R.G. Carter Building Ltd v Kier Business Services Ltd (formerly Mouchel Business Services Ltd)
| Jurisdiction | England & Wales |
| Judge | Mr Edward Pepperall |
| Judgment Date | 05 April 2018 |
| Neutral Citation | [2018] EWHC 729 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2017-000261 |
| Date | 05 April 2018 |
[2018] EWHC 729 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Mr Edward Pepperall QC
SITTING AS A DEPUTY HIGH COURT JUDGE
Case No: HT-2017-000261
Mr Steven Walker QC (instructed by Mills & Reeve LLP) for the Claimant
Miss Lynne McCafferty (instructed by Beale & Company Solicitors LLP) for the Defendant
Hearing date: 25 January 2018
Judgment handed down: 5 April 2018
Approved Judgment
I direct that pursuant to CPR PD39A para 6.1 no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
Mr Edward Pepperall QC:
This judgment concerns the trial of a preliminary issue as to whether these contribution proceedings are statute barred pursuant to section 10 of the Limitation Act 1980. It raises a short point as to the proper construction of the section.
In 2001/2, the Claimant, R.G. Carter Building Limited, built a new science block at Boston Grammar School. Unfortunately, the science block, which was designed by the Defendant, Kier Building Services Limited, suffered problems with the ingress of water into the building. Consequently, the client, Lincolnshire County Council, brought arbitration proceedings against Carter. The arbitration was settled in 2015 upon terms that Carter would carry out remedial works at its own cost.
On 20 September 2017, Carter issued these proceedings against Kier seeking an indemnity or a contribution of £205,908.60 in respect of the cost of the settlement. Kier has not filed a Defence but plainly intends to plead that the claim is statute barred. In those circumstances, the court approved a consent order on 31 October 2017 setting down the trial of the preliminary issue of limitation. While it is unusual to conduct the preliminary issue of an unpleaded defence, the parties have jointly invited the court to take this course.
The parties entered into a standstill agreement on 28 April 2017. Of course, such agreement does not prevent Kier from arguing that this claim was already statute barred, but it does not seek to argue that the claim is out of time if the court finds that the limitation period had not expired at the date of the standstill agreement. Thus, the issue before the court is whether the contribution claim was statute barred on 28 April 2017.
The parties' respective positions can be briefly summarised:
5.1 Mr Steven Walker QC, counsel for Carter, contends that there was no agreement as to the remedial works until the parties to the arbitral proceedings signed a settlement agreement on 29 June 2015. Alternatively, the date of agreement was in any event later than 28 April 2015 since the parties were still negotiating the terms of their settlement throughout April. Accordingly, he submits, the two-year limitation period did not expire until after the standstill agreement and this claim is in time.
5.2 Miss Lynne McCafferty, counsel for Kier, argues that the remedial works were agreed by 16 April 2015, or at the latest by 27 April 2015. All that remained to be agreed thereafter were ancillary matters that did not prevent time from running. Therefore, she argues, the claim was already statute barred at the date of the standstill agreement.
THE EVIDENCE
Carter called two witnesses; its company secretary, Robert Alflatt, and its solicitor, Alison Garrett of Mills & Reeve LLP. Both had first-hand dealings with the 2015 settlement of the arbitration. They explained the negotiations that were conducted between Carter and the Council between December 2014 and June 2015. Specifically, they explained that an agreement in principle was reached during April 2015 but that all negotiations were expressly conducted on a subject to contract basis until the parties signed the settlement agreement on 29 June 2015.
Kier served a witness statement from its solicitor, Nathan Modell, of Beale & Company Solicitors LLP. Mr Modell described the negotiation of the standstill agreement in April 2017. Otherwise, he had no direct knowledge of the 2015 settlement and his statement essentially gave a preview of counsel's submissions. He was rightly not called to give oral evidence.
Carter and the Council attended a without prejudice meeting on 27 March 2015. Mr Alflatt attended on behalf of Carter together with David Drake (Carter's Director and General Manager) and Peter Smith (the then regional director responsible for Carter). A handwritten note of their discussions was produced in evidence. It recorded agreement that Carter would carry out external remedial works at its own cost as soon as reasonably practicable. The parties also agreed that Carter would carry out internal works at the joint cost of the parties, but the scope of such works remained to be agreed. In addition, John Radice was to provide a warranty in respect of his remedial design, the wording of which was to be agreed. The emerging agreement was expressly subject to the school's agreement.
Further correspondence followed in which the parties clarified what had been agreed on 27 March. Mr Alflatt agreed in cross-examination that the scope of the proposed external works had already been defined by reference to Mr Radice's December 2014 report. The proposed deal was not that Carter would undertake to remedy the defects, but that it would carry out the agreed works. It was therefore seeking to contract for a clean break with any warranty as to the efficacy of the design to be given by Mr Radice. Accordingly, it was important to the Council, and no doubt the school, that the proposed works would be effective.
