Crown Estate Commissioners v John Mowlem & Company Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STUART-SMITH,SIR JOHN MEGAW,LORD JUSTICE RUSSELL |
| Judgment Date | 29 July 1994 |
| Judgment citation (vLex) | [1994] EWCA Civ J0729-2 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | QBENI 93/1837/B |
| Date | 29 July 1994 |
[1994] EWCA Civ J0729-2
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
OFFICIAL REFEREES' BUSINESS
(His Honour Judge Fox-Andrews)
Before: Lord Justice Russell Lord Justice Stuart-Smith Sir John Megaw
QBENI 93/1837/B
MR. R SEYMOUR QC (Instructed by Messrs. Rowe & Maw, London EC4V 6HD) appeared on behalf of the Appellant
MR. J MARRIN QC (Instructed by Messrs. Speechly Bircham, London EC4) appeared on behalf of the Respondent
( )
Friday, 29 July 1994
The issues
This appeal from a judgment of His Honour Judge Fox-Andrews QC, sitting as an official referee, and given on 10 December 1993, raises two questions of general importance in relation to clause 30.9 of the Standard Form of Building Contract (1980 Edition) issued by the Joint Contracts Tribunal, Private with Quantities edition ("the Standard Form"). They are these:
1. Is there power under the Arbitration Act 1950, s. 27 to extend time under clause 30.9.3 which, as amended, relates to the effect of the final certificate in relation to arbitration proceedings which have not been commenced within 28 days of its issue? The Judge answered this question in the affirmative.
2. On the proper construction of clause 30.9.1.1, is the final certificate conclusive evidence (in the absence of arbitration proceedings being commenced before or within 28 days of its issue) that only those materials and workmanship which are expressly required by the contract to be of a standard and quality which reasonably satisfies the architect are to that quality and standard, as the Judge held? Or does it extend to all works in respect of which, under the various provisions of the contract, the architect is required to form an opinion as to whether or not they comply with the contract requirements as to quality of materials and standards of workmanship?
The background to the dispute
The Plaintiffs entered into a contract with the Defendants in the Standard Form dated 29 February 1988. The Defendants agreed to construct a commercial development of retail and commercial units, offices, a penthouse flat and a restaurant on the site of the former Kensington Palace Barracks for a sum of £9m. The architects were Building Design Partnership ("BDP"). On 2.12.92 the final certificate was issued. For some time prior to this, problems had arisen in relation to the glazing, slates and courtyard paving. In particular WEA Records Ltd., tenants of the Plaintiffs, had been complaining about the glazing. On 6 April 1993 the Plaintiffs' solicitors gave notice of reference to arbitration. They listed ten defects in respect of which it was said there was a dispute. In fact, the notice was given to the Defendants' subsidiary company and was not corrected until some time later, but nothing now turns on this. The notice was well outside the 28 days provided by clause 30.9.3 of the Standard Form.
Present proceedings
On 7 April 1993, the Plaintiffs issued an originating summons for the hearing "of an application by the Plaintiffs under s. 27 of the Arbitration Act 1950 for an order that the time in which to give a written request to concur in the appointment of an arbitrator in respect of a claim by the Plaintiffs for damages for breach" —of the contract be extended —"so as to validate the Plaintiffs' written request to concur in the appointment of an arbitrator dated 7 April 1993".
The Defendants objected to the extension; they contended that there was no jurisdiction to make it; alternatively, if there was jurisdiction, the Judge should not exercise his discretion in favour of the Plaintiffs. The Judge decided both these questions in favour of the Plaintiffs. His order did not follow the wording of the summons, but was in these terms:
"The time specified under clause 30.9.3 of the contract dated 24th February 1988 between the Crown Estate Commissioners and John Mowlem and Company plc within which to commence arbitration shall be extended for a period ending on the expiry of 14 days after the date of this order."
The Defendants appeal the decision on jurisdiction; if that is established, they do not challenge the exercise of the Judge's discretion.
The Judge was also asked to rule on the construction of clause 30.9.l.l, and he did so as I have indicated, accepting the Plaintiffs' contention. The Defendants also appeal that decision.
