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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Musselburgh and Fisherrow Co-Operative Society Ltd v. Mowlem Scotland Ltd [2004] ScotCS 52 (03 March 2004) URL: http://www.bailii.org/scot/cases/ScotCS/2004/52.html Cite as: 2004 SCLR 412, [2004] ScotCS 52 |
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OUTER HOUSE, COURT OF SESSION |
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CA30/02
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OPINION OF LORD EASSIE in the cause MUSSELBURGH AND FISHERROW CO-OPERATIVE SOCIETY LIMITED Pursuers; against MOWLEM SCOTLAND LIMITED Defenders:
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Pursuers: Buchanan; Semple Fraser WS
Defenders: S. C. Smith; Masons
3 March 2004
Introductory
[1] In early 1991 the pursuers and the defenders entered into a building contract whereby the defenders undertook both to design and to construct a leisure centre - now known as the Quayside Leisure Centre - on ground owned by the pursuers at Fisherrow, Musselburgh. The contract made use of a standard form of building contract, namely the Scottish Building Contract with Contractor's Design (Revised April 1989) issued by the Scottish Building Contract Committee. The pursuers employed a firm of surveyors, Robertson & Dawson, to administer the contract on their behalf. On 1 May 1992 those surveyors certified that practical completion had been achieved on the preceding day, 30 April 1992, and that the defects liability period for which provision was made under the contract would accordingly expire on 29 April 1993. The pursuers took occupation of the leisure centre and opened it to the public in the course of May 1992. The leisure centre contains, among other things, function suites, a bar and a restaurant and, particularly, leisure facilities which include a swimming pool. In the present action, which was raised in February 2002, the pursuers seek damages in respect of certain defects in the design and construction of the swimming pool.
Topography
[2] The room or hall within which is situated the swimming pool is rectangular in plan, the long axis of the hall running roughly east/west. The wall at the eastern end separates the swimming pool hall from the bar and restaurant area, access to which may be gained through a door at the south-eastern corner of the hall. To the west of the swimming pool hall lie the toilets, changing accommodation and the other leisure facilities and, at the northern end of the western wall of the pool hall, the plantroom containing various items of equipment necessary for the operation of the swimming pool (and also the spa and children's pools which are adjacent to the main swimming pool). The main swimming pool itself may, with some loss of accuracy, be described as generally rectangular in plan, its long axis also being approximately east/west. The deep end of the pool is at the east, the shallow end at the west.
The duct
[3] Surrounding the swimming pool is, of course, a floor or deck, spanning between the side of the pool and the outer walls of the swimming pool hall. Underneath that floor or deck is a void, or duct - "the duct" - running round the swimming pool itself. The floor of the duct, in its east to west sections on the north and south of the pool tank slopes downwards from west to east commensurately with the decline of the pool floor itself from the shallow to the deep end. In the sector of the duct running along the northern side of the pool tank are to be found, among other services, the hot water pipes supplying hot water to the plantroom and the showers, toilet accommodation etc in the changing rooms which, as already mentioned, lie to the west of the swimming pool hall. The hot water comes from the boilerhouse serving the whole complex which is situated in the eastern part of the complex containing the bar and restaurant facilities. Access to the duct may be obtained via a number of manholes in the deck or floor surrounding the swimming pool. There is also an opening between the duct and the plantroom through which pass various pipes, but the opening is too small for human passage.[4] There are no drains leading from the floor of the duct. According to the surmise of some of the witnesses, the probable reason for this is that the small elevation of the site above sea level means that the floor of the duct is too close to the water-table to enable drains to be constructed under it. The drawings which have been lodged in process indicate that sumps were to be created to accommodate pumps in the north-eastern and south-eastern corners of the duct. In the event, the floor of the duct was formed without sumps and it appears that when this omission was noticed the surveyors acting for the pursuers agreed, in the course of the process of making good defects, that a dish or hollow in the floor be created in order to assist the operation of the sump pumps provided for the event that it be necessary to remove water from the duct. Sump pumps of the general type supplied and fitted in the duct operate automatically, in the sense that a device will activate the pump if the accumulated water rises to a given level and the pump will thereafter operate until the water level falls to another, lower given point. The sump pumps at the Quayside Centre discharge via discharge pipes to an open drain situated in the floor of the plantroom. An observer would be able to see water from the outlet of the discharge pipe falling into the drain if either or both of the sump pumps were in operation.
The pool construction
[5] Although there are certain pre-construction drawings indicating an intention that the swimming pool tank be a monolithic construction from concrete it is not in dispute - and was confirmed by the intrusive investigation carried out on the pursuers' behalf by Mr David Alexander, a chartered civil engineer and currently Divisional Director (Building Structures) with Babtie Group Limited - that the swimming pool tank is constructed using blockwork. The likely construction is that shown in the drawing No F604/3 by Hillhead Filtration and Engineering Limited (a sub-contractor of the defenders), a copy of which is annexed to Mr Aleaxander's report (No 6/6 of process). The drawing shows two leaves of "unicrete" walling blocks with an internal core of steel reinforced concrete. Although not demonstrated in the drawings lodged in process, such a construction implies the need for at least a waterproof render between the poolward leaf of blockwork and the tiling visible to the swimmer. The double leaf blockwork construction constituting the swimming pool tank does not, however, support the poolward edge of the floor slab of the walkway or deck surrounding the swimming pool itself. That support is provided by a separate blockwork construction erected immediately adjacent to (but not structurally linked or connected to) the outer blockwork leaf of the swimming pool tank. In other words, proceeding from the duct towards the water in the pool one has successively (i) the blockwork construction supporting the floor slab of the walkway around the pool; (ii) the blockwork outer leaf of the swimming pool tank; (iii) the inner core of reinforced concrete; (iv) the inner (or poolward) blockwork leaf of the swimming pool tank; (v) the waterproof render applied to that inner leaf; and (vi) finally, the ceramic tiles.[6] The swimming pool was designed and constructed as a "level deck" swimming pool. There is accordingly around the perimeter of the pool a continuous overflow channel, surmounted by grating, which abuts and is approximately level with the upper surface of the perimeter walkway. In normal operating conditions water from the pool spills through the grating thus maintaining the water level in the pool at approximately the same level as the floor of the surrounding walkway. The water which thus spills through the perimeter grating into the perimeter overflow channel then drains from the overflow channel through seven drainage holes in the base of the channel, the holes being located at intervals around the perimeter of the pool. Each drainage hole links to a drainage pipe which descends vertically for a short distance in the structure of the swimming pool tank and then, turning through approximately 90o, proceeds broadly horizontally - though no doubt with a slight fall - through the floor slab support wall to join a collector pipe taking the collective overflow back to the plantroom for eventual re-circulation back to the body of water in the swimming pool.
