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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> F Brown Plc v Tarmac Construction (Contracts) Ltd [2000] ScotCS 38 (11 February 2000)
URL: http://www.bailii.org/scot/cases/ScotCS/2000/38.html
Cite as: [2000] ScotCS 38
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OUTER HOUSE, COURT OF SESSION

O10/17/1989

 

 

 

 

 

 

 

 

 

 

OPINION OF LORD MACFADYEN

in the cause

F. BROWN PLC

Pursuers;

against

TARMAC CONSTRUCTION (CONTRACTS) LIMITED

Defenders:

 

________________

 

Pursuers: Murphy; Dundas & Wilson, C.S.

Defenders: Mure; MacRoberts

 

11 February 2000

Introduction

In 1983 the defenders entered into a management contract with Britoil (Development) Limited in terms of which they agreed to manage Phase I of the construction of Britoil's headquarters in St Vincent Street, Glasgow. In 1985 the defenders entered into a sub-contract with the pursuers for the execution of works in relation to the installation of suspended ceilings in the building. Practical completion of the sub-contract works was achieved in September 1986. This action, in which the pursuers make a number of claims against the defenders arising out of the sub-contract, was raised in Glasgow Sheriff Court in October or November 1987. Britoil (Development) Limited was convened as a third party in June 1988. In December 1988 the cause was remitted to this court. In June 1989 the cause was sisted to await the outcome of other related proceedings. That sist was finally recalled in November 1995, the third party having in the meantime been assoilzied. Further adjustment and amendment on several occasions followed, diets for hearing on the procedure roll in June 1997, July 1998 and October 1999 were discharged, and the cause eventually called before me on the procedure roll on 18 January 2000. At that stage Mr Murphy, who appeared for the pursuers, sought and was granted leave to amend the pursuers' pleadings further by the deletion of the fifth crave and the relative ninth plea-in-law, and various averments in articles 4 and 9 of the condescendence. He also sought to add certain further averments to article 7. I shall require to say more about that aspect of the amendment later.

In the course of the debate, Mr Mure for the defenders advanced argument to the effect (1) that the pursuers' averments relating to an implied term of the sub-contract were irrelevant, (2) that certain of the pursuers' claims had prescribed, and (3) that certain other parts of the pursuers' pleadings were irrelevant. His motion in light of those submissions was that the action should be dismissed, which failing various aspects of the pleadings should be excluded from probation. It is convenient to consider the submissions in the three chapters indicated above.

I. Implied Term

(1) The Averments

In article 4 of the condescendence, as amended at the outset of the hearing, the pursuers aver that:

"the Sub-Contract was subject to the following implied term:-

That the defenders would take all steps reasonably necessary to enable the pursuers to discharge their obligations and execute the Sub-Contract Works in an orderly manner.

Said implied term is a term that no party entering into the Sub-Contract acting reasonably would have failed to accept. In the absence of such a term the contract would be inoperable and lack business efficacy."

In article 9, the pursuers found upon the implied term so contended for in the following way. After averring that delay, disruption and prolongation was caused by the defenders' breach of contract, they continue:

"The principal delaying events hereinbefore condescended upon were as a result of the defenders' said breach of contract. In particular (a) in failing to provide timeous and sufficient site access and possession the defender is in breach of Condition 8(1) [sic; the correct reference is 8(i)] of the Sub-contract, 6(i)(a) of the Form of Agreement and also of the implied term specified in Article 4 hereof; (b) in failing to provide timeous and sufficient information and instructions to enable the Sub-contract works to be carried out in an orderly and efficient manner the defender is in breach of conditions 3(iv) and 13(iii) of the Sub-contract and also of the implied term specified in Article 4 hereof; (c) in failing properly to control and co-ordinate the work of other Sub-contractors, thereby delaying and disrupting the orderly and efficient progress of the pursuer's works, the defender is in breach of item 44(i)(e) of the Bills of Quantities Preliminaries and the implied term specified in Article 4 hereof."

(2) The Defenders' Submissions

In making his submission that the pursuers' averments relating to the implied term were irