Aer Lingus v Gildacroft Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE SIMON |
| Judgment Date | 24 June 2005 |
| Neutral Citation | [2005] EWHC 1556 (QB) |
| Court | Queen's Bench Division |
| Date | 24 June 2005 |
| Docket Number | Case No: 4UB00528 |
[2005] EWHC 1556 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice Simon
Case No: 4UB00528
MR M PORTER (instructed by Beachcroft Wansbrough) appeared on behalf of the CLAIMANT.
MR J HARVEY (instructed by Kennedys) appeared on behalf of the FIRST DEFENDANT.
MR A HEATHCOTE-WILLIAMS appeared on behalf of the SECOND DEFENDANT.
: This is the trial of a preliminary issue as to whether the two-year limitation period for contribution proceedings, as set out in section 10 of the Limitation At 1980, runs from the date of a judgment on liability with damages to be assessed, or from the date of the subsequent assessment. Somewhat surprisingly, there appears to be no authority directly on the point.
The facts of the case can be stated shortly. On 27 th January 1998 William Smythe was badly injured while working for the claimants, Aerlingus. A document lift supplied and installed by the first and second defendants malfunctioned when Mr Smythe had his hand in it. Without warning and at high speed the lift ascended, trapping his left wrist.
On 9 th May 2001 Mr Smythe obtained a judgment against Aerlingus for damages to be assessed. By an agreement embodied in the consent order of 3 rd October 2003 damages were assessed in the sum of £490,000 with Aerlingus agreeing to pay Mr Smythe's costs.
On 4 th February 2004 Aerlingus commenced claims against the first and second defendants under the provisions of the Civil Liability (Contribution) Act 1978. Both defendants pleaded a limitation defence. If time runs from the date on which judgment on liability is entered, as the defendants contend, then the two-year limitation period expired prior to the bringing of the contribution proceedings. If the time runs from the date on which damages were assessed, as Aerlingus contend, the limitation period had not expired.
The relevant statutory provisions
Section 1 of the Civil Liability (Contribution) Act 1978 provides:
"(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
(2) A person shall be entitled to recover contribution by virtue of subsection (1) above notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, provided that he was so liable immediately before he made or was ordered or agreed to make the payment in respect of which the contribution is sought.
…(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.
(5) A judgment given in any action brought in any part of the United Kingdom by or on behalf of the person who suffered the damage in question against any person from whom contribution is sought under this section shall be conclusive in the proceedings for contribution as to any issue determined by that judgment in favour of the person from whom the contribution is sought."
Section 10 of the Limitation Act 1980 provides:
"(1) Where under section 1 of the Civil Liability (Contribution) Act 1978 any person becomes entitled to a right to recover contribution in respect of any damage from any other person, no action to recover contribution by virtue of that right shall be brought after the expiration of two years from the date on which that right accrued.
(2) For the purposes of this section the date on which a right to recover contribution in respect of any damage accrues to any person (referred to below in this section as 'the relevant date') shall be ascertained as provided in subsections (3) and (4) below.
(3) If the person in question is held liable in respect of that damage—
(a) by a judgment given in any civil proceedings; or
(b) by an award made on any arbitration;
The relevant date shall be the date on which the judgment is given, or the date of the award (as the case may be).
For the purposes of this subsection no account shall be taken of any judgment or award given or made on appeal in so far as it varies the amount of damages awarded against the person in question.
(4) If, in any case not within subsection (3) above, the person in question makes or agrees to make any payment to one or more persons in compensation for that damage (whether he admits any liability in respect of the damage or not), the relevant date shall be the earliest date on which the amount to be paid by him is agreed between him (or his representative) and the person (or each of the persons, as the case may be) to whom the payment is to be made."
Before turning to the detailed arguments on construction, it is convenient to note the following points.
(1) At common law there was no statutory right of contribution between joint tortfeasors – see Merryweather v Nixon (1799) 8 Durn & E 186. A statutory right to such contribution was introduced by section 6 of the Law Reform (Married Women and Tortfeasors) Act 1935. That section provided:
"(1) Where damage is suffered by any person as a result of a tort…
(c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor."
It is in this section that the concept of "damage" as a trigger for the right for contribution was first introduced. The 1935 Act did not provide for any time limit for the bringing of a contribution claim. Views diverged as to whether the cause of action accrued at the date of the accident or the date when the judgment was entered against the tortfeasor claiming contribution – see the analysis of Lord Porter in George Wimpey & Co Limited v BOAC [1955] AC 169 at 182. In the George Wimpey case Viscount Simonds at page 177 assumed, although there had been no argument on the point, that it was the judgment date and that the relevant judgment was a judgment on quantum:
"I am content to assume that the right to contribution arose at any rate not earlier than the date when the existence and amount of Wimpeys' liability…was ascertained by judgment and that the relevant period of limitation was six years."
The case is of limited authority on the present issue since the basis of the decision of the majority was that the claimant was not entitled to a contribution against BOAC because it was a public authority which had a defence to any claim not brought within one year from the date of the original accident under section 21(1) of the Limitation Act 1939. The question of the time by which contribution proceedings must be brought under section 6(1)(c) was resolved by section 4 of the Limitation Act 1963. Section 4(1) provided:
"Where under section 6 of the Law Reform (Married Women and Tortfeasors) Act 1935 a tortfeasor…becomes entitled after the passing of this Act to a right to recover contribution in respect of any damage from another tortfeasor, no action to recover contribution by virtue of that right shall…be brought after the end of the period of two years from the date on which that right accrued to the first tortfeasor."
Section 4(2) introduced words in a form similar to those used later in section 10(3) and (4) of the 1980 Limitation Act. In 1978 the Civil Liability (Contribution) Act was passed so as to enable a defendant to claim contribution from another who was liable to a plaintiff for breach of contract, breach of trust, or other breach of duty, and not merely (as before) a joint tortfeasor. Paragraph 6 of Schedule 1 of the 1978 Act introduced a new section 4 of the Limitation Act 1963 to take into account the change. Again it was in words similar to those used later in section 10(3) and (4) of the 1980 Limitation Act.
(2) An historical analysis of the relevant statutory provisions helps to put into context observations made in some of the earlier cases.
(3) One feature of the statutory history is the reiteration of the word "damage". This is to be found in both the 1978 Civil Liability (Contribution) Act (see also section 6) and the 1980 Limitation Act. The House of Lords in Royal Brompton Hospital NHS Trust v Hammond & Others (Taylor Woodrow Construction (Holdings) Limited, Part 20 defendant) [2002] 1WLR 1397 considered the meaning of the word "damage" in the context of the expression "same damage" in the 1978 Act. In that case the issue was whether two parties were...
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