The defects
[7] Put very shortly, the primary complaint of the pursuers is that water from the swimming pool continually leaks into the duct, from which it requires to be removed by the sump pumps. The continuing ingress of water led to the failure, in early 1999, of the hot water supply pipe serving inter alia the toilet and changing areas by reason of external corrosion of the pipe. The failure in due course prompted investigations leading to this litigation. The defects said to contribute to the continual presence of water in the duct may be described as follows:-
(i) The first defect relates to the design of the relationship between the overflow channel and the surrounding walkway. The design, and eventual construction, provided only for a sealant at the joint or interface between the outer face of the overflow channel and the inner face of the walkway. According to both Mr Alexander and Mr David Hutchison, the expert witness for the defenders, while a sealant may prevent ingress of water for a short period of time, the eventual contraction of the sealant and differential movement in the adjacent structures renders it ineffective, thereby allowing water to penetrate through the joint between the edge of the overflow channel and the surrounding walkway and, having so penetrated, to descend to the floor of the duct. A sound and proper design would not have relied upon a sealant at all but would have made provision for a water bar and waterproof membrane underlying the whole of the floor slab and channel, the membrane being brought down into the inner face of the tank wall.
(ii) The second defect relates to the junction between the seven drainage holes in the overflow channel and the succeeding pipework taking the overflow water from the channel back to the plantroom. Put shortly, and perhaps crudely, simply inserting a pipe into the aperture in the earthenware or concrete channel does not provide a watertight joint since the aperture is not created with such precision that no gap or space will exist between the wall of the aperture and the outer face of the pipe. Water can therefore escape through that gap or space and run down the external surface of the outlet pipe. One means of addressing this problem is to fit a puddle flange. The leaflet No 6/54 of process illustrates varieties of puddle flange. Put in layman's terms, a puddle flange consists of a washer-like disc, the central hole in which is constructed with such precision as to enable a watertight junction between it and the external wall of the pipe to be obtained. The disc requires to be properly bedded or built into the masonry or other structure through which the pipe passes, in such a way that water cannot pass along and around the external circumference of the flange. A properly fitted puddle flange will not normally be visible. The manner in which the junction between the outflow aperture in the overflow channel and the outlet pipe was to be made watertight is not detailed or described in any of the available drawings lodged in process. It appears that puddle flanges were provided in respect of at least some of the outlets but were not properly fitted into the surrounding structures since they were in some instances visible. In due course measures were taken by the pursuers to deal with the relatively significant quantities of water leaking from the defective arrangements at the junction between the overflow channel outlets and the pipework. These measures are described later.
(iii) Thirdly, following further investigation after the raising of the action, the pursuers contend that in addition to the ingress of water into the duct resulting from the two foregoing defects (which are both related to the level deck arrangements which involve water flowing over the channel grating and into the channel to and drainage from that channel), there is also a seepage of moisture from the body of water in the swimming pool through the swimming pool tank construction itself. The seepage indicates the absence, or failure, of a waterproof render to the poolward side of the swimming pool tank construction. According to Mr Alexander, while the amount of fluid entering the duct by reason of such seepage may be relatively small - in the words of counsel for the defenders "de minimis" - its presence threatens the structural integrity of the tank by inter alia corroding the reinforcement. On the assumption that there was such seepage (at least the origins of which he disputed) I did not understand Mr Hutchison, the defenders' expert witness, to disagree that the seepage would ultimately be pernicious to the structure of the tank.
The defenders concede the presence of the first and second of these defects and they accept that those defects constitute breaches of contract on their part. They do not concede the existence of the third defect. But as respects all of the defects the defenders plead that the pursuers' claims have prescribed in terms of the five-year prescription enacted under section 6 of the Prescription and Limitation (Scotland) Act 1973 - "the Act". And they refer to various matters arising in the defects liability period and subsequently.
[8] There is understandably no dispute between the parties that, having regard to the terms of Schedule 1 to the Act, the claims presented by the pursuers have, as their correlative, obligations to which the five-year prescription under section 6 of the Act applies. The answer to the plea of prescription which the pursuers advance in their pleadings includes the invocation of section 11(3) and subsection (4) of section 6 of the Act. The former (section 11(3)) provides, put shortly, that where the creditor "was not aware, and could not with reasonable diligence have been aware that loss, injury or damage caused [by an act, neglect or default] had occurred" the starting date for the running of time shall be the date when "the creditor first became, or could with reasonable diligence have become, so aware". The latter statutory provision (section 6(4)) provides for the exclusion from the computation of any prescriptive period under section 6 of, among others, any period during which by reason of "error induced by words or conduct of the debtor, or anyone acting on his behalf, the creditor was induced to refrain from making a relevant claim in relation to the obligation". In his closing submissions, counsel for the pursuers did not advance any discrete submission on section 6(4) and, as I understood his response to the request of counsel for the defenders for clarification of the pursuers' position, counsel for the pursuers did not found upon any representation by the defenders as giving ground for an exclusion from the reckoning of time under section 6(4).[9] With that initial exposition of parties' positions, it is appropriate to turn to the evidence of how and when the defects became manifest to the pursuers.
History - defects liability period
[10] Much of the evidence relating to the state of knowledge respecting the existence of the defects now in question during the 12-month defects liability period following practical completion on 30 April 1992 stems from the contemporaneous correspondence between the defenders and Messrs Robertson and Dawson, the surveyors employed to administer the contract on the pursuers' behalf. Mr Dawson was adduced as a witness for the pursuers but he no doubt understandably agreed that he had little detailed recollection of matters going beyond the correspondence and his normal professional practice at that time.[11] From the documents, namely the annex to the letter of 6 May 1993 from Robertson and Dawson to the defenders No 6/21 of process, it is evident that on 3 February 1993 Mr Dawson carried out an inspection, in the company of Mr Pinion, the pursuers' then general manager, and another of their employees, Mr S Knight. The defects thereafter reported to the defenders, by letter of 10 February 1993, included, so far as relevant to this litigation, the following item:-
"20. You have been advised of difficulties with the sump pump in that it is not positioned at the lowest point in the duct under the swimming pool and therefore adjustments to this sump pump including some dishing of the duct floor level will be necessary. The operation of the sump pump begs the question where the water present in the duct is coming from and it appears to us that certain of the jointing on the edge of the tiles at the edge of the pool is not sufficient to stop water entering the duct. Your further investigation of this matter would be appreciated.".
In an internal memorandum dated 3 March 1993 (No 6/14 of process) the defenders' Contract Manager, Henry Mooney, wrote as follows:
"Since our flooding problem at the above we have established that the pumps installed and duct design were unsuitable in that a sump should have been provided within the floor of duct. This sump would have required to have been approximately 300 (sic) deep to suit the pump.
The duct floor cannot accommodate such a sump depth and the solution is to install a shallow-depth pump as per the attached fax from Crownhouse.
We require to form two of these shallow sumps at the bottom of the duct ramps...."
On 18 March 1993 Mr Dawson wrote to Mr Mooney complaining of the absence of communication from the defenders respecting the defects intimated, on 10 February, following the February inspection. The letter (No 6/15 of process) includes this paragraph:-
"We are advised by Musselburgh and Fisherrow Co-operative Society Limited that considerable staff time is being spent clearing the water from the duct adjoining the swimming pool. On the basis that the existing sump pump is not up to the job and given a suggestion from you that this matter would be given priority, your inaction of apparent inaction is extremely disappointing.".
Mr Mooney replied next day, 19 March. The letter (6/18 of process) includes the following:-
"22. Two new sumps are to be formed during next week. One new pump has been ordered to replace the faulty one and we shall monitor the performance of the other pump.
