B R Cantrell and E P Cantrell v Wright & Fuller Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 30 July 2003 |
| Neutral Citation | [2003] EWHC 1545 (TCC) |
| Docket Number | Case Number: HT 03/121 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 30 July 2003 |
[2003] EWHC 1545 (TCC)
His Honour Judge Thornton Q.c
In The Matter Of The Arbitration Act 1996 And In The Matter Of An Arbitration
Case Number: HT 03/121
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Mr Cantrell of Sunflower Farm Barn, Laxfield, Woodbridge, Suffolk, 1P13 8HP appeared on his own behalf and on behalf of Mrs Cantrell with the assistance of McKenzie Friend, Mr B G French, Solicitor, Blocks, Arcade Chambers, 2–6 Arcade Street, Ipswich, Suffolk, IP1 1EL, DX: 3207 Ipswich, Ref: BGF/vkl/Can019-l.
Mr Darryl Royce appeared for the respondent instructed by Jackaman Smith & Mulley, Oak House, Northgate Street, Ipswich, Suffolk, IP1 3BX, DX: 3229 Ipswich, Suffolk, IP1 3BX (Ref: PBS/CJC/1W669–1) appeared for the respondent.
Date of Hearing: 6 June and 4 July 2003
SUBJECT MATTER
Validity of Final Certificate issued outside time limits provided for by contract, clauses 30.8 and 30.9 of the JCT Standard Form of Contract, 1980 edition, construction of conclusive evidence clauses and the Final Certificate, application of Penwith District Council v VP Developments Ltd.
DECISION
The appeal is allowed, the certificate was not the Final Certificate in form, substance or intent.
This judgment was made in writing and was handed down by the court. For the purposes of paragraph 5.12 of 52PD-19 (Practice Direction —Appeals), this written judgment is to be taken as replacing an official recording and approved transcript of the judgment.
INDEX
| Section | Subject Matter | Paragraph |
| 1. | Introduction | 1–9 |
| 2. | Background Facts Submissions of Parties, | 10–30 |
| 3. | Award and Questions of Law being Appealed | 31–78 |
| 3.1 | Dispute | 31–32 |
| 3.2 | Issues in the Arbitration | 33–34 |
| 3.3 | Submission of Parties —Issues 1 and 2 in the Arbitration | 35–41 |
| 3.3.1 | Claimants' Submissions in the Arbitration | 35–38 |
| 3.3.2 | Respondent's Submissions in the Arbitration | 39 |
| 3.3.3 | Submissions as to the Form of the Certificate | 40–41 |
| 3.4 | Scope of the Award | 42–49 |
| 3.5 | Award | 50–52 |
| 3.6 | Claimants' Grounds of Appeal | 53–59 |
| 3.7 | Respondent's Rely | 60–62 |
| 3.8 | Questions of Law for Determination in the Appeal | 63–78 |
| 3.8.1 | Difficulties Confronting the Court in Hearing the Appeal | 63 |
| 3.8.2 | Questions of Law | 64–68 |
| 3.8.3 | Respondent's Objections | 69–73 |
| 3.8.4 | Conclusion —Question of Law Arising on the Appeal | 74–78 |
| 4. | Contract Conditions | 79–94 |
| 4.1 | Introduction | 79–82 |
| 4.2 | Form, Substance and Intent of a Valid Final Certificate | 83–93 |
| 4.3 | Relevant Conditions —JCT 80 | 94 |
| 5. | JCT Final Certificate —General Considerations | 95–132 |
| 5.1 | Introduction | 95–96 |
| 5.2 | Role of Architect or Certifier | 97–100 |
| 5.3 | Time Limits | 101–117 |
| 5.4 | Agreement and Acquiescence in Delaying Issue of Certificates | 118–123 |
| 5.5 | Implication Associated with Late Issue of Certificates | 124–129 |
| 5.6 | Conditions Precedent to Issue of Certificates | 130–132 |
| 6. | Meaning and Effect of Clause 30.8 | 133–162 |
| 6.1 | Introduction | 133 |
| 6.2 | Clause 30.8 in its Contractual Context | 134–138 |
| 6.3 | What Conditions Precedent are Imposed by Clause 30.8 | 139–157 |
| 6.3.1 | Introduction | 139 |
| 6.3.2 | Certificate of Making Good Defects | 140–143 |
| 6.3.3 | Clause 30.6.1.2 Documentation | 144–146 |
| 6.3.4 | Adjustment of Contract Sum | 147–148 |
| 6.3.5 | Clause 30.7 —Nominated Sub-Contractors | 149–153 |
| 6.3.6 | Clauses 24.1 and 25.3 —Delayed Completion and Extension of Time | 154–156 |
| 6.3.7. | Condition Precedent and Implied Term | 157 |
| 7. | Questions of Law to be Decided in this Appeal | 163–203 |
| 7.1 | Introduction | 163 |
| 7.2 | Erroneous Approach of Parties | 164–172 |
| 7.2.1 | Introduction | 164–165 |
| 7.2.2 | Form | 166–167 |
| 7.2.3 | Substance | 168–170 |
| 7.2.4 | Intent | 171–172 |
| 7.3 | Question 1 —Where the Arbitrator's Answers to Issues 1 and 2 Correct in Law? | 173–197 |
| 7.3.1 | Arbitrator's Reasoning —Substance | 173–178 |
| 7.3.2 | Arbitrator's Errors —Substance | 179–186 |
| 7.3.3 | Corrected Reasoning —Substance | 187–188 |
| 7.3.4 | Arbitrator's Reasoning —Form | 189–190 |
| 7.3.5 | Arbitrator's Errors —Form | 191–194 |
| 7.3.6 | Corrected Reasoning —Form | 195 |
| 7.3.7 | Arbitrator's Errors —Intent | 196–197 |
| 7.4 | Question 1 —Conclusion | 198 |
| 7.5 | Question 2 —What is the Correct Answer to Issues 1 and 2? | 199–203 |
INTRODUCTION
