Adjudication – Award – Limitation of action – Dispute arising between parties to building in respect of asbestos survey – Arbitrator making award in favour of defendant in lesser sum than claimed – Parties claiming and counterclaiming for final determination of dispute – Whether contract containing implied term that unsuccessful party entitled to final determination of dispute by litigation – Whether claim being barred by limitation – Claim and counter-claim dismissed
The claimant was a company which specialised in the provision of asbestos management services including asbestos surveys. The defendant was a construction company specialising in the construction and refurbishment of community housing, education and healthcare properties. In March 2004, the claimant carried out an asbestos survey at a housing estate pursuant to a contract entered into between the parties. In February 2005, it was alleged that additional material containing asbestos had been discovered in the apartment blocks at the estate and the defendant complained that the claimant had failed to pick up its presence. In June 2009, the defendant referred the dispute to arbitration. The adjudicator found that the claimant was in breach of contract and that there were damages which together with interest produced a substantial award in favour of the defendant, albeit some £200,000 less than was being claimed. The claimant subsequently made a payment to the defendant in compliance with the adjudicator’s award.
In February 2012, the claimant commenced proceedings, seeking a final and binding resolution of the dispute and a declaration that it was not liable to pay damages and/or interest to the defendant in the amount decided by the adjudicator or at all. It sought repayment, or alternatively restitution. The defendant counterclaimed for the difference between the sum claimed as damages in the adjudication and the lower sum awarded by the adjudicator.
The proceedings gave rise to issues including: (i) whether the contract between the parties contained an implied term that an unsuccessful party in an adjudication was entitled to have the dispute determined by litigation; and (ii) as to when in terms of limitation of action a party which was dissatisfied with the substance of an adjudicator’s decision needed to issue its proceedings or to raise any counterclaim to challenge and seek to overturn that decision.
Held: The claim and the counter-claim were dismissed.
(2) When it came to interpretation of statute, there was little recognisable authority for an implied term of a statute. Statutes and statutory instruments were to be interpreted primarily from the words used on the basis that Parliament could or should be taken to have meant that the words which had been brought into law broadly mean what they said. Where it was unclear what Parliament meant, the courts could have regard to a purposive approach, along the lines of finding a meaning from the stated purposes and, in certain circumstances, regard could be had to the debates in Parliament to help determine what Parliament intended: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; (1978) 52 AJLR 20 applied.
In the present case, the contract between the parties was simple, comprising a quotation by the claimant to carry out an asbestos survey at a particular site for a particular price which was orally accepted. Both parties had accepted that they had a construction contract for the purposes of the Housing Grants, Construction and Regeneration Act 1996. It followed that, because the parties did not make their own contractual provisions for adjudication, the impact of section 108 (5) of the 1996 Act was to incorporate the adjudication provisions of the scheme for construction contracts. It was clear that Parliament and the drafters of the scheme had not actually applied their minds to whether or not a new cause of action arose for either party following the observance of a valid adjudicator’s decision as regards the recovery in later proceedings of a court or arbitrator charged with the final resolution of disputes between the parties. There was nothing in the Parliamentary debates to suggest that Parliament had meant in effect to create in every construction contract incorporating the scheme an implied term such as that suggested by the claimant. There was no overriding policy reason why such a term should be implied: Attorney-General of Belize v Belize Telecom Ltd [2009] UKPC 10 considered; Jim Ennis Construction Ltd v Premier Asphalt Ltd [2009] EWHC 1906 (TCC); [2009] 3 EGLR 7, [2009] 41 EG 116 distinguished.
(2) A party to a commercial contract had a cause of action to seek a negative declaration that it was not in breach of contract, albeit that the court retained discretion whether to grant such a declaration. The cause of action for a negative declaration was in contract and tort and the limitation period or a cause of action based on a contract not under seal was six years from the latest date when the contract was performed because there could be no breach after performance, at least for a simple contract. In the present case, the claimant had a cause of action in effect for a negative declaration that it was not in breach of its contractual or tortious duty of care as from the time that it provided its report in April 2004. Accordingly, there was no implied term as pleaded and the essential claimed cause of action relied upon by the claimant was barred by limitation. There was no separate cause of action in restitution. It followed that the defendant’s counterclaim for the balance of its loss was also barred by limitation: Kleinwort Benson v South Tyneside Metropolitan Borough Council [1994] 4 All ER 972 and Messier-Dowty v Sabena [2000] 1 WLR 2040 considered.
Fiona Sinclair QC (instructed by Mills & Reeve LLP) appeared for the claimant; Isabel Hitching (instructed by Silver Shemmings LLP) appeared for the defendant.