... We note your comment regarding the water to the duct, however we do feel that this information is somewhat distorted.
It appears that the pump is operating as designed, however, as there is only one pump at present; see item 22, it is having to work harder and the assumption appears to be that this is because there is more water in the duct.".
By a letter dated 6 April 1993 (No 6/19 of process) Mr Mooney wrote, inter alia, that:-
"We would also confirm that the two pump sumps have been installed in the swimming pool service duct and that the faulty pump has been replaced, the existing pump remains operational.".
"9. The sump pump next the bar door is not working properly and it is believed that the sump under the pump is not deep enough to remove all the water.
10. There is a leakage from the pool into the duct surrounding the pool of approximately 60 gallons a day. This is considered excessive and the source of such leak should be isolated and repaired.".
In his oral evidence Mr Dawson stated that the figure of 60 gallons per day would have been information provided by the client, though he, Mr Dawson, would also have checked that water was leaking. He considered that such a leak required to be identified and repaired.
[13] Following the expiry of the defects liability period Mr Dawson continued to press for rectification of the defects and ex facie the correspondence (cf No 6/23 of process) some of the defects in the building as a whole were receiving attention. However, as respects matters pertinent to this dispute, the defenders wrote by letter dated 17 August 1993 to Messrs Robertson and Dawson stating on page 4:-
"Leak at poolside duct. A new sealant was installed on Thursday, 12 August 1993, with the old sealant removed.".
This statement is probably consistent with the oral evidence of Miss Claire Shiels who, while still employed as a fitness instructor, recollected the return of the building contractors who lifted off all the perimeter grating tiles and put in a new sealant. The letter of 17 August 1993 concluded with the statement that:-
"We [the defenders] now consider that all items of defects are complete and we would suggest that a joint inspection be carried out at your earliest".
[15] Mr Dawson struck me as a careful witness and no criticism was advanced as to the reliability of his testimony. There is no reason for thinking that he did not follow his normal practice of inspection shortly after the receipt of the defenders' letter of 17 August 1993, which followed very shortly after the replacement of the sealant on 12 August 1993, and that he was satisfied that the problem of the leakage of material quantities of water into the duct had been remedied. As I have already mentioned, it was accepted by the expert witnesses that the sealant would be effective for a limited period in eliminating the leakage at the junction between the overflow channel and the perimeter walkway. Mr Dawson deponed that he would have checked visually that the sealant had been replaced and if it were apparent that water was still coming through, it is very unlikely he would not have alerted the defenders again. Mr Dawson further stated that if, subsequently to August 1993, it had been reported to him by the client that sump pumps were in continual operation his view would have been that urgent remedial measures were necessary since that was not how the pumps were intended to work. He thought he would have recalled such a report, had it been made, but he could not recall any such report.
History - post final inspection
[16] There is no evidence suggesting that after the inspections which it is to be inferred were carried out by Mr Dawson in the early autumn of 1993 further complaints of leakage of water into the duct were in fact made to Messrs Robertson and Dawson by their client. But on the other hand there is evidence of continual operation of the sump pumps and of the presence of substantial quantities of water in the duct. Before adverting to this in more detail, it is convenient to record the changes in personnel within the pursuers' organisation which occurred at around this time.[17] During the defects liability period and until September 1993 the pursuers' general manager was a Mr Pinion. As I have already mentioned he attended the inspections with Mr Dawson and according to Mr Dawson, whose evidence on this matter was not challenged, he copied the correspondence between himself and the defenders to Mr Pinion. The pursuers did not tender Mr Pinion as a witness. In September 1993 Mr Thomas Lees replaced Mr Pinion as general manager. There was a four-week changeover period in which the two liaised or conferred, but according to Mr Lees he was not alerted to any problem with the swimming pool at the Quayside Leisure Centre, which he regarded as a successfully completed development. Mr Lees' focus was almost entirely on the pursuers' other trading activities, which at that time were in much greater need of his attention.
[18] The management structure which was put in place initially for the Quayside Leisure Centre involved a manager for the whole centre who answered to the pursuers' general manager. Below the Quayside manager were two assistant managers; one had responsibility for the swimming pool and leisure facilities; and the other had responsibility for the restaurant, bar and function suites. At some point in time, not precisely established in evidence, the Quayside manager ceased to be employed and was not replaced. The adjective "assistant" was no longer applied to the two managers beneath him who answered thereafter directly to the pursuers' general manager. Miss Claire Shiels joined the staff of the pursuers on the opening of the Quayside development in May 1992. She was engaged as a fitness instructor. As a fitness instructor she required to take her turn with other fellow employees in attending to the daily checks of the pool filtration system and the pool backwash operation, carried out at intervals of every three days. When she began employment with the pursuers the leisure facility assistant manager, who appointed her, was a Mr Gavin Lightwood. When Mr Lightwood left she was promoted to assistant manager and in due course, when the management structure changed, to manager of the leisure facility. Again, the timing of these changes was not clearly established in the evidence. Miss Shiels, whose employment with the pursuers ended in January 2001, said that she became assistant manager in the autumn of 1992 and manager in the following summer. As already mentioned, Miss Shiels recollected the contractors' returning to replace the sealant around the pool. Miss Shiels was clear that at that time she was still a fitness instructor. Miss Shiels also recollected an earlier meeting between the builders and the manager to go over the snagging list but she was not involved. There is no evidence that the building contractors replaced the sealant on more than one occasion and since the documents locate that replacement in August 1993 I conclude, on the basis of the material before me, that it is more probable that Miss Shiels' advancement from fitness instructor to assistant manager occurred shortly after August 1993, in the autumn of that year rather than, as she thought, autumn 1992. So it appears that by at least the late autumn of 1993 neither the manager of the leisure facilities nor the general manager had been directly involved in the rectification of defects during the earlier defects liability period and the immediate months thereafter.
[19] On an occasion which occurred in 1994 Miss Shiels received a report from the pursuers in-house maintenance man, Mr Duncan McIntyre, that there was water in the duct which was "knee deep". Mr McIntyre did not give evidence but according to Miss Shiels the presence of that quantity of water was attributed to the failure of the sump pump. (Miss Shiels' understanding was that there was only one pump, in the north-east corner, but I think that understanding stems simply from the fact that in her experience only the north-east sump pump was replaced.) Miss Shiels called in contractors to replace that sump pump. The employees of those contractors who carried out the replacement pointed out to her that one could tell whether the sump pump was actually functioning by observing whether water was being discharged from the sump pumps' outlet pipe, discharging into the open drain in the plantroom. Thereafter, Miss Shiels and the staff knew to check from time to time that the sump pump was operating by observing water from the discharge pipe feeding into the drain in the plantroom. Prior to getting that information, said Miss Shiels, she and the staff did not know how to check whether the pump was operating. However, according to Miss Shiels the sump pump had been operating regularly prior to this "knee deep" incident. It is not immediately clear upon what basis Miss Shiels was aware of that continual operation since, as I understood her, the sump pump did not produce noise audible over the other ambient noise and observing water discharging into the plantroom drain was without significance for her. But at all events, following the replacement of the sump pump in 1994 Miss Shiels was aware of the continual entry of water into the duct and its removal by the sump pump. Miss Shiels did not however take any steps to investigate matters or to check whether it was acceptable that there be water in the duct. Her view of matters was that it was normal to have water in the duct. That was why there was a sump pump and, for her, an abnormal state of affairs arose only when the pump failed.
