Laurence Mcintosh Limited V. Balfour Beatty Group Limited+the Trustees Of The National Library Of Scotland

JurisdictionScotland
CourtCourt of Session
JudgeLord Drummond Young
Neutral Citation[2006] CSOH 197
Publication Date21 December 2006
Date21 December 2006
Docket NumberCA44/05

OUTER HOUSE, COURT OF SESSION

[2006] CSOH 197

CA44/05

OPINION OF

LORD DRUMMOND YOUNG

in the cause

LAURENCE McINTOSH LIMITED

Pursuers;

against

(FIRST)BALFOUR BEATTY GROUP LIMITED and (SECOND) THE TRUSTEES OF THE NATIONAL LIBRARY OF SCOTLAND

Defenders:

________________

Pursuers: Reid, QC; Biggart Baillie

Second Defenders: McNeill, QC; Dundas & Wilson CS

21 December 2006

[1] The pursuers are a limited company incorporated under the Companies Acts. They aver that their business was formerly carried on by a partnership named Laurence McIntosh & Sons, and that the whole business, assets, rights and liabilities of the partnership were during the year 2000 transferred to the pursuers, who were incorporated to take over the business. In 1997 the first defenders entered into a Management Contract with the second defenders under which the first defenders were to carry out extensive fire protection and refurbishment works at the second defenders' premises in George IV Bridge in Edinburgh. On 29 January 1998 the first defenders and Laurence McIntosh & Sons entered into a Works Contract for the joinerwork specified in the Management Contract. The Management Contract was in the form of the Scottish Management Contract (March 1988), together with the Scottish Supplement to the Conditions of the JCT Standard Form of Management Contract, 1987 Edition, incorporating the amendments numbered SBCC Amendment Sheet Nr 1 and certain further ad hoc alterations and amendments. The joinerwork under that contract was referred to as Work Package No 23. The Works Contract was governed by the Standard Form of Scottish Works Contract/1/Scot (March 1988 Revision), together with a number of other documents, including an invitation to tender and tender. The pursuers were not originally parties to the Works Contract, having been incorporated after its date; nevertheless, they aver that by assignation dated 1 December 2005 the former partners of Laurence McIntosh & Sons assigned to the pursuers their whole right, title and interest in and to the Works Contract, the assignation bearing to be effective from 11 April 2000. That assignation was intimated to the first defenders' agents by letter dated 5 December 2005.

[2] The pursuers have raised the present proceedings against the first and second defenders. The conclusions of the summons seek a number of remedies. The first conclusion is for declarator that a pretended final certificate dated 25 September 2003 issued by the contract administrator under the Management Contract is invalid and of no effect in so far as it purports to be conclusive evidence of the matters specified in (a) clause 4.32 of the Works Contract Conditions and (b) clause 1.14 of the Management Contract Conditions and in so far as it (i) relates to a sum attributable to the Works Contract and (ii) purports to have effect as conclusive evidence that all and only such extensions of time as are due under the Management Contract by reason of delay to the works carried out under the Works Contract had been given. The second conclusion seeks reduction of the final certificate. The third conclusion is for declarator that under the Works Contract the pursuers are entitled to an extension of time of 67 weeks or such other period as the court might determine. The fourth conclusion is for declarator that sums totalling £636,026.23 ought to be included in certain calculations performed and documents issued for the purposes of the Works Contract and Management Contract. The fifth and sixth conclusions are for declarator that the first and second defenders respectively are due to pay those sums to the pursuers, and the seventh and eighth conclusions are for payment of those sums by the first and second defenders respectively.

[3] The second defenders are not of course an original party to the Works Contract, and neither the pursuers nor the partnership of Laurence McIntosh & Sons were parties to the Management Contract. The second defenders contend that, because neither the pursuers nor Laurence McIntosh & Sons was a party to the Management Contract, the pursuers have no title to sue the second defenders under that contract. They further contend that the pursuers were not and have not become a party to the Works Contract; the party which concluded that contract as works contractor was the partnership, Laurence McIntosh & Sons. Consequently, it is said, the pursuers have no title to sue under the Works Contract. The second defenders have tabled pleas in law (their first and second pleas) in support of the foregoing contentions. The first plea in law challenges the pursuers' title to sue in respect of the Management Contract; the second plea challenges the pursuers' title to sue the second defenders as works contractor under the Works Contract. The pursuers contend that they have, as a party to the Works Contract, title to challenge the validity of the final certificate issued under the Management Contract. Alternatively, they contend that the structure of the Management Contract is such as to give them title to pursue the remedies sought in the present action. In addition, they contend that the second defenders are personally barred from maintaining that the pursuers have no title to sue as works contractor, and they have tabled a plea in law (their fifth) to that effect. I appointed the action to a preliminary proof before answer on the first and second pleas in law for the second defenders and the fifth plea in law for the pursuers.

