Absalom (F. R) Ltd v Great Western (London) Garden Village Society Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Warrington of Clyffe,Lord Russell of Killowen,Lord Wright,. |
| Judgment Date | 15 June 1933 |
| Judgment citation (vLex) | [1933] UKHL J0615-1 |
| Date | 15 June 1933 |
| Court | House of Lords |
[1933] UKHL J0303-1
Lord Buckmaster.
Lord Warrington of Clyffe.
Lord Tomlin.
Lord Russell of Killowen.
Lord Wright.
House of Lords
After hearing Counsel on Thursday, the 16th day of February last, upon the Petition and Appeal of F. R. Absalom Limited of 101, Erith Road, Belvedere, in the County of Kent, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 20th June 1932, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of The Great Western (London) Garden Village Society, Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 20th day of June 1932, and the Order of the King's Bench Division of the High Court of Justice, of the 24th day of May 1932, thereby set aside, complained of in the said Appeal, be, and the same are hereby, Discharged, and that the Cause be, and the same is hereby, Remitted back to the Arbitrator with a Direction to reconsider the Award and to amend the same so as to bring it into consonance with Condition 30 of the Contract between the parties, dated the 14th day of November 1928, as construed by this House, and to award costs accordingly; And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Courts below, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments.
My Lords,
This is an Appeal from an Order of the Court of Appeal (Scrutton and Greer, L.J.J.) dated the 20th June, 1932, reversing an order of the K.B. Division (Swift and Macnaghten, J.J.) dated the 24th May, 1932, whereby it was ordered that the Award of an Arbitrator be remitted to him for reconsideration.
The question in the present Appeal is whether the Award is bad by reason of error in law appearing on the face of it. This involves the further question whether the question of law decided by the Arbitrator was specifically referred to him for his decision or was only one which necessarily arose in applying ascertained facts to the terms of the contract.
The material facts may be shortly stated:—By a contract in writing dated the 11th November, 1928, and made between the Respondents (therein and hereinafter referred to as "the employer") of the one part and the Appellants (therein and hereinafter referred to as "the contractor") of the other part the contractor agreed to erect for the employer certain houses at Hayes in the county of Middlesex—one T. Alwyn Lloyd was nominated as architect to the employer.
The contract contained the following material provisions:—
"Clause 26: If the contractor except … in case of a certificate being withheld or not paid when due shall suspend the work … the architect shall have power to give notice in writing to the contractor requiring that the work be proceeded with in a reasonable manner and with all reasonable despatch."
….
"Clause 30: The contractor shall be entitled upon the valuation of the surveyor and under certificates to be issued by the architect to the contractor and within 14 days of the date of each certificate to payment by the employer from time to time by instalments when in the opinion of the architect actual work to the value of £1,000 has been executed in accordance with the contract at the rate of 90 per cent. of the value of the work so executed in the building and materials actually on the site for use on the works until the balance in hand amounts to the sum of £2,000."
The remainder of this clause is not material to the present question.
"Clause 32: Provided always that in case any dispute or difference shall arise between the employer or the architect on his behalf and the contractor … as to the construction of the contract or … as to the withholding by the architect of any certificate to which the contractor may claim to be entitled then either party shall forthwith give to the other notice of such dispute or difference and such dispute or difference shall be and is hereby referred to the arbitration and final decision of a person to be appointed" as in the contract mentioned, "and the Award shall be final and binding on the parties."
It was expressly provided that the arbitrator could have power to open up, review or revise any Certificates.
In the summer of 1929 disputes arose between the employer and the contractor and a notice of such disputes was given by the contractor to the employer—no copy of this notice has been produced, but there is no question that it was duly given and one Mr. Elgood was appointed as arbitrator. Mr. Elgood directed the parties to deliver to each other their respective claims for the purpose of formulating the dispute.
These were duly delivered—that of the contractors on the 11th October, 1929, and that of the employer on the 12th November, 1929. I refer to the pleadings, as I think I am entitled to do, solely for the purpose of ascertaining whether any specific question of law was in dispute, and was referred to the Arbitrator for his decision.
From the pleadings it is abundantly clear that the whole dispute between the parties was as to the amount due to the contractor in respect of the value of the work done and of the materials on the site up to and including the 11th March, 1929, the contractor claiming that the architect should have given certificates for £11,125 1s. 11d. gross instead of for £10,482, and the employer asserting that the certificates actually given were for an excessive amount and that the contractor had been overpaid.
It should be here mentioned that the balance of the £10,482, after deducting £1,048 for retention money, viz., £9,434, was paid to the contractor. On the 15th March, 1929, the contractor suspended work on the ground that a certificate for the proper amount had been withheld or not paid and on the 16th March, the employer retaliated by a notice under Clause 26. The validity or invalidity of this notice depended entirely on the point raised by the several claims mentioned above. If the contractor was right on his figures a certificate had been withheld and the amount due had not been paid and the employer had no right to give the notice under Clause 26. In my opinion no specific question of construction arose; the validity or invalidity of the notice resulted from a decision as to the figures and the application of such decision to the provisions of the contract.
The arbitrator made his Award dated the 19th December, 1931. After reciting the terms of Clause 32 of the contract and stating that disputes arose in regard to (1) the issue of certificates and (2) the validity of the notice under Clause 26 he proceeds to award (1) that the value of the work executed and the materials on the site for use on the works up to and including the 11th March, 1929, amounted to £11,364 6s. 6d. and that the net value for certification on that date, after deducting £1,136 8s. 8d. the 10 per cent. retention money, amounted to £10,227 17s. 10d.; (2) that the total amounts of certificates by the architect for payments on account up to and including the 11th March, 1929, amounted to £9,434.
That is to say he found that the amount of the certificates actually issued up to and including the 11th March, 1929, fell short of the proper amount by £793 17s. 10d., and it was in my opinion his obvious duty to revise the defective certificate in accordance with his finding. He, however, did not do this, but by paragraph 3 he awarded that having regard to the provisions of Clause 30 as to the title of the contractor to be paid by instalments when in the opinion of the architect actual work to the value of £1,000 had been executed in accordance with the contract, the architect had up to the 11th March, 1929, issued to the contractor certificates in accordance with the terms of the contract. Further, as apparently the result of this last finding, he awarded (paragraph 4) that having regard to the fact that the contractor suspended work on the 15th March, 1929, the notice of the 16th March, 1929, under Clause 26 was properly given and was valid. He then awarded that the contractor should pay the costs of the reference.
With all respect to the architect and to the learned Judges in the Court of Appeal, I am at a loss to understand how he arrived at his conclusion in paragraph 3. Even if the effect of the provision as to the £1,000 is that it applies every time a new certificate is applied for, it could not apply to the present case in which there is no question of the issue of a new certificate for a fresh period but merely of the revision of one already issued for a period then expired in order to make it conform to the figures already ascertained.
In my opinion no such question as that answered by paragraph 3 was specifically submitted to the arbitrator for his decision. At most it was incidentally involved in the general question as to the validity of the notice purporting to have been given under Clause 26. In such a case I am satisfied on the authorities the award may be set aside if there be error on its face. The arbitrator has referred to the clause and thus in my opinion has incorporated it in the Award, so...
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