Defects in house–Requirements of National House-Builders’ Registration Council–Whether second arbitration is excluded by rule of res judicata–Whether house-owners are estopped from claiming for new defects after original ones have been the subject of an arbitration–Declaration in favour of house-owners
This was a
special case by an arbitrator in an arbitration in which the builders of a
house, Purser & Co (Hillingdon) Ltd, claimed that the purchasers, Mr and
Mrs George Henry Jackson, of 36 West Park, The Parks Estate, Minehead,
Somerset, were estopped from seeking compensation for newly-discovered defects
in the house after they had been awarded £105 for original defects in an
arbitration award of 1972. The builders maintained that all the defects had
been, or should have been, before the original arbitration and that the matter
was now res judicata on the ground that where a competent tribunal had
decided on an issue between two parties neither of them could raise it again.
The purchasers, the builders contended, should not be allowed a second
arbitration.
John Dyson
(instructed by Gordon Dadds & Co) appeared for the builders; Alastair R
MacGregor (instructed by Lewis Silkin & Partners, agents for Bowmans, of
Minehead) represented the purchasers.
Giving
judgment, FORBES J said that the National House-Builders’ Registration Council
scheme applied to the contract. If there were defects in the construction of
the building they were to be made good by the builder, subject to certain
conditions. Any dispute could be referred to arbitration. Defects did occur and
the purchasers were awarded £105 in an arbitration. After that, roof defects
were claimed and the claimants applied for the appointment of an arbitrator to
decide whether they were the result of non-compliance with National Council
standards. He claimed that they had not been considered in the previous
arbitration.
Mr Dyson, for
the builders, had cited Conquer v Boot [1928] 2 KB 336. The facts
there were not dissimilar. The Divisional Court ruled that the cause of action,
breach of contract, was the same in two actions. As the issue had been decided
in the first action it was then res judicata and the plaintiff could not
claim damages in a second action. This was a binding decision so far as it
related to causes of action. There appeared, however, to be no direct authority
that this rule applied to arbitrations as well as causes of action. Conquer
v Boot was said by Mr Dyson to be based on the maxim inter est
republicae ut sit finis litium (it concerns the state that lawsuits should
not be protracted). But arbitration was a private matter and there was not the
same pressing need to ensure that arbitrators should not be troubled more than
once as there was in the case of judges.
He (his
Lordship) was not willing to extend the draconian rule of Conquer v Boot
and there appeared to be no authority to make him do so.
It was clear
from the terms of the contract that the parties intended serial arbitrations.
Defects in the building might arise from time to time and this meant that there
could be arbitration from time to time. There would be no estoppel per rem
judicatam to the raising on a subsequent occasion of a defect which was not
covered by the first arbitration. The purchasers were not to be debarred from
claiming relief in respect of breaches not included in the terms of reference
of the first arbitration. There would be a declaration to that effect and the
respondents would pay the claimants’ costs.
