Oxford University Fixed Assets Ltd v Architects Design Partnership [QBD (TCC)]
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Humphrey Lloyd |
| Judgment Date | 13 January 1999 |
| Court | Queen's Bench Division |
| Date | 13 January 1999 |
Queen's Bench Division (Technology and Construction Court).
His Honour Judge Humphrey Lloyd QC.
Bruce Mauleverer QC (instructed by Squire & Co) for the defendant.
Marcus Taverner (instructing by Trowers & Hamlins) for the third Party.
The following cases were referred to in the judgment:
Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1998] CLC 830; [1999] 1 AC 266.
Birse Construction Ltd v Haiste Ltd [1996] CLC 577; [1996] 1 WLR 675.
Crown Estate Commissioners v John Mowlem & Co LtdUNK (1994) 70 BLR 1.
Friends' Provident Life Office v Hillier Parker May & Rowden [1995] CLC 592; [1997] QB 85.
Guinness plc v CMD Property Development LtdUNK (1995) 46 Con LR 48.
Jameson v Central Electricity Generating BoardWLR [1999] 2 WLR 141.
Kaye (P & M) Ltd v Hosier & Dickinson LtdWLR [1972] 1 WLR 146.
Logan v Uttlesford District Council (1986) 136 NLJ 541.
Matthew Hall Ortech Ltd v Tarmac Roadstone LtdUNK (1997) 87 BLR 96.
Mitsui v A-G of Hong KongUNK (1986) 33 BLR 1.
Modern Engineering (Bristol) Ltd v Gilbert-Ash (Northern) LtdELR [1974] AC 689.
National Coal Board v William Neill & Son (St Helens) LtdELR [1985] QB 300.
Nottingham Health Authority v Nottingham City CouncilWLR [1988] 1 WLR 903.
Photo Production Ltd v Securicor Transport LtdELR [1980] AC 827.
Wimpey (George) & Co Ltd v British Overseas Airways CorpELR [1955] AC 169.
Contract — Building contract — Contribution — Effect of final certificate under JCT standard form of building contract — Whether architects could claim contribution from contractor after issue of final certificate — Whether contractor's liability could be established by action — Whether contractor had “ceased to be liable”— Civil Liability (Contribution) Act 1978, s. 1.
This was the trial of a preliminary issue concerning the availability of the right of contribution from a contractor who had the benefit of a final certificate issued by the architects under cl. 30.9 of the 1980 edition of the JCT standard form of building contract.
The plaintiff, “OUFA”, was the employer under a building contract in JCT standard form (1980 edition, revised up to 1988, private with quantities). The third party, “Wimpey”, was the contractor. The defendant architects issued a final certificate under cl. 30.9 of the building contract in 1994. In 1997 OUFA issued proceedings against the architects claiming damages for negligence and breach of contractual duty in relation to certain defective blockwork. OUFA alleged that issuing the final certificate was negligent. But for the issue of the certificate OUFA could have held Wimpey liable for the defective blockwork. The architects denied liability and issued a third party notice against Wimpey alleging that Wimpey was liable to OUFA for the defects in the building and seeking contribution from Wimpey under s. 1 of the Civil Liability (Contribution) Act 1978. Wimpey argued that the final certificate was a defence to the third party proceedings. The question whether the architects could claim contribution was tried as a preliminary issue.
Held, dismissing the third party proceedings:
1. Contribution could only be recovered from a person under. 1(1) of the 1978 Act if that person had a liability in respect of the relevant damage which had been or could be established in an action. The final certificate operated as an evidential bar which precluded an employer from being able to prove any liability on the part of the contractor. Once the final certificate had been issued no liability could be established by OUFA against Wimpey within the meaning of s. 1(6) of the 1978 Act. Section 1(6) defined liability for the purposes of every part of s. 1 and accordingly Wimpey could not be liable under s. 1(1). ( Crown Estate Commissioners v John Mowlem & Co LtdUNK (1994) 70 BLR 1 applied.)