Meanwhile, on 29 March 2015, Mr Drake e-mailed a detailed proposed specification for the internal works to the Council. In cross-examination, Mr Alflatt described the specification as a “draft for discussion.”
By an e-mail dated 16 April 2015, prominently marked “WITHOUT PREJUDICE SAVE AS TO COSTS” and “SUBJECT TO CONTRACT”, Mark Keal, a senior lawyer at the Council, wrote:
“I confirm that my client is minded to pursue a settlement along the lines of the proposal discussed between our respective clients on 27 March 2015. Accordingly, my client's efforts are now focussed on the matter of the Heads of Terms documentation.
The initial feedback from the School is that they are also amenable to attempting the external works in an effort to solve the problem.
The School have confirmed that your client may undertake investigatory works between 2–4 May …
Accordingly, it seems sensible to agree a way forward that ensures that our respective clients have a sufficient opportunity to discuss and finalise the Heads of Terms … documentation.”
By a second e-mail sent on the same day, again prominently marked “WITHOUT PREJUDICE SAVE AS TO COSTS” and “SUBJECT TO CONTRACT”, Mr Keal added:
“I confirm that my client is prepared to agree to a settlement in principle in accordance with the heads of terms agreed between our respective clients at their [without prejudice] meeting on 27 March 2015 and as recorded in the manuscript note attached subject to the detail of the Heads of Terms being agreed and the Council obtaining the full agreement of the School to the Heads of Terms.
You indicated that your client was willing to agree to a suspension of the arbitration until the end of May having regard to the above. My client agrees that is a sensible way forward to ensure efforts can be concentrated upon agreeing the Heads of Terms.”
By a letter dated 20 April 2015, Mr Keal proposed additional internal works. Such letter was sent under cover of an e-mail in which Mr Keal made clear that the Council considered it sensible to agree the scope of the internal works before finalising the heads of terms. This point was repeated in a further letter from Mr Keal on 21 April in which the Council sought a revised schedule of internal works.
The investigatory surveys were undertaken over the May Day bank holiday weekend. Mr Alflatt explained that the surveys were necessary in order to finalise the scope of the remedial works. Carter responded on 7 May 2015 on a number of issues, including points of detail about the scope of the internal works. A technical meeting was held on 8 May 2015 in the absence of the lawyers in order to discuss and agree the design and scope of the remedial works and the programme for the works to be undertaken over the summer holidays. Rejecting the suggestion that Carter had reached a concluded agreement with the Council by 16, or alternatively 28, April 2015, Mr Alflatt observed that it was not until the technical meeting on 8 May that there was clarity as to the scope of the works to be carried out.
Modest preparatory work started on site on 8 June 2015. Specifically, cabins were delivered to site and the risk assessment and method statement were finalised. Mr Alflatt said that he was then confident that agreement would be reached and that accordingly Carter was happy to undertake some preliminary work in setting up the site in view of the limited window in which remedial works could be undertaken before the start of the autumn term. Nevertheless, he maintained that the parties had not at that stage reached agreement as to the final scope of the works. Indeed, Mr Alflatt told me that the scope of the external works was adjusted right up until 25 June 2015 following sample work undertaken on 23 June upon opening up a section of the external wall.
THE LAW
Section 1 of Civil Liability (Contribution) Act 1978 provides that any person liable in respect of any damage can recover contribution from any other person liable in respect of the same damage. Section 1(4) of the Act provides:
“A person...
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Projects & Construction Law Update - May 8 2018
...Cases your contribution claims in time R.G. Carter Building Limited v Kier Business Services Limited [2018] EWHC 729 (TCC) In this case, a designer was unable to avoid a contribution claim from its contractor by raising a defence that the claim was outside the applicable limitation period. ......
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Table of cases
...RGB P&C Ltd v Victory House General Partner Ltd [2019] EWHC 1188 (TCC) III.24.110 RG Carter Building Ltd v Kier Business Services Ltd [2018] EWHC 729 (TCC) II.13.257, III.26.60 RG Carter (West Norfolk) Ltd v Ham Gray Associates Ltd (1994) 42 Con LR 67 III.26.247, III.26.303 RG Carter (West ......
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Damages
...per Fraser J. 794 Limitation act 1980 (UK) sections 10(2), (3) and (4). See also RG Carter Building Ltd v Kier Business Services Ltd [2018] EWhC 729 (TCC). 795 Baker & Davies plc v Leslie Wilks Associates [2005] BLr 425 at 428–430, per hhJ havery QC. 796 Limitation Ordinance (Cap 347) (hK) ......
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Litigation
...of action which had already expired as at the date the agreement took efect: RG Carter Building Ltd v Kier Business Services Ltd [2018] EWHC 729 (TCC) at [4], per HHJ Pepperall QC. 231 See Mortgage Express v Countrywide Surveyors Ltd [2015] EWCA Civ 1110 at [21], per Simon LJ; Russell v Sto......