[4] I propose first to summarize the evidence led at proof, which was relevant principally to the issue of the title to sue of the company in a situation where the partnership was the original contracting party. Thereafter I will deal with the company's title to sue and the question of personal bar. I then intend to consider whether they pursuers as works contractor have title to sue the second defenders directly. Finally, I will consider the question of whether a jus quaesitum tertio exists in favour of the pursuers. In view of my answers to the latter two questions, the issues of the company's title to sue and personal bar are not strictly relevant. Nevertheless, a full argument was presented on these matters, and I will deal with them accordingly.

Evidence

[5] Evidence was led from two directors of the pursuers, Mr. Robert Findlay, who had been their managing director since December 2002, and Mr. Fraser Robertson, who was their commercial director. Mr. Robertson had been a partner in Laurence McIntosh & Sons. He gave evidence that the partnership had been the original contracting party for WP 23. The partnership had been advised, however, that a limited company should be formed to take over the business, and an off-the-shelf company was acquired in 2000. The partnership continued to run the business until the end of its current accounting period, in July 2000, and payments received until then were paid into the partnership bank account. The company took on all new contracts. The partnership had never been formally dissolved. Nor had there been any formal or documented transfer of the partnership's assets and liabilities to the company. The partners had been advised that they did not need to do anything of that nature. The transfer had been managed by writing to the accounts departments of those with whom the partnership had contracts. In relation to the second defenders, this had been done by a fax dated 31 August 2000, sent to their accounts department. That fax was on partnership writing paper but was signed by Mr. Robertson as a "Director", obviously of the company. The fax read:

"Our Bank Account details have changed and we would be grateful if payments due for invoices dated from 01/08/00 could be paid to the account listed below.

Laurence McIntosh Limited

Royal Bank of Scotland

Sort Code [ sort code]

Account [account number]

In relation to this fax, it should be noted that the request relates to the payment of invoices and a change of bank account. The reference to the company rather than the partnership in relation to the bank account can readily be explained through the principle of ad hoc agency, discussed below at paragraphs [16] and [17]. Mr. Robertson had not been directly involved with the contract for the National Library building, but he had investigated the matter and accepted that no formal assignation had been effected. It also appeared from his evidence that he was unable to say that the second defenders were made aware of any transfer of rights from the partnership to the company in respect of WP 23.

[6] Mr. Findlay gave evidence that he had investigated the National Library contract when he had taken over as managing director. The works on site had been completed by then, but the process of measurement had not been completed, and nothing had been done to push the pursuers' claim in respect of the contract; that claim had been intimated in May 2001. Mr. Findlay made reference to extensive correspondence that had passed in relation to the contract; in many of letters the works contractor was referred to as "Laurence McIntosh Limited". I deal with this correspondence in paragraph [9] below. Mr. Findlay also spoke to telephone conversations that he had had with representatives of both defenders to discuss outstanding monies; such meetings had taken place with Mr. Angus Pattison, the second defenders' construction consultant, and Armours, who acted as the second defenders' quantity surveyors for the project. Mr. Findlay stated that during those conversations Mr. Pattison and Armours knew that he was representing the company, Laurence McIntosh Limited. He thought that Armours, at least, treated the company as the works contractor for the purposes of WP 23. Until the present action was raised, in May or June 2005, it had never been suggested that any person other than Laurence McIntosh Limited was the works contractor. Expenses had been incurred in making the...

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1 cases
  • Promontoria (ram) Limited Against John Moore
    • United Kingdom
    • Court of Session
    • 21 June 2017
    ...where the party has a substantial right requiring only formal completion: see Laurence McIntosh Limited v Balfour Beatty Group Limited [2006] CSOH 197 at [20]ff. The raising of proceedings and the attendant judicial intimation of the assignation completed any formal defect in the pursuer’s ......
1 books & journal articles
  • Payment of Another's Debt, Unjustified Enrichment and ad hoc Agency
    • United Kingdom
    • Edinburgh Law Review Nbr. , January 2011
    • 1 January 2011
    ...to payment of another's debt.77Laurence McIntosh Ltd v Balfour Beatty Group Ltd and the Trustees of the National Library of Scotland [2006] CSOH 197; John Stirling t/a M & S Contracts v Westminster Properties Scotland Ltd [2007] CSOH 117. These decisions are considered in Part C below. ......

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