and Wallace Commercial Limited v. King Sturge, LLP [2010] CSIH 86

Reclaiming motion:- The first and second named reclaimers occupied business premises on St Vincent Street, Glasgow, which were badly damaged during a fire in April 2005. It was averred that the respondent to the action was the property manager of these premises, with responsibility for their maintenance. This was said to include responsibility for maintenance of a fire monitoring system, upon which the first and second named reclaimers relied. They averred that they paid an annual service charge as tenants of the properties, which included the provision of fire alarm testing and maintenance.

On the night of the fire, the fire alarm system did not work, as it was not operational following the respondents' failure to set up a new telephone connection line. It was averred that the absence of a monitoring system to alert Strathclyde Fire Brigade meant that the fire service experienced significant delays in identifying the location of the outbreak of the fire, which caused or materially contributed to the extent of the spread of the fire, and the loss and damage suffered by both reclaimers. But for this delay, it was averred that the loss and damage sustained by the reclaimers would have been significantly reduced.

The defenders and respondents had tabled a plea-in-law to dismiss the action on grounds of the irrelevance and lack of specification of the pursuers' averments. Following a procedural hearing in July 2009, the Lord Ordinary sustained that plea-in-law and dismissed the action. The pursuers and reclaimers appealed against that decision in the present action. The reclaimers argued that the Lord Ordinary had dismissed the action on the basis that there was no duty of care owned by the respondents to the reclaimers. However, the Lord Ordinary had not dealt with their secondary argument, and counsel submitted that there were in fact three alternative legal bases upon which liability could lie. First, there was a special relationship between the reclaimers and the respondent, giving rise to a duty of care. Secondly, in any event, the reclaimers had relied in fact upon the respondent in relation to the provision and maintenance of the fire alarm and monitoring system. Thirdly, esto, the reclaimers could also rely on the tripartite test explained in Caparo Industries Plc v Dickman and others [1990] 2 A.C.605. The reclaimers argued that these three bases were alternatives. The respondents however argued that, if a particular set of circumstances one of these tests was not satisfied, then it followed that none of the other tests could be satisfied either.

The court doubted whether the submissions of the respondent were correct on this point. Noting that in order to achieve justice in widely different situations, the Inner explained that the courts have devised different tests apt to particular situations and in those circumstances, it is open to the courts to reach a view as to which of the several tests is appropriate to the kind of circumstances which with the court has to deal. The court concluded that the tests could not be seen as strict alternatives.

The court noted that while at the time of the fire, the respondents had no formal contract for the management of the building with its owners nevertheless, there was plainly an informal arrangement between those parties, under which the respondents had assumed some element of responsibility, therefore satisfying the Caparo tripartite test. Moreover, it would not be difficult to successfully argue that there was a relationship of proximity between the reclaimers and respondents on this basis. Finally the court found it particularly persuasive that the reclaimers paid a service charge to the reclaimers, indicating a degree of reliance that the respondent would perform their duties with reasonable care.
The court therefore held that if all the reclaimers' averments were proved, it could not say that the claim would fail, and accordingly recalled the interlocutor of the Lord Ordinary, allowing proof before answer on the whole of the case (Lord Osborne and Lord Emslie; Lord Carloway dissenting).