[20] For his part Mr Lees appeared in his evidence to accept that prior to the fracture in 1999 of the hot water pipe passing through the duct, he had been made aware through conversation with Miss Shiels of the replacement of at least one sump pump and of the entry into the duct of water which was being removed by the sump pumps but, no doubt consistently with Miss Shiels' view that there was nothing abnormal, he received no report from her suggesting anything was wrong. Mr Lees said that his only prior experience of a sump pump had been in the basement of a store in London which was prone to flooding and he assumed that the sump pump in the duct was simply to deal with any occasional ingress of ground water.
The hot water pipe failure - investigations
[21] As already mentioned, in early 1999 a failure occurred in the supply of hot water to the pool and the changing accommodation. This required the urgent replacement of the hot water supply pipe. To Mr Lees it appeared (rightly) that a fracture of the supply pipe should not have occurred so early in its life. On 3 March 1999 Mr Lees wrote to the defenders advising them of the corrosion of the pipe and its replacement and sought their observations. On 19 March 1999, not having received any reply, Mr Lees wrote again advising that he had sought specialist advice and that the failed sections of pipe were available for inspection. The source of the specialist advice was a firm of chartered engineers who reported to the pursuers on 22 March 1999. Put shortly they concluded that the pipe had been corroded from the outside inwards as a result of the insulation being saturated with a chloride/acid solution possibly leaking from the pool into the duct and they offered views on possible sources of water ingress. On 9 April 1999 the defenders responded to the broad effect that they accepted that the pipe had been corroded from an external source but the corrosive solution was water descending through the perimeter seals of the manholes in the walkway surrounding the pool which manholes, it was asserted, had not been properly screwed down onto the rubber seals. There then followed an exchange of correspondence in which, having obtained advice from the engineers, Mr Lees sought a meeting to discuss an amicable resolution of the matter; but this concluded on 11 June 1999 with a letter (No 6/43 of process) in which the defenders summarised their contention as being that the problem of corrosion of the hot water piper was due to lack of maintenance and poor housekeeping.[22] An hiatus in the investigation then appears to have ensued until the spring of 2000 when the pursuers commissioned Mr David M Richmond of the firm of Richmond Associates to investigate the continuing problem of the ingress of water into the duct. The expertise of Mr Richmond and his firm lies particularly in filtration and water treatment plants for swimming pools. Mr Richmond issued his first report (No 6/3 of process) on 17 May 2000. For immediate purposes it is unnecessary to describe in detail the tests which he had arranged to be carried out. He concluded that the source of the water to be found in the duct was swimming pool water and he identified the level deck surround overflow channel blocks and their associated outlet connections as the probable areas in which the leaks were to be found. A meeting to discuss further tests was held on 8 June 2000, attended also by Mr R Cameron, a member of the firm of swimming pool maintenance contractors then employed by the pursuers to carry out the normal periodic maintenance of the pool and its filtration equipment. The course of action then agreed was set out by Mr Richmond in a letter of 13 June 2000, the relevant sections of which are contained in the second Richmond Report of 14 May 2001 (No 6/2 of process).
[23] The course of action encompassed Mr Cameron's manufacturing and fitting "top hats" to the outlets from the overflow channel to the pipes draining the water from the channel and leading it back via the collector pipe to the plantroom. (That is to say, defect (ii) referred to in paragraph [7] supra.) The "top hats" consist of short (300 mm) sections of two inch diameter PVC pipe, one end of which would be fitted externally with a 100 mm diameter flange. (The expression "top hats" was used because if one placed the end of the pipe fitted with the flange downwards, the construction resembled a miniature gentleman's top hat.) The intention was that the "top hat" be inserted, upsidedown, into the orifice draining from the overflow channel with the flange (or "hat brim") of the "top hat" being sealed to the surface of the channel. By that means the return water to the swimming pool would not escape through any gap resulting from the absence or defective installation of the puddle flanges.
[24] Following the fitting of the top hats by Mr Cameron three further tests were carried out in April 2001. These are described in the second Richmond Report (No 6/2 of process). In summary the results demonstrated firstly that a substantial proportion of the water leaking from the pool had been via defect (ii) and that this had been eliminated by the fitting of the top hats; secondly, the joint between the channel blocks and the surrounding floor or walkway (but not the joints between the channel blocks themselves) was a further significant source of leakage (that is to say, defect (i) was present).
Prescription - the admitted defects
[25] It is, I think, convenient first to consider whether the defenders' obligations to make reparation to the pursuers for the loss suffered by the pursuers by virtue of the defenders' admitted breaches of contract - that is to say defects (i) and (ii) - have prescribed, leaving for later discussion the existence of the third, disputed defect and, assuming its existence, whether any obligation arising from it has also prescribed.[26] I would at the outset mention a point raised by Mr Smith, for the defenders, in the course of his submissions concerning the appropriate starting point for the running of time in a contract such as this. I do so by way of record, since in the circumstances of the present case I do not think anything turns upon it. Mr Smith submitted that - setting apart all issues of knowledge and reasonable diligence - the defenders' obligation to pay damages for any defect in the building became enforceable on practical completion (30 April 1992) notwithstanding the provision in the contract for a defects liability period. In that connexion counsel referred to Keating on Building Contracts (7th Edn), paragraphs 10-27 and Hudson on Building Contracts (11th Edn), paragraphs 5-053. The passages to which my attention was drawn give support for the proposition of counsel for the defenders that the contractor's obligation is to complete the works in accordance with the contract by the completion date and (absent special words) the existence of a defects liability period will not remove the employer's ability to claim damages for any breach of that obligation, although the amount recoverable may be reduced if the employer deny the contractor the opportunity to remedy the defects during the defects liability period. The passages do not however appear to deal expressly with the case of a defect brought to the contractor's attention during the defects liability period to which the contractor insufficiently attends and hence with whether defective performance by the contractor in his steps to remedy the defect brought to his attention might be seen as a breach of a separate obligation to make good and thus, from the point of view of prescription provide a different terminus de quo. However, in the particular factual circumstances of the present case I do not consider it necessary to reach any view on this issue since the action was not raised until February 2002 and the quinquennium proceeding it thus does not put in issue whether the relevant breach of contract was at practical completion or at the subsequent failure to rectify properly the defects brought to the contractor's attention.
[27] I would also record that I understood it not to be in dispute that, notwithstanding the date of the breach of contract, a claim for damages did not become enforceable until the concurrence of injuria and damnum; and that in the case of a defective building, damnum did not consist in the mere provision of a building with a latent defect but required an outward physical manifestation of the existence of the defect. In that regard counsel for the pursuers, Mr Buchanan, referred to Strathclyde Regional Council v Borders Engineering Contractors Limited 1998 SLT 175, 179 J-K. Counsel for the defenders however did not dispute the necessity for some physical manifestation of the defect before it could be said that damnum had occurred in conjunction with the earlier injuria. He submitted however that in the present case that manifestation was to be found in the existence of quantities of water in the duct from a time preceding by at least five years the raising of the action in February 2002.
