Inframatrix Investments Ltd v Dean Construction Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Stanley Burnton,Lord Justice Aikens,Lord Justice Elias |
| Judgment Date | 03 February 2012 |
| Neutral Citation | [2012] EWCA Civ 64 |
| Docket Number | Case No: A1/2011/2200 |
| Court | Court of Appeal (Civil Division) |
| Date | 03 February 2012 |
[2012] EWCA Civ 64
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
NEWCASTLE DISTRICT REGISTRY
H. H. JUDGE BEHRENS (sitting as Judge of the High Court)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Stanley Burnton
Lord Justice Aikens
and
Lord Justice Elias
Case No: A1/2011/2200
Mr Jason Evans-Tovey & Crispin Winser (instructed by Irwin Mitchell LLP) for the Claimant
Kim Franklin (instructed by DWF LLP) for the Defendant
Hearing date: 26 th January 2012
Introduction
This is an appeal by Inframatrix Investments Ltd, the claimant in proceedings in which it claimed damages against Dean Construction Ltd for breaches of a construction agreement dated 29 July 2008 ("the agreement"), against the order of His Honour Judge Behrens, sitting as a High Court Judge, granting the defendant's application for summary judgment and dismissing the claimant's claim.
The appeal raises short points as to the interpretation and effect of a contractual limitation clause and its application to the facts of the present case. The judge held that the limitation clause barred the claim.
The agreement
The background to the agreement was set out by the judge at the beginning of his judgment, in which he referred to the claimant as "IIL" and to the defendant as "DCL":
"3. The claim relates to works carried out by DCL at IIL's unit at Delves Lane Industrial Estate, Consett, County Durham. The Project (as defined in Annexe A) consisted of the construction of Phase 1 of a camera factory.
4. IIL is a Company based in the British Virgin Isles. Mr Medhesh Al-Suhaim is its Managing Director.
5. A total of 7 contractors were employed for the project each of whom [was] on site for a different specified time. The works were carried out in sequence such that there was only one contractor on site at the time.
6. DCL were specialist roofing and cladding constructors. They were the third (or perhaps the fourth) contractor on site and were followed by a number of others including the contractor who fitted the windows.
7. In early 2008 Mr Al-Suhaim invited DCL to quote for roofing and cladding works at a proposed factory in Consett designed by Mammut Building Systems in Dubai. At the time Mr Al-Suhaim was advised by Solicitors Swinburn Maddison and engineers Peter Eaton Associates (Alan Wagstaff).
8. DCL's revised quotation of £61,225 was submitted to the Claimant's engineer, Alan Wagstaff, and subsequently accepted by Mr Al-Suhaim. The parties negotiated a formal contract."
In the agreement, the claimant was referred to as "the Client" and the defendant as "the Contractor". The recitals to the agreement were as follows:
"(1) The Client intends to proceed with the Project as described in Annex A
(2) The Client wishes to appoint the Contractor to act as Roofing and Cladding Contractor in relation to the Project on the terms and conditions set out in this Agreement.
The defendant's obligations were set out in clause 1. Its principal obligation was set out in clause 1.1:
"The Client appoints the Contractor to act as Roofing and Cladding Contractor in relation to the Project to perform the services set out in Schedule 1 ('the Services') and on the terms and conditions set out in this Agreement and the Contractor agrees to perform the Services exercising reasonable skill and carefully and faithfully in the best interests of the Client. Where in the performance of the Services, the Contractor seeks or is obliged to seek the Client's approval or agreement to any matter or thing, the giving or confirming of the same by the Client shall not in any way derogate from the Contractor's obligations hereunder."
Schedule 1 defined the Services to be provided by the defendant:
"1.1 Assume the role of Principle (sic) Contractor for the period during which the Services are provided
1.2 Erection of fall arrest netting
1.3 Erection of roof edge protection scaffold
1.4 Erection of access tower at one corner of the building
1.5 Supply and fixing of double skin trapezoidal roof sheeting including insulation
1.6 Supply and fix microrib composite panels to the walls. Fixed horizontal
1.7 Supply and fix trimline gutters and down corner pipe
1.8 Contractor will be responsible for ensuring that the building passes its air pressure test and correcting any defects relating to the cladding at no cost to the client.
