Northern & Shell Plc v John Laing Construction Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nelson:,LADY JUSTICE HALE,LORD JUSTICE JUDGE |
| Judgment Date | 16 July 2003 |
| Neutral Citation | [2003] EWCA Civ 1035 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A1/2002/2159 QBENF |
| Date | 16 July 2003 |
[2003] EWCA Civ 1035
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
TECHNOLOGY AND CONSTRUCTION COURT
HIS HONOUR JUDGE ANTHONY THORNTON QC
QUEEN'S BENCH DIVISION
Lord Justice Judge
Lady Justice Hale And
Mr Justice Nelson
Case No: A1/2002/2159 QBENF
Robert Clay (instructed by Rosenblatt) for the Appellant
Finola O'Farrell QC (instructed by Rosling King) for the Respondent
This is an appeal by Northern & Shell plc, the Claimants, against the decision of His Honour Judge Thornton QC of 4 October 2002 in which he granted the application for summary judgment by John Laing Construction Limited, the Defendants, and dismissed the Claimants action upon the basis that all the claims brought by them under a Deed of Warranty dated 16 January 1990 were statute barred.
The dispute arises out of the construction of an office block originally known as Merchants House, but now known as Northern & Shell Tower, at Cityharbour, Millwall Dock, Tower Hamlets E14. Merchants House was one of two office blocks constructed between May 1987 and 1989 by the Defendants, John Laing Construction Limited, the contractor, under a main contract dated 10 February 1988. As a term of this building contract with the developer, the Brunel Centre Limited, John Laing Construction Limited were obliged to enter into warranties under seal in a form reasonably required by, amongst others, the initial occupational tenants who agreed terms of 15 years or more.
The original leaseholders were Stockley Academy Limited who, on 23 May 1989, purchased a long leasehold interest in excess of 15 years from the developer. In compliance with the terms of the main contract John Laing Construction Limited entered into a Deed of Warranty with Stockley Academy Limited on 16 January 1990. By this deed, John Laing Construction Limited covenanted and undertook with the purchaser, Stockley Academy Limited that it had complied and would at all times duly comply with the terms of the main contract. The 'Purchaser' under the deed is deemed to include its successors in title and assigns. Northern & Shell plc which now leases and occupies the Northern & Shell Tower is a successor in title of Stockley Academy Limited and hence a purchaser under Clause 4 of the Deed of Warranty of 16 January 1990.
The development consisted of two blocks and certificates of practical completion were issued on 16 January 1989, 8 May 1989 and the final certificate in respect of the external works on 25 August 1989. The defects period under the main contract therefore ran until August 1990. The Claimants alleged that the cladding of windows, roof coping and weatherproofing of the Northern & Shell Tower was not effective, airtight or thermally secure as a result of the defective construction of features provided by the cladding subcontractor. As a consequence, poor insulation, rattling of the cladding panels in the wind and moisture penetration into the construction blocks occurred. The Claimants allege that these defects arise as a result of breach by John Laing Construction Limited under the building contract and hence under the warranty deed.
The question which arose on the Defendant's application was whether the cause of action accrued on the date when the warranty was signed, namely 16 January 1990, or on the date when clause 5 of the Deed of Warranty stated that the deed came into effect, namely on the day following the date of issue of the certificate of practical completion, that is 26 August 1989. As the limitation period for the Deed of Warranty and building contract, both of which were under seal, was 12 years, that limitation period had expired when proceedings were commenced if the cause of action accrued on 26 August 1989 but had not expired if it accrued on 16 January 1990. The judge held that the effect of clause 5 was to backdate the deed to one day after the certificate of practical completion, hence making it have retrospective effect including the date when time started to run under the statutory limitations. Accordingly he found that the limitation period had expired and the claims were statute barred.
The Deed of Warranty
The agreement was made on the 16 th January 1990 with the original date on the draft of 1989 deleted. The agreement is between John Laing Construction Limited and Stockley Academy Limited and states:-
"WHEREAS:
(A) By a contract ('the Contract') referred to in the First Schedule hereto the Brunel Centre Limited appointed the contractor to carry out works for the construction of two office blocks at Cityharbour Isle of Dogs London Borough of Tower Hamlets.. and in particular that part of such Works (herein after called 'the Development') relating to the construction of Merchant's House at Cityharbour aforesaid and ancillary works.
(B) The purchaser has purchased a Lease of Merchant's House from the Brunel Centre Limited
NOW THIS DEED WITNESSETH as follows:
1. All references to 'the Contract' herein shall be deemed to mean the Contract in so far as it relates to the Development.