[28] In my view it is clear that the consequences of the two admitted breaches of contract committed respecting the design and construction of the swimming pool - defects (i) and (ii) - were manifest if not in the autumn of 1993, at least by the discovery of the "knee deep" water in 1994. In that respect one is no longer talking of a truly latent defect. The focus must then shift to whether (a) the pursuers were unaware that the manifestation of water in the duct, known to them by at least 1994, was attributable to an act of neglect or default on the defenders' part; or (b) if unaware, the pursuers could yet with reasonable diligence have established that attribution.
[29] The approach followed by counsel for the pursuers in his submissions may be summarised as follows. Firstly, it was to be inferred, since it was Mr Dawson's usual practice, that Mr Dawson had inspected the building after the defenders' letter of 17 August 1993 and had been content that all the defects identified in the currency of the defects liability period had been rectified. The pursuers were thus entitled, said counsel, to believe that any problem had been cured. Thereafter, as Miss Shiels deponed, it would not have been apparent to her that there was a problem. The quantity of water leaking from the pool was automatically replenished; Miss Shiels had no cause to notice the discharge from the sump pumps until the first replacement (after the "knee deep" discovery); the tradesmen attending advised her that she could and should check whether the sump pump was operating by noting the periodic discharge; and since it was accepted that a pump in regular use would need to be replaced at intervals nothing alerting or alarming was to be inferred from the occasional replacement of a pump. The very fact that sump pumps were present indicated that accumulating amounts of water in the duct were to be expected. Though Mr Lees was aware, from various discussions with Miss Sheils, that at least one sump pump had been replaced, his belief was that the sump pumps were to deal with the influx of possible ground water; and he relied upon Miss Shiels to report significant problems to him.
[30] I am prepared to accept that prior to investigations following the 1999 fracture of the hot water supply pipe Miss Shiels, though well aware of the presence of water in the duct, did not in fact realise that its presence manifested a defect or a possible defect in the design or construction of the installation. She did proceed on the basis that the presence of water in the duct was normal and that the sump pump was there to deal with that normality and, further, that the avoidance of excessive accumulation through sump pump failure could be avoided by monitoring the periodic discharge of water from the sump pump discharge pipe feeding into the open drain in the plantroom. I am equally prepared to accept that Mr Lees was not in fact actively conscious that the presence of water in the duct might manifest a defect in the design or construction of the pool. His major concern was with the pursuers' other trading activities. And since, as he said, replacement of the sump pump involved only a small amount of money he attached no particular significance to its replacement. Mr Lees deponed that, in light of his only previous experience of sump pumps, he believed that the sump pump was for the removal of ground water. While that may have been in the rearward recesses of mind, my impression from his evidence as a whole was that he was - I do not suggest improperly - pre-occupied with other much more pressing concerns within the pursuers' wider trading activities.
[31] However, while counsel for the pursuers concentrated on Miss Shiels' and Mr Lees' absence of awareness or insight into the fact that the ingress of water into the duct was other than a normal, intended situation, counsel for the defenders approached matters on the basis that the knowledge of those two individuals did not constitute the entirety of the relevant knowledge of the pursuers as a corporate body. He pointed to the fact that ingress of substantial quantities of water into the duct had occurred during the defects liability payment. The pursuers themselves made complaint about it to Mr Dawson and supplied him with the 60 gallons per day figure. Mr Pinion and the pursuers' Mr S Knight had attended the inspection. Mr Dawson had copied all the correspondence passing between his firm and the defenders to the pursuers. The defenders' assertion in the letter of 17 August 1993 was not relied upon by Mr Dawson as an assurance that the defenders had properly rectified all the defects. If Mr Dawson had been informed thereafter of a continuing leakage of water into the duct, he would have taken immediate steps to have the cause identified and remedied. Had the pursuers exercised reasonable diligence they could at least have checked their files or taken advice from Mr Dawson. But notwithstanding the knowledge gained during the defects liability period and their knowledge thereafter of continuing ingress of water into the duct they made no enquiry nor took any action respecting the presence of water in the duct until the fracture of the hot water supply pipe in 1999.
[32] In my opinion there is much force in the submissions made by counsel for the defenders. Neither Mr Pinion nor Mr Knight were tendered as witnesses but it is clear from Mr Dawson's evidence - and the correspondence - that those two individuals knew that the continual ingress of water into the duct was not a normal, acceptable situation but implied the existence of a deficiency in the design or construction of the pool. As was put by counsel for the defenders in his submissions, what is difficult to understand is why the ingress of water, which was known by the pursuers to be a manifestation of a defect and a cause of complaint during the defects liability period, should not have been so perceived when it was known, shortly after the expiry of the defects liability period, that the same phenomenon was present. The problem, said counsel for the defenders, was that on the evidence led by the pursuers the knowledge plainly enjoyed by Messrs Pinion and Knight was never shared or passed on within the pursuers' organisation.
[33] The state of knowledge of a corporate body can present difficult issues in varying fields of law including, for example, the ability of a company to commit criminal offences at common law or under statute. In a context such as the present it may be arguable whether knowledge gained by one officer of a company must always be deemed to be held by the company thereafter (even if, to take an extreme example, the officer or employee died immediately after receipt of the information). However, as I understood him, counsel for the defenders did not adopt such a "deeming" approach but viewed matters rather from the perspective of "reasonable diligence".
[34] In adopting that perspective I think counsel for the defenders was correct. Put in blunt terms, the pursuers' difficulty respecting the admitted defects stems either from a failure of Mr Pinion sufficiently to acquaint his successor with the history of the Quayside Leisure Complex contract; or from the failure of Mr Pinion and Mr Knight to alert Mr Lightwood and through him Miss Shiels of the fact that ingress of water was not a normal situation; or from Mr Lees' failure on learning of the presence of water in the duct to review the files relating to the construction of the Quayside Leisure Centre; or indeed from Miss Shiels' failure, within the pursuers' organisation, sufficiently to highlight to Mr Lees the extent of the water ingress or to alert him to any problems. The foregoing is not intended as an exhaustive list of possibilities.
[35] It would not be appropriate for me in these proceedings to attempt to allocate or distribute responsibility for the possible organisational failures catalogued in the preceding paragraph. But I must conclude that either individually or collectively there were sufficient internal failures within the pursuers' own corporate organisation that it cannot be said, echoing the terms of section 11(3) of the Act, that with reasonable diligence they could not have ascertained that they were suffering loss as respect an act, neglect or default flowing from defects (i) and (ii). I must therefore hold that as respects those defects, the obligation of the defenders to make reparation for the loss thereby incurred has prescribed.