1.9 Remove all scaffolding and clear all rubbish and surplus material from site.
1.10 Contractor to be responsible for the security of his materials and equipment on site."
It can be seen that the agreement distinguished the Project, which was the construction of an entire building, from the Services for which the Contractor was responsible, which were essentially the construction of the roof.
Clause 1.2 of the agreement was a warranty by the defendant that it would exercise reasonable skill care and diligence. Clauses 1.6 and 1.7 were as follows:
"1.6. The Contractor shall at all times keep the Client fully and properly informed on all aspects of the progress and performance of the Services and shall further provide the Client with all such other information in connection with the Project as the Client may reasonably require. The contractor will meet with the Client to report on the Services at least fortnightly, but with Project meetings monthly and in addition as and when the Client or the Project CDM Co-ordinator shall reasonably require.
1.7. The Contractor shall use reasonable professional skill care and diligence to inspect the Works in accordance with the requirements of Schedule 1."
The limitation clause was clause 17.4:
"17.4 No action or proceedings under or in respect of this Agreement shall be brought against the Contractor after:
(a) the expiry of 1 year from the date of Practical Completion of the Services or;
(b) where such date does not occur, the expiry of 1 year from the date the Contractor last performed Services in relation to the Project."
This was a very short limitation period, but it has to be seen in the context of the definition in clause 19 of the Construction Period for the entire Project as 8 weeks.
Clause 19 contained a number of definitions expressed to apply "where the context so admits". There was no definition of "Practical Completion" of the "Services", and no provision for that to be certified. There was a definition of Practical Completion as "practical completion of the construction of the Project as certified by Peter Eaton & Associates Ltd". "Services" were again defined as "the services to be performed by the Contractor as set out in schedule 1".
The facts
I can take the facts, which are not relevantly in dispute, from the judge's judgment:
"15. DCL carried out the work on site between November and December 2008. On 8 th January 2009 Mr Wagstaff visited the site and took the opportunity to carry out a visual inspection of the low level cladding. He sent DCL an e-mail in which he expressed the view that the workmanship was of poor quality and that little care had been taken with the fitting of the panels generally. He expressed the view that problems would occur with the pressure test. He identified 5 separate areas of defects and stated that when the obvious faults have been corrected he would carry out a full inspection including the high level gutters.
16. On 9 February 2009 Mr Beal (DCL's quantity surveyor) sent e-mails to Mr Wagstaff and Mr Al-Suhaim in which he asserted that the building was complete and had been accepted by Mr Wagstaff.
17. On 27 th March 2009 Mr Al-Suhaim sent an e-mail which referred to "a few technical issues … mainly by loud noise caused by vibration of the cladding panels"
18. On 5 th May 2009 Swinburne Maddison, the solicitors then acting for IIL wrote to DCL. Much of the letter deals with the moneys allegedly due to DCL. At that time some £47,315.50 had been paid and DCL were claiming the moneys outstanding. However the letter also makes a vague reference to "various snagging items that need to be resolved" without going into detail. Swinburne Maddison asked DCL to deal with the snagging items to an acceptable standard within two weeks.
19. DCL replied to this letter on 19 th June 2009. Much of the letter deals with the amounts allegedly due to DCL. However it also contains an assertion by DCL that all the work has been completed and that payment is due.
20. On 27 th July 2009 Swinburne Maddison wrote a further letter to DCL. The letter is headed "Without Prejudice". It is, however agreed between the parties that any privilege relating to the without prejudice status of any letters in the bundle has been waived. After dealing with various money issues the letter asserts that as the final inspection has not taken place there are a number of snagging issues. It criticises the workmanship and makes 4 specific allegations:
A recent air leakage test has failed
There is a water leak to the property
The side panels are vibrating in high winds as a result of poor quality workmanship and the fact that they do not appear to have been fixed to the steel structure correctly.
The general quality of the workmanship and finish is poor with general defects and snagging issues requiring rectification.
21. It is then pointed out that IIL has obtained independent reports in respect of the works and has been advised that remedial works would cost between £105,000 and £107,500. At that time IIL were willing to...
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