The first issue
The relevant contractual provisions of the Standard Form, as amended by amendment 4, are as follows:
The Arbitration clause.
"Article 5
If any dispute or difference as to the construction of this contract or any matter or thing of whatsoever nature arising thereunder or in connection therewith shall arise between the employer or his architect on his behalf and the contractor either during the progress or after completion or abandonment of the works —it shall be and is hereby referred to the arbitration in accordance with clause 4l."
Clause 4l, so far as material, provides:
"4l.lIf a dispute or difference as referred to in Article 5 has arisen including"
(then certain examples are given)
"then such dispute or difference shall be referred to the arbitration and final decision of a person to be agreed between the parties to act as Arbitrator, or, failing agreement within 14 days after either party has given to the other a written request to concur in the appointment of an Arbitrator, a person to be appointed on the request of either party by the person named in the Appendix.
4l.4Subject to the provisions of clauses 4.2, 30.9, 38.4.3, 39.5.3 and 4O.5 the Arbitrator shall, without prejudice to the generality of his powers, have power to direct such measurements and/or valuations as may in his opinion be desirable in order to determine the rights of the parties and to ascertain and award any sum which ought to have been the subject of or included in any certificate and to open up, review and revise any certificate, opinion, decision, requirement or notice and to determine all matters in dispute which shall be submitted to him in the same manner as if no such certificate, opinion, decision, requirement or notice had been given."
Clause 30.9.l
Except as provided in clauses 30.9.2 and 30.9.3 (and save in respect of fraud) the Final Certificate shall have effect in any proceedings arising out of or in connection with this Contract (whether by arbitration under article 5 or otherwise) as
30.9.l.lconclusive evidence that where the quality of materials or the standard of workmanship are to be to the reasonable satisfaction of the Architect the same are to such satisfaction."
Clauses 30.9.l.2, l.3, l.4 are not relevant to this appeal.
Clauses 30.9.2 and 30.9.3 provide:
"30.9.2If any arbitration or other proceedings have been commenced by either party before the Final Certificate has been issued the Final Certificate shall have effect as conclusive evidence as provided in clause 30.9.l after either:
2.lsuch proceedings have been concluded, whereupon the Final Certificate shall be subject to the terms of any award or judgment in or settlement of such proceedings, or
2.2a period of 12 months during which neither party has taken any further step in such proceedings, whereupon the Final Certificate shall be subject to any terms agreed in partial settlement, whichever shall be the earlier.
30.9.3If any arbitration or other proceedings have been commenced by either party within 28 days after the Final Certificate has been issued, the Final Certificate shall have effect as conclusive evidence as provided in clause 30.9.l save only in respect of all matters to which those proceedings relate."
The Arbitration Act 1950 ("the Act") by s. 27 provides:
"Where the terms of an agreement to refer future disputes to arbitration provide that any claims to which the agreement applies shall be barred unless notice to appoint an arbitrator is given or an arbitrator is appointed or some other step to commence arbitration proceedings is taken within a time fixed by the agreement and a dispute arises to which the agreement applies, the High Court if it is of the opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may, on such terms, if any, as the justice of the case may require, but without prejudice to any enactment limiting the time for commencement of arbitration proceedings, extend the time for such period as it thinks proper."
The Appellants' contentions
Mr. Seymour QC, on behalf of the Appellants, submits that, in order for the court to be able to exercise its powers under s. 27 of the Act, it is necessary that the agreement between the parties to refer future disputes to arbitration contain some provision that any claims to which the agreement applies shall be barred unless some step to commence arbitration proceedings is taken within a time fixed by the agreement. The court, he submits, has no power under s. 27 of the Act to extend any time limits failure to comply with which does not result in barring claims.
Further, Mr. Seymour submits that clause 30.9.l of the Contract does not in any way inhibit the commencement of arbitration proceedings. Indeed, the introductory words of clause 30.9.l expressly contemplate the possibility of such proceedings. All clause 30.9 is concerned with is the evidential effect of the Final Certificate in any proceedings which may be commenced. There is, he argues, nothing in the Contract which...
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