Seepage (defect 3)
[36] On 11 November 2002 Mr Alexander carried out an intrusive investigation in order inter alia to confirm the presence or absence of a waterproof membrane in the area of the junction between the floor slab, its supporting blockwork wall and the overflow channel and to confirm that the construction of the pool tank was as had been described in the Richmond report. The intrusive examination involved (a) the removal of a number of blocks at the top of the supporting wall, thereby exposing the underside of the floor slab and (b) the removal of a number of blocks at various locations at the foot of that supporting wall. Those removals thus exposed at certain locations the outward face of the pool tank construction. Having confirmed, as respects the upper exposure, the absence of any appropriate waterproof membrane or water bars, Mr Alexander turned to the lower exposure of the outward face of the tank. He testified that there was clear evidence of dampness seeping through the outer face of the tank, which he said indicated that the waterproof render assumedly applied to the poolward side of the tank construction had potentially failed. Mr Alexander explained that on his drying off the outer face of the tank, water oozed out. Leachate was also present, evidencing that moisture had been coming through the wall of the tank.[37] As to the reason for such seepage Mr Alexander explained that he believed it was probably the result of a design fault. A blockwork construction of the type adopted would be likely to be subject to some movement, productive of hairline cracks in the waterproof render, unless there were adequate provision of movement or expansion joints. There was no indication of such joints in the available drawings. Moreover there was no evidence of the presence of such movement joints in the construction itself. There were no such joints in the blockwork which he had exposed and on the poolward side if movement joints were present those would have been evident in the tiling arrangement - which they were not. There was also a possibility of construction defects, for example if the render were not properly applied and sealed round the pool wall underwater lights. For his part, Mr Hutchison, the defenders' expert, disputed the existence of any deficiency in the waterproof render on the tank or the tank construction itself. The principal basis advanced in his report for disputing the existence of such a defect was that the tests carried out on the instruction of Mr Richmond demonstrated that the pool was watertight. Moreover, there was still water leaking at the joint between the surround channel and the floor and floor slab. Mr Hutchison considered that the water stemming from the leakage at that joint constituted the source of the seepage, by its permeating down the tank structure.
[38] The particular test instructed by Mr Richmond which Mr Hutchison had in mind was the first "drop" test described in paragraph 4.0 of the Richmond Association's report of 17 May 2000 (No 6/3 of process). Put shortly, this test involved lowering the water level in the pool so that the water was no longer able to spill over the grating into the overflow channel. With matters so arranged overnight, Miss Shiels had reported that there was no visually discernible drop in the level of the water the following morning. From this Mr Richmond had concluded that the leakages were associated with the overflow channel and that the pool tank itself was watertight. However, in his oral evidence Mr Richmond made plain that this test was dealing with a gross water loss of many litres in such a period. He was dealing with a very substantial leak and the test was not designed to detect seepage through the tank structure itself. (As has already been mentioned, Mr Alexander made plain that what he observed was seepage of very small volumes and his primary concern was not with the loss of water but with deleterious consequences for the structure.) In the course of cross-examination Mr Hutchison accepted that in order to be confident that there was no seepage the relevant Richmond test would need to be run over a very much longer time - he thought at least seven days. In these circumstances I consider that on this matter the Richmond test is of no assistance and does not indicate that water is not seeping through the structure of the tank.
[39] Mr Hutchison's second ground for believing that seepage of the pool water "horizontally" through the structure of the tank was not demonstrated was that the moisture observed to be exuding from the tank structure was water which originated from the leakage identified in the Richmond report. It was put to Mr Alexander by counsel for the defenders that the seepage observed by him was water from those two sources migrating down the interior of the pool tank structure. Mr Alexander deponed that he thought that to be unlikely. As I understood his evidence, Mr Alexander's reasons for reaching that view may be summarised as follows. First, the suggestion from counsel for the defenders that leakage from the outlet pipes (defect (ii)) introduced water into the base of the core of the structure by allowing water to run down the outlet pipe to the base was unsound in respect that, as described in paragraph [6] above, the outlet pipes descended only for a short distance from the overflow channel before connecting with the connector pipe. In any event, the "top hats" had been installed some months before the intensive intrusive inspection and had been largely successful in eliminating that source of leakage. Secondly, the height of the tank structure, at the points of observation of the seepage, was over 1.5 metres. Given the density of the structure it was highly unlikely that water from the leakage situated essentially at the top of the outer face would permeate into the core of the structure to emerge as seepage at its base. Seepage, as it were horizontally, from the body of water in the pool was the more probable explanation. Moreover, the absence of any evidence of expansion joints provided an explanation as to why the waterproof render should have failed, allowing such seepage through the structure.
[40] In inviting rejection of Mr Alexander's evidence on this branch of the case counsel for the defenders did not suggest that in his account of observing seepage Mr Alexander was other than truthful and reliable. However, said counsel for the defenders, any conclusion as to the source of the water seeping out was based entirely on matters other than that observation and, accordingly, the advantage of Mr Alexander's having carried out the intrusive inspection affording that observation which had been claimed by counsel for the pursuers in course of his submissions did not assist.
[41] I do not think it is wholly correct to say that Mr Alexander's evidence that the seepage was probably from the pool through the tank structure was based entirely on matters other than his actual observation. It appeared to me to be implicit in Mr Alexander's evidence that his observation of the way in which the moisture seeped out from the tank structure played a part in his overall conclusion. Although perhaps difficult to describe in precise wording, the manner in which the seepage appears can be suggestive of a possible root or cause. The general utility of being present at such an intrusive survey and having the opportunity of observation was recognised by Mr Hutchison in the course of his cross-examination. Accordingly to that, albeit limited, extent I consider Mr Alexander's opinion to have the advantage of actual observation.
[42] Turning to the other factors prompting Mr Alexander's conclusion, counsel for the defenders submitted that Mr Alexander had failed to take full account of the continuing leakage at the overflow channel. In his evidence Mr Alexander stated that he had looked at that possibility - namely the permeation of the interior of the tank structure by leakage from the area of the overflow channel - at the time of forming his opinion. Mr Alexander struck me as a careful witness, experienced in his profession, and I accept that he did give the matter consideration. I have already set out the reasons which Mr Alexander gave for concluding that the seepage resulted from permeation directly through the tank structure, as opposed to permeation from leaks at the overflow channel and it is not necessary to repeat them. In his submissions counsel for the defenders did not point to any particular respect in which those reasons were flawed. By contrast, however Mr Hutchison's report proceeds largely on the basis that the Richmond test demonstrated the pool to be "watertight". Hence, on that basis it is concluded that the seepage must come from defects (i) and (ii). But as Mr Hutchison effectively conceded, the Richmond tests do not demonstrate the absence of seepage and so, in my view, an important element in Mr Hutchison's conclusion falls away.
[43] Counsel for the defenders further submitted that Mr Alexander's view proceeded upon speculation that the pool was poorly designed and constructed having regard to the absence of drawings or specifications detailing its construction, particularly the absence of detailed arrangements in the drawings and other documents for making the pool watertight. The witness, said counsel, proceeded on an assumption that the pool was poorly constructed by reason of conclusions drawn from such drawings as are available, those drawings possibly not being the totality of drawings which had existed earlier.
[44] It is the case that Mr Alexander was critical, in various respects, of the arrangements in the contract documentation and drawings and the evident lack of overall co-ordination between those engaged on the defenders' behalf in the design and construction of the pool. It is also the case that Mr Alexander accepted, naturally, that there may have been other drawings, not produced, of which he was not aware. However, on this branch of the dispute what I conceive as important is that the tank is constructed of blockwork, rather than the monolithic concrete structure envisaged in certain of the drawings. A blockwork tank structure of the kind provided requires expansion of movement joints to avoid the occurrence of hairline cracking in the waterproof render. Irrespective of the available drawings, there is, according to Mr Alexander's testimony, no evidence of the existence of such joints. I did not understand Mr Hutchison to dispute either the necessity for such joints; their visibility (if provided) in the manner described by Mr Alexander; or, in casu their absence. It appears to me therefore that there is an evident structural explanation for the potential failure of the waterproof rendering leading to the seepage phenomenon observed by Mr Alexander.