2. Wimpey was not a person who had ceased to be liable within s. 1(3) of the 1978 Act. The issue of the final certificate was tantamount to a decision discharging the liability of the contractor which was not the same as a cessation of liability.
3. Wimpey was not within the proviso to s. 1(3). “Period of limitation” in the proviso to s. 1(3) meant a time-bar applicable to the proceedings brought by the person claiming contribution and did not refer to the period within which the architects were obliged to issue a final certificate under the contract.
4. The answer to the preliminary issue was that the final certificate afforded a defence to Wimpey.
Judge Humphrey Lloyd QC: 1. On 13 November 1998, I ordered that there should be a preliminary issue on certain questions of law raised by the defence of the third party (which I shall call “Wimpey” even though the company has now changed its name to Tarmac Construction (Contracts) Ltd). The central point of law is both interesting and of potential general importance. It concerns the availability of the right of contribution from a contractor who has had the benefit of a final certificate issued under cl. 30.9 of the 1980 edition of the JCT Standard Form of Building Contract. I first set out some of the background facts, as they are found in the pleadings, before turning to the issue and to the arguments.
2. The plaintiff, OUFA, entered into a contract with Wimpey dated 30 November 1989 for the construction of a building in Mansfield Road, Oxford to house the Department of Pharmacology and the Anatomical Neurapharmacology Unit, the contract sum being £8,881,936. The architect named in the contract was the first defendant, Architects Design Partnership (the architects). The contract incorporated the Standard Form of Building Contract 1980 Edition, incorporating amendments 1, 2, 4 and 5 (i.e. revised up until 1988), private with quantities. Clause 30 contained the following provisions:
“30.9.1 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
1.1 conclusive evidence that where and to the extent that 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, and
1.2 conclusive evidence that any necessary effect has been given to all the terms of this Contract which require that an amount is to be added to or deducted from the Contract Sum or an adjustment is to be made of the Contract Sum save where there had been any accidental inclusion or exclusion of any work, materials, good or figure in an computation or any arithmetical error in any computation, in which event the Final Certificate shall have effect as conclusive evidence as to all other computations, and
1.3 conclusive evidence that all and only such extensions of time, if any, as are due under clause 25 have been given, and
1.4 conclusive evidence that the reimbursement of direct loss and/or expense, if any, to the Contractor pursuant to clause 26.1 is in Final settlement of all and any claims which the Contractor has or may have arising out of and the occurrence of any of the matters referred to in clause 26.2 whether such claim be for breach of contract, duty of care, statutory duty or otherwise.
30.9.2 If 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 30.9.1 after either:
2.1 such 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
2.2 a 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.
30.9.3 If 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 30.9.1 save only in respect of all matters to which those proceedings relate.
30.10 Save as aforesaid no certificate of the Architect shall of itself be conclusive evidence that any works, materials or goods to which it relates are in accordance with this Contract.”
3. Partition walls of blockwork were constructed during 1990. OUFA allege that they were abnormally and unacceptably wet or were not protected from weather and kept dry so that when they dried out widespread cracking was caused, particularly to the plasterwork which had been applied to the blockwork. On 29 July 1991 the architects certified that practical completion of the works had been achieved. On 16 August 1992 the architects sent Wimpey lists of defects in the works which had to be made good before the defects liability period ended. The list included cracking to the plaster. Wimpey carried out remedial work to repair the plaster cracking but evidently unsuccessfully for by 21 December 1992 the architects issued a further list of defects which required attention. OUFA brought further areas of cracking to the architects' attention about a year later in November 1993. Further remedial work was done by Wimpey in early 1994. On 7 June 1994 the architects issued a certificate of the completion of making good defects. They followed up that certificate by issuing a final certificate under cl. 30.9 of the building contract on 18 July 1994. It was in standard form: it certified the adjusted contract sum of £9,613,813.29 and the amount previously certified for payment and expressed the difference as a sum payable by OUFA to Wimpey.
4. OUFA issued the writ in these proceedings on 25 July 1997 claiming damages for negligence and breach of contractual duty of care owed by the architect to...
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