Wed, 23 May 2012
By Philip Mantle
In Inframatrix Investments v Dean Construction [2012] EWCA Civ 64, the Court of Appeal has recently provided a timely reminder of the need for prospective Claimants to be mindful of limitation notwithstanding the facts that attempts are being made to resolve the nascent dispute by means alternative to litigation.
The matter concerned Inframatrix Investments (Claimant) and Dean Construction (Defendants). In July 2008 the Parties entered in to a contract (the Contract) to perform roofing and cladding work to a new factory. (the “Services”).
The contract contained the following clause at 17.4;
"No action or proceedings under or in respect of this Agreement shall be brought against the [Defendant] 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 [Defendant] last performed Services in relation to the Project."
There was no provision within the contract that completion be certified nor did the same seek to the term “Practical Completion”.
Work commenced in November 2008. By December 2008 C had raised issues with D over various aspects of the work. Further snagging works were carried out in February 2009, and thereafter work ceased. In July and October 2009, in accordance with the Pre-Action Protocol, solicitors on behalf of C wrote to D raising allegations of poor workmanship. The Defendant responded in February 2010 offering to carry out some limited remedial works. Subsequent to that offer in March 2010, there was a site meeting, at which D offered to return to the site to carry out further works if necessary. C refused to allow D to return to site.
In December 2010 C issued proceedings. D sought summary judgment on the claim. C contended that there had been no practical completion. D disagreed, and further argued that even if there had been no practical completion Clause 17.4 applied and the proceedings had been commenced outside the prescribed period, being 1 year from the date when D had last performed services. (i.e. February 2009). By contrast C contended that the site meeting in March 2010 were the performance of services.
At first instance the Court held that the March 2010 meeting ought to be seen in the context in which it occurred, namely that the same was part of without prejudice negotiations being conducted in an attempt to avoid litigation, not as part of the performance of services under the contract. Accordingly the claim was time barred.
C appealed, contending that it was a principle issue of construction that contractual provisions would not be construed to give a party the benefit of its own wrong- per Alghussen Establishment v Eton College [1988] 1 WLR 587. The Court of Appeal rejected this argument upon the basis that to apply the above principle to the current case would be to prevent the party in breach of the contract from relying upon Clause 17.4, depriving the Clause of any effect. Further the Court confirmed the finding at first instance that the site meeting in March 2010 had occurred in the course of without prejudice negotiations, and as such did not represent the performance of services under the contract. The appeal was dismissed.