[45] Counsel for the defenders further submitted that the pursuers could have carried out more rigorous investigations such as, in counsel's words, repeated long-term tests properly calibrated to demonstrate seepage from the pool. In the absence of the results of such tests there was, said counsel, no evidence before the court establishing seepage through the walls and the matter had thus not been proved.
[46] There was little evidence led respecting the practicalities or reliability of such tests as counsel for the defenders desiderated in his closing submission. While Mr Richmond made clear that the overnight drop test which he instructed was only intended to deal with the very large leak of water which was occurring and not a de minimis loss through seepage, he was not asked about adapting such a test to detect seepage. Mr Hutchison eventually accepted that the test in fact carried out would not demonstrate the absence of seepage. He volunteered the thought that it would have to be run for a much longer period - seven days - but Mr Hutchison also said that he had no experience in carrying out such tests.
[47] I do not doubt that, ultimately, tests or investigations could be carried out which would conclusively establish the presence or absence of the seepage defect. Thus it may well be that extensive intrusive dismantling of the tank structure would establish beyond any reasonable doubt the presence or absence of the seepage. However, a pursuer is of course not required to establish his case conclusively but only on the balance of probability. The task of the court is to weigh such evidence as is before it and on that material, whether abundant or modest in quantity, reach a view on the balance. There is evidence before me from Mr Alexander of his factual observations and his opinion as an expert to the effect that the seepage defect is present. The only countervailing evidence on this matter is from Mr Hutchison. The reliance placed by Mr Hutchison on the Richmond test is, in my view, clearly misplaced and for the reasons already indicated I find Mr Alexander's evidence more persuasive. Accordingly, weighing the evidence before me the conclusion to be derived from that ponderation is that on the balance of probability I find that water is seeping through the tank construction as a result of defects in such waterproof render as may have been applied to the poolward side of the tank at construction.
Seepage - prescription
[48] Assuming defect (iii) to exist, parties differed in their respective approaches to whether the defenders' liability for that defect had prescribed. In summary counsel for the pursuers submitted that defect (iii) was discrete and separate from the other defects and that where there were distinct defects arising from different failures in construction or design the proper approach was to treat each defect (and its correlative failure in the construction or design) as distinct. On the other hand, counsel for the defenders, as I understood him, adopted the position firstly, that any defect in a building of which the employer in the building contract is aware starts the running of time for all defects; but secondly, in any event, had the pursuers reacted with reasonable diligence, that is to say, earlier, in investigating the gross leakage of water into the duct they would have found (earlier) both the inadequacy of drawings and have conducted the intrusive survey which ultimately led to Mr Alexander's conclusion that defect (iii) was present. Accordingly, with reasonable diligence they could by that route have been aware of having suffered loss by reason of defect (iii) prior to February 1997.[49] Counsel for the defenders referred to Greater Glasgow Health Board v Baxter Clark & Paul 1990 SC 237 with a view to supporting his first contention, namely that if the pursuers were not aware (and could not with reasonable diligence have been aware) of the seepage defect until a time after they were aware (or could with reasonable diligence have been aware) that they had suffered the loss flowing from the other two defects that circumstance would not constitute a reason for postponing the start of the quinquennium. In Greater Glasgow Health Board it was held inter alia that where a party knew he had suffered loss and knew it had been caused by an act, neglect or default but did not know the identity of the wrongdoer, section 11(3) of the Act was not available with a view to postponing the start of the quinquennium and, said counsel, the rule that awareness of loss caused by an act, neglect or default started the running of time even if the identity of the wrongdoer were unknown must similarly apply to different defects where knowledge existed of one of the defects. Thus, he submitted, awareness by the building owner of one defect constituting a breach of duty on the part of the building contractor will start the time running for all defects for which the contractor is responsible.
[50] In my opinion this submission by counsel for the defenders is unsound. In my view Greater Glasgow Health Board v Baxter, Clark and Paul is not concerned with whether, in the case of discrete defects in a building, different periods may apply for each defect notwithstanding that each is a breach of an overriding obligation of proper construction or design. An attempt by senior counsel for Greater Glasgow Health Board to raise the issue of different defects was made in the final speech. Apart from the fact that the point was only sought to be argued in the final speech, the Lord Ordinary stated, 249, line 5, "It does not seem to me ... that what the pursuers are here averring is a multiplicity of causes of action in relation to each of which different considerations may arise, particularly so far as prescription is concerned." In my judgment although a contractual relationship will often contain general provisions such as a general duty of care or a general duty to construct in a workmanlike manner, for the purposes of the running of the five-year prescription it is necessary to identify the particular respect in which the general duty is breached and which leads to the causing of the particular defect in question. In Sinclair v MacDougall Estates 1994 SLT 76 the Lord Ordinary (Maclean) effectively rejected the notion that in a contract such as a building contract breach of a general duty of workmanlike construction by failure A causing defect A should start the time running as respects failure B causing defect B. In Cole v Lonie 2001 SLT 608, the Extra Division stated - "As a matter of law it is quite clear to us that however contractual obligations may be expressed, they can indeed give rise to more than one default giving rise to an obligation to make reparation for loss, injury and damage in terms of the 1973 Act and so, for the purposes of the Act, iniuria occurring at different times. That was clearly recognised in the passage in Sinclair v MacDougall Estates [1994 SLT 76], with which we agree, where Lord MacLean said this: 'It seems to me that it would work considerable injustice for pursuers if a minor failure to design and construct on the part of the defenders, which had come to light earlier, were held to be sufficient to constitute iniuria in relation to a major and different failure to design and construct which was discovered later ...' (1994 SLT, p 82K).". Although on the facts in Sinclair the early defects were in fact relatively minor by comparison with the later emerging defect, it does not appear to me that it should be necessary that the earlier defect be minor or indeed that relative magnitude plays a role. Accordingly, in my opinion, in a contract such as the building contract where there may be a multiplicity of defects each caused by a different specific failure in a general duty such as a duty of care or workmanlike construction the proper approach for the purposes of the quinquennial prescription is to examine each distinct defect and its correlative failure, in construction or design separately. In so saying I recognise that in practice there may be difficulty in determining whether defects, and the correlative failure, are truly distinct and discrete as opposed to being a development or a further emerging example of an existing known defect and its correlative failing. As is concluded by Johnson in his work on Prescription and Limitation, paragraph 2.26, a pragmatic approach may be indicated.
