Crudens v Tayside Health Board
| Jurisdiction | Scotland |
| Judgment Date | 27 October 1978 |
| Date | 27 October 1978 |
| Docket Number | No. 11. |
| Court | Court of Session (Inner House - Second Division) |
SECOND DIVISION.
Lord Allanbridge.
Res judicataIdentity of question raisedMedia concludendiIdentity of grounds of claimArbitration followed by civil actionWhether party barred from raising action of damages for breach of contract considered during arbitration.
ArbitrationSubmission and referenceContract to refer-Effect and Scope.
A limited company contracted with a health board to carry out certain works in accordance with a standard form R.I.B.A. contract. The works were delayed allegedly as a result of failures on the part of the board's design team. The architects and quantity surveyors refused or delayed to certify certain aspects of the works. The company alleged that their refusal resulted from interference in breach of contract by the board. After arbitration the company was awarded 2,313,497 in addition to extras already certified in respect of delays for which the board was responsible. During the course of the arbitration the company asked the arbiter to award a further sum in respect of the loss of use of the money eventually awarded. The arbiter refused to do so. The company claimed that his refusal resulted from the fact that such a claim did not fall within the reference of the arbitration. The company then raised an action against the board concluding for payment of,inter alia, sums being damages for the said loss of use. The board pleaded that such an action was incompetent and that the company was barred from insisting in it as its subject matter had already been considered and resolved during the arbitration. After debate in the procedure roll the Lord Ordinary repelled the competency plea andquoad ultra allowed a proof before answer. The board reclaimed.
Held (1) that the proper approach in deciding whether an action is barred by prior arbitration proceedings is to examine the questions raised in the arbitration and to see whether the same questions are raised in the action; (2) that only if the questions in the action had been properly and competently before the arbiter and properly resloved by him could they be excluded from being the subject matter of the subsequent action; (3) that in this case the questions raised had not been referred to the arbiter and he could not competently have dealt with them; and reclaiming motion refused.
Crudens Limited brought an action of damages against Tayside Health Board concluding for payment of the sums of 554,226 and 21,770 in respect of contract works at Ninewells Hospital, Dundee. Disputes arose between the parties and certain matters were referred to arbitration under a deed of submission.1 following narration of the facts is taken from the opinion of the Lord Ordinary (Allanbridge): "The parties in the arbitration
(hereinafter referred to respectively as Crudens and The Board) entered into a building contract in 1963 in terms of which Crudens as main contractors would construct a new teaching hospital and medical school at Ninewells, Dundee. The contract was, with certain modifications, regulated by the R.I.B.A. Schedule of Conditions (with Quantities) (1963 edition). Certain of the Clauses of these conditions were particularly referred to in the arguments in the present case. Clause 11 related to the Architect/Supervising Officer issuing instructions regarding variations and the like and sanctioning them. Clause 24 gave the Architect/Supervising Officer power to ascertain the direct loss and/or expenses sustained by the contractor caused by disturbance of regular progress of the works. Clause 26 (1) (b) gave the contractor, without prejudice to any other rights or remedies which he might possess, power to determine by notice his employment under the contract if the employer interfered with or obstructed the issue of any certificate due under the contract. Clause 35 was the arbitration clause which referred all disputes under the contract to arbitration. Sub-Clause 2 of Clause 35 stated that such a reference to arbitration should not be opened until practical completion of the works unless with the written consent of the employer or the Architect/Supervising Officer on his behalf and the contractorBefore the works under the contract were completed certain disputes arose between Crudens and the Board. They therefore agreed, as they were entitled to agree in terms of said Clause 35 (2) of the contract, to submit certain questions to an arbiter whilst the works were still in progress. The reference to the arbiter was made in terms of a deed of submission dated 4th and 5th June 1969. Seven specific questions were contained in this deed of submission The first five questions were concerned with matters arising under Clause 11 of the conditions of contract. The sixth question was concerned with questions arising under Clause 24 of these conditions. The seventh question dealt with a dispute as to whether Crudens had drawn up a final building
programme which should be deemed to form part of the contract in terms of Clause 14 of these conditions and also what date fell to be regarded as the completion date for the contract. The questions to be answered by the arbiter were later restricted to a consideration of the history and progress of the contract for the period up to 31st July 1970 and not thereafterThe arbitration proceedings lasted over a total period of about one hundred days during which the arbiter, according to his decision of 29th April 1974, had listened to evidence, formal submissions and informal representations. By interlocutor dated 20th October 1969, the arbiter answered question 1 in the negative. On 25th November 1969 he ordained the parties to lodge a statement of claim and answers thereto relating to questions 2 and 7. On 19th November 1970 the arbiter answered question 7 (a) in the affirmative by consent and then held that Programme SAX/200D was the final building programme in terms of Condition 14. On 21st October 1971 the arbiter decided that as at 31st July 1970, the date 31st May 1973 fell to be regarded as the completion date for the works. He thus dealt with and answered question 7.
I now turn to consider how the arbiter dealt with the other questions. Question 2 appears to have been dealt with partly by his interlocutor of 20th November 1970 and finally...
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