Inframatrix Investments Ltd v Dean Construction Ltd [2012] EWCA Civ 64 (03 February 2012)

31-05-2012 11:12

In our newsletter, SPW 114, issued in the Autumn of 2011, we considered the first instance decision in this matter. That decision has now been appealed to the Court of Appeal for consideration. 

At first instance the court considered the contract between the parties which included a clause as follows:

“17.4 No action or proceedings under or in respect of this Agreement shall be brought against the Contractor 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 Contractor last performed Services in relation to the Project.”

Dean Construction Limited (“DCL”) concluded its works for Inframatrix Investments Ltd (“IIL”) in December 2008, and snagging works in February 2009. A dispute arose as to whether the works were defective and no practical completion certificate was issued by IIL. The parties engaged in pre-action correspondence and negotiations throughout 2009 and 2010, however, IIL only issued court proceedings on 29 December 2010. DCL argued that clause 17.4 operated to bar IIL from bringing its claim as either Practical Completion had occurred in December 2008 or February 2009, or if not, clause 17.4 (b) operated as more than one year had passed since DCL last carried out “Services” for IIL.

The court at first instance concluded that if Practical Completion had not occurred, clause 17.4 (b) was effective and IIL’s claim was time barred.

In the Court of Appeal IIL repeated the contentions put before the court at first instance, namely:

  1. that there had not been Practical Completion of the Services; and
  2. paragraph (b), because the words "where such date does not occur" were in the present tense rather than the past tense, only applied where Practical Completion is not going to be achieved, for example, if the owner abandons the Project.

IIL further argued that further words should be implied into clause 17.4 (b) to better express what the parties had agreed as follows:

"where such date does not occur because time for occurrence is no longer expected to be achieved by the client .." 

The Court of Appeal dismissed IIL’s appeal upholding the reasoning of the court at first instance. The Court of Appeal concluded that IIL’s proposed additional wording would mean that IIL could dictate the point at which time begins to run in respect of the limitation clause and there was no evidence to suggest that this was the intention of the parties.

Lord Justice Stanley Burnton said:

“In my judgment, clause 17.4 was intended to provide an easily ascertainable limitation period for a claim against the defendant. The question "Is the claimant entitled to bring proceedings?" should be easily answerable when it arises, and should not depend on an investigation of the merits of the claim. If there had been Practical Completion of the Services, the claimant had one year from its date to bring proceedings. If not, it had one year from the date when the defendant last provided Services as defined. The claimant contends that there had not been Practical Completion. If so, clause 17.4(b) applied.”

If you would like any more information about this case or the issues raised, please contact Philip Vickers.

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