[51] Adopting that approach it nevertheless appears to me that defect (iii) is discrete and distinct and is not simply a development, or a further example, of either defect (i) or (ii). The latter are of course defects in the watertightness of the interface between the perimeter channel and the adjacent floor and outlet pipes respectively whereas the former is a defect in the structure of the tank. Not only are they thus different in location, the defects are also different respecting the nature of the deficiency. The mechanism or failure in the case of defect (iii) namely failure of the waterproof render by reason of the omission of adequate expansion joints in the structures is quite different from the mechanisms involved in the other two defects. The defects also differ in their consequences. Whereas defects (i) and (ii) each result in the gross leakage of water into the duct, the seepage through the tank structure does not contribute materially to the originally perceived problem of the large quantities of water in the duct. As already mentioned, in response to the suggestion from counsel for the defenders that any water seeping through the tank was de minimis Mr Alexander readily agreed that the amount of water coming through by seepage was very small. His concern was not with the small amount of water so contributed to the much larger escape from the absence of proper waterproof in design at the floor slab but with the deleterious effect of the seepage on the reinforcement in the tank structure and hence the ultimate integrity of that structure. In my view the seepage defect is distinct and separate from either of the other two defects and must therefore be considered independently.
[52] It is plain from the evidence that nobody had actual knowledge of the existence of the seepage problem until Mr Alexander conducted his intrusive survey in November 2002. The question then becomes whether as respects this defect the pursuers could with reasonable diligence have discovered its existence prior to February 1997. It was not suggested that the seepage itself produced symptoms which should have been detected prior to that date. The short point put forward by counsel for the defenders was that if the pursuers had diligently investigated the gross leakage of water into the duct they would, in due course, have recovered and studied the drawings (eventually recovered by commission and diligence), noted the lack of appropriate detail in them and Mr Alexander would thereupon have carried out the intrusive survey by which alone the seepage was detected.
[53] While at first sight that answer has attraction, on further reflection and consideration the attraction wanes. I believe that the submission presents difficulties. Inherent in it is the proposition that if a person delays diligent investigation of matter A and the delayed investigation subsequently reveals matter B of which the person was unaware, there has been a failure diligently to investigate B. To take an example, a person suffering from bronchitis may neglect to get early medical attention. The eventual medical attention reveals a symptom free cancer. It appears to me to be difficult properly to say (as the proposition requires) that the person in question did not diligently seek investigation of the cancer, which was all along symptom free, and of which he was not aware. Or one may take the example of a building owner who may be aware of a piece of defective workmanship by a contractor but decide - possibly for financial reasons - not to institute any remedial works. Later, there is a structural failure caused by a defective design on the architect's part, the existence of which would have been disclosed had the owner proceeded with works to remedy the contractor's known defects. Is the architect's obligation to be held to have prescribed because a diligent pursuit of remedial works for a different defect, committed by a different wrongdoer, would have disclosed the architect's failings? Counsel's argument for transferred, or transmitted, want of reasonable diligence would provide a positive answer, but it seems to me that the answer should be otherwise. The building owner had no reason to perceive that his decision to put up with the contractor's bad work would prevent him from having earlier knowledge of the architect's failings. While he cannot, of course, complain that the decision removes his possible claim against the contractor, it would in my view work injustice were his choice to have the unforeseen consequence of depriving him of his claim respecting the different defect in design, whose presence is revealed only on its later manifestation. It is accepted that time does not run as respects a truly latent defect. A physical manifestation giving actual knowledge of the defect or making its existence ascertainable with due diligence is required. In my view where one has distinct defects the necessary physical manifestation must be that relevant to the particular defect in question.
[54] In the present case and looking at defect (iii) as a distinct separate defect, not linked to defects (i) or (ii), which, for the reasons already explained, I consider to be the appropriate approach, there was nothing which would reasonably have alerted the pursuers to the seepage problem, the material consequences of which are the longer term effect on the structural integrity of the pool tank which might otherwise not be manifest until that structural failure. It was not, I think, suggested that as respects this particular defect - seepage - there was any ground upon which the pursuers should have been alerted to its possible existence or its possible long-term pernicious effect on the structure of the tank prior to what was revealed by Mr Alexander's investigation.
[55] As the following considerations demonstrate, a further difficulty with the submission of counsel for the defenders is that in reliance on hindsight it assumes that if defects (i) and (ii) had been investigated earlier the same course of events would have ensued as in fact occurred on the later investigation. Thus, firstly, it is to be noted that Mr Alexander's intrusive investigation followed only after the raising of this action (which initially advanced only claims respecting the two Richmond defects) and after the recovery of documents - particularly drawings - by a commission and diligence. As I understand it, the documentation raised concerns in Mr Alexander's mind, in turn influencing his decision that an intrusive investigation was indicated. However, had the action been raised earlier, at a time when there was no question of prescription of the Richmond defects, it may well be that on the basis of the Richmond report, or an equivalent report from some other source, the action would have been compromised, the defenders having no defence on the merits respecting defects (i) and (ii); there might thus have been no recovery of documents and no intrusive investigation. Secondly, it is not known - and cannot be known - at precisely which point in time the failures in the waterproof render began and, more importantly, at which point in time seepage would have become visible on an intrusive examination such as that carried out by Mr Alexander. The approach of counsel for the defenders of invoking diligence in the investigation of the gross leakage into the duct desiderates action in that respect at the earliest moment - if not in the autumn of 1993, at least by the "knee deep" episode in 1994. But while one cannot place a precise timescale on the visible manifestation of seepage, the understandable tenor of the evidence was that the seepage was a notably longer term phenomenon than the failure of the sealant - or indeed the leak from the absent or defectively installed flanges. Thus it cannot be said that the desiderated diligent investigation of defects (i) and (ii) in late 1993 or 1994 would have revealed any manifestation of seepage, even if an intrusive examination were carried out. Thirdly, the approach advanced by counsel for the defenders assumes the instruction, at a date at which intrusive investigation would reveal seepage, of an expert with the thoroughness of approach adopted by Mr Alexander. But it is not evident that every competent expert would have adopted Mr Alexander's approach and thereby reached his conclusions respecting the existence of the seepage problem. Mr Hutchison, the defenders' expert witness - and the only witness led on behalf of the defenders - did not conduct or seek to conduct any intrusive investigation of tank structure but was content to proceed on the basis of the tests instructed by and reported by Mr Richmond as excluding any defect whatever in the tank structure. So the submission of counsel for the defenders assumes an intensity of investigation and enquiry by experts instructed for the pursuer not necessarily shared by other experts and leading to an opinion not shared by their own experts.
[56] For these reasons I have come to the conclusion that despite its initial attraction, the short answer proffered by the counsel for the defenders respecting prescription of the defenders' obligation in regard to defect (iii) is not sound. In my opinion the evidence demonstrates that the pursuers were unaware of their having suffered loss flowing from defect (iii) prior to a date earlier than five years before the raising of the action in February 2002. Further, in my opinion, on a proper view of the terms of the statute and the evidence led, the pursuers cannot be said to have been capable of being aware, with reasonable diligence, of having suffered loss by reason of that particular defect prior to February 1997.
[57] Accordingly, while I regard the pursuers' claims respecting defects (i) and (ii) to have prescribed, I consider that the seepage defect (defect (iii)) has not prescribed. Questions of quantification of loss were excluded from the scope of this proof before answer and I shall accordingly put the case out by order for further discussion as to the appropriate procedure to be adopted in regard to the quantification of the pursuers' losses stemming from defect (iii) alone.