2. The Contractor hereby covenants and undertakes with the purchaser that:-
That it has complied and will at all times duly comply with the terms of the Contract
It has exercised and will continue to exercise all reasonable skill and care which may be expected of a contractor in relation to the Development and in the performance of its duties under the Contract and under this Agreement
It will provide such information and copies of documents relating to the works to be carried out under the Contract as may be reasonably requested by the Purchaser in writing and which are in the possession of the Contractor
To the extent that the Contractor has selected or will select materials or goods for the Development they are or will be of good quality and will satisfy any performance specification or requirement which is included or referred to in the Contract..
References in this Agreement to 'the Purchaser' shall be deemed to include its successors entitled and assigned
This Deed shall come into effect on the day following the date of issue of the Certificate of Practical Completion under the Building Contract for Merchant's House."
The building contract is identified in the First schedule as being that of 10 February 1988 between the Brunel Centre Limited and the contractor.
The Deed of Warranty was drafted and intended to be signed before the date of issue of the Certificate of Practical Completion. This is clear not only from the wording of clause 5 itself but from the fact that the contractor covenanted and undertook that it had complied with and would in the future comply with the terms of the building contract; that it had exercised and would continue to exercise reasonable skill and care; that it would provide information and documents, and that materials selected by it were and would be of good quality. (2.1, 2.2, 2.3 and 2.4 of the Deed.) The watershed, as the judge described it, between past and future performance was defined by clause 5 as being the day immediately following the date of the certificate of Practical Completion. That was the day when the warranty deed stated that it 'shall come into effect'. The wording of the deed however was drafted as if that watershed date between past and future performance had not yet taken effect although in fact the deed was signed some months after practical completion.
The parties must therefore have intended, the judge found, that the deed should take effect in the future. The parties must have envisaged that the warranty deed would be entered into before practical completion but soon after the lease had been signed and that the contractor's promises were to take effect on the day immediately following the date of the Certificate of Practical Completion.
Although the parties did not sign the warranty deed until some months after the Certificate of Practical Completion the language of the deed was not amended and clause 5 still referred to the date on which the deed was to take effect as being in the future rather than was in fact the case, some four and a half months earlier.
The judge's conclusion that the parties had intended that the Deed of Warranty would be signed before the date of the Certificate of Practical Completion is clearly correct. It is relied upon by the Appellant and not challenged by the Respondent.
The Building Contract.
This was in the JCT Private With Quantities Form of Building Contract and was entered into under seal between the Developer, the Brunel Centre and John Laing Construction Limited. Clause 56 of the schedule of amendments to the Conditions inserted a new clause 45 which read as follows:-
"45.1 The Contractor agrees at the written request of the employer to answer all questions and to supply copies of all documents reasonably requested by any Entitled Party here meaning;
45.1.1 any bankers or financial institutions of the Employer;
45.1.2 any initial investment owners and their mortgagees;
45.1.3 initial occupational tenants for terms of 15 years or more
and the Contractor further agrees to enter into all Warranties under seal in the form reasonably required by any Entitled Party. Subject as mentioned below not more than one Warranty would be provided in respect of each building comprising Phase I and each investment sale unit in the case of Phase II and Phase V. The Contractor will not in any such Warranty be required to give any greater undertaking than that contained in this...
To continue reading
Request your trial
-
Michael John Burgess v BIC UK Ltd
...prior to the execution of the contract: see Trollope & Colls Ltd v Atomic Power Constructions Ltd [1963] 1 WLR 333 and Northern and Shell plc v John Laing Construction Ltd [2003] EWCA Civ 1035. 120 In the present context, however, the applicable principles are those laid down by Lord Walker......
-
BIC UK Ltd v Michael John Burgess
...proposition were Trollope & Colls Ltd v Atomic Power Constructions Ltd [1963] 1 WLR 333 (at 339, per Megaw J) and Northern and Shell PLC v John Laing Construction Ltd [2003] EWCA Civ 1035, 90 Con. L. R. 26, at 35 The judge then said that, in the present context, the applicable principles ......
-
British Overseas Bank Nominees Limited And Another Against Stewart Milne Group Limited
...terms of the Collateral Warranty retrospective: cf Swansea Stadium Management; and Northern & Shell plc v John Laing Construction Ltd [2003] EWCA Civ 1035. Even if one assumed, therefore, that the obligations now founded upon were immediately enforceable, it followed that, as between the pu......
-
Tucker v Southwinds Hotel & Beach Club Ltd (Trading as Divi Southwinds)
...that retroactivity was the mutual intention of the contracting parties: Northern & Shell plc v. John Laing Construction Ltd. [2003] E.W.C.A. Civ 1035 at paras 51–52 per Nelson, J. While it is not necessary for the parties to have an existing or prior contractual relationship in order for th......