This is an appeal brought under section 69(1) of the Arbitration Act 1996 from the award of an Arbitrator, Professor Mark Cato. The appeal on the questions of law arising out of the award on certain preliminary issues answered by the arbitrator is brought without leave since the contract, in the JCT standard form, 1980 edition, contains a provision, in clause 41.6.1, which satisfies the statutory requirement that leave to appeal is not required. This consequence of the combined effect of section 69(1) of the Arbitration Act 1996 and clause 41.6.1 of the JCT Conditions accords with a long line of authorities including How Engineering & Services Ltd v Lindner Ceiling and Floors Plc, unreported, 17 May 1995, Judge Thornton QC; Panatown Ltd v Alfred McAlpine Ltd 58 Con LR 46, Judge Thornton QC; Vatcroft (Contractors) Ltd v Seeboard Plc, 78 BLR 138, Judge Lloyd QC, Taylor Woodrow Civil Engineering Ltd v Hutchinson Development Ltd (1999) ADRLJ 83, Clarke J, Fence Gate Limited v NEL Construction Limited, 82 Con LR 41, Judge Thornton QC and Robin Ellis Ltd v Vinexsa International Ltd [2003] EWHC 1352 TCC, unreported, 13 June 2003, Judge Thornton QC.
The appeal arises out of a contract between the claimants, as employers, and the respondent, as contractors, that incorporated the JCT Standard Conditions of Contract, 1980 edition. This contract, entered into on 1 April 1997, provided for the construction of phase one of a new extension, being an Elderly Mental Institution unit, for the claimants who own and operate a nursing home at Saxted, near Woodbridge, in Suffolk. The contract Works achieved Practical Completion on 23 February 1998, the Defects Liability Period expired on 23 August 1998, a document relied on by the respondent as being the Final Certificate was issued on 29 March 1999 and a notice of arbitration was served by the respondent on 1 May 2002. Professor Cato was then appointed as arbitrator by the RIBA, the nominating body named in the contract.
The disputes referred to arbitration involve claims by the respondent for the unpaid balance of the sum certified as due and claims by the claimants that the Adjusted Contract Sum certified by the architect was erroneous, that alleged over payments to the respondent should be repaid, for both direct and consequential damages arising out of defects in the works and for liquidated damages for delayed completion.
Underlying these disputes is a major dispute between the parties as to whether the Final Certificate had validly been issued under clause 30.8 in a manner and form which brought clause 30.9 into effect so as to provide that certain matters are to be regarded in any subsequent proceedings as having been conclusively proved. The respondent contends that a valid and effective Final Certificate was issued with the result that the claimants' claims can no longer be pursued and that the effective defences to its own claims have been eliminated or significantly diminished. In consequence, without any pleadings having been served and with no precise definition of issues having being agreed, the arbitrator, with the consent of the parties, directed that he would determine as preliminary issues five items: "as broadly set out in the [respondent's] skeleton submission dated 25 November 2002 to be amended as agreed by counsel", to quote from his Order no 2 dated 27 November 2002. In his award he stated that the parties had agreed that these issues, if determined as preliminary issues, would result in a saving of costs and time.
The parties subsequently agreed that there were two issues that should be determined in this way which were:
"1. Whether or not the certificate issued by the architect on 29 March 1999 was validly issued in accordance with clause 30.8 of the contract conditions.
2. Whether or not the certificate issued by the architect on 29 March 1999 is the final certificate for the purpose of clause 30.9 of the contract conditions."
The parties had also agreed that five further issues should be decided relating to the effect of the Final Certificate, if it be one, on various aspects of the claimants' claims and defences. However, during the hearing of the preliminary issues, the parties agreed what the relevant effects of the Final Certificate would be if the arbitrator found that the certificate in question was the Final Certificate and a consent award was made in relation to those further issues.
The parties did not agree what factual background should be assumed by the arbitrator in answering these two issues and no oral evidence was adduced. However, pursuant to his direction, an agreed bundle of documents was placed before him for use at the hearing. The parties agreed the arbitrator could refer to these documents as evidence. The parties also put before the arbitrator an agreed chronology.
The parties placed before me, in addition to the arbitrator's award dated 16 March 2003, the additional documents that had been placed before the arbitrator. These included the entire contract Conditions, the written submissions of the parties submitted to the arbitrator, the relevant certificates and some of the correspondence passing between the parties prior and subsequent to the issue of...
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