Eileen O’Grady, barrister
Aspect Contracts (Asbestos) Ltd v Higgins Construction plc
Adjudication – Award – Limitation of action – Dispute arising between parties to building in respect of asbestos survey – Arbitrator making award in favour of defendant in lesser sum than claimed – Parties claiming and counterclaiming for final determination of dispute – Whether contract containing implied term that unsuccessful party entitled to final determination of dispute by litigation – Whether claim being barred by limitation – Claim and counter-claim dismissedThe claimant was a company which specialised in the provision of asbestos management services including asbestos surveys. The defendant was a construction company specialising in the construction and refurbishment of community housing, education and healthcare properties. In March 2004, the claimant carried out an asbestos survey at a housing estate pursuant to a contract entered into between the parties. In February 2005, it was alleged that additional material containing asbestos had been discovered in the apartment blocks at the estate and the defendant complained that the claimant had failed to pick up its presence. In June 2009, the defendant referred the dispute to arbitration. The adjudicator found that the claimant was in breach of contract and that there were damages which together with interest produced a substantial award in favour of the defendant, albeit some £200,000 less than was being claimed. The claimant subsequently made a payment to the defendant in compliance with the adjudicator’s award.In February 2012, the claimant commenced proceedings, seeking a final and binding resolution of the dispute and a declaration that it was not liable to pay damages and/or interest to the defendant in the amount decided by the adjudicator or at all. It sought repayment, or alternatively restitution. The defendant counterclaimed for the difference between the sum claimed as damages in the adjudication and the lower sum awarded by the adjudicator.The proceedings gave rise to issues including: (i) whether the contract between the parties contained an implied term that an unsuccessful party in an adjudication was entitled to have the dispute determined by litigation; and (ii) as to when in terms of limitation of action a party which was dissatisfied with the substance of an adjudicator’s decision needed to issue its proceedings or to raise any counterclaim to challenge and seek to overturn that decision.Held: The claim and the counter-claim were dismissed. (2) When it came to interpretation of statute, there was little recognisable authority for an implied term of a statute. Statutes and statutory instruments were to be interpreted primarily from the words used on the basis that Parliament could or should be taken to have meant that the words which had been brought into law broadly mean what they said. Where it was unclear what Parliament meant, the courts could have regard to a purposive approach, along the lines of finding a meaning from the stated purposes and, in certain circumstances, regard could be had to the debates in Parliament to help determine what Parliament intended: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; (1978) 52 AJLR 20 applied. In the present case, the contract between the parties was simple, comprising a quotation by the claimant to carry out an asbestos survey at a particular site for a particular price which was orally accepted. Both parties had accepted that they had a construction contract for the purposes of the Housing Grants, Construction and Regeneration Act 1996. It followed that, because the parties did not make their own contractual provisions for adjudication, the impact of section 108 (5) of the 1996 Act was to incorporate the adjudication provisions of the scheme for construction contracts. It was clear that Parliament and the drafters of the scheme had not actually applied their minds to whether or not a new cause of action arose for either party following the observance of a valid adjudicator’s decision as regards the recovery in later proceedings of a court or arbitrator charged with the final resolution of disputes between the parties. There was nothing in the Parliamentary debates to suggest that Parliament had meant in effect to create in every construction contract incorporating the scheme an implied term such as that suggested by the claimant. There was no overriding policy reason why such a term should be implied: Attorney-General of Belize v Belize Telecom Ltd [2009] UKPC 10 considered; Jim Ennis Construction Ltd v Premier Asphalt Ltd [2009] EWHC 1906 (TCC); [2009] 3 EGLR 7, [2009] 41 EG 116 distinguished.(2) A party to a commercial contract had a cause of action to seek a negative declaration that it was not in breach of contract, albeit that the court retained discretion whether to grant such a declaration. The cause of action for a negative declaration was in contract and tort and the limitation period or a cause of action based on a contract not under seal was six years from the latest date when the contract was performed because there could be no breach after performance, at least for a simple contract. In the present case, the claimant had a cause of action in effect for a negative declaration that it was not in breach of its contractual or tortious duty of care as from the time that it provided its report in April 2004. Accordingly, there was no implied term as pleaded and the essential claimed cause of action relied upon by the claimant was barred by limitation. There was no separate cause of action in restitution. It followed that the defendant’s counterclaim for the balance of its loss was also barred by limitation: Kleinwort Benson v South Tyneside Metropolitan Borough Council [1994] 4 All ER 972 and Messier-Dowty v Sabena [2000] 1 WLR 2040 considered.Fiona Sinclair QC (instructed by Mills & Reeve LLP) appeared for the claimant; Isabel Hitching (instructed by Silver Shemmings LLP) appeared for the defendant.Eileen O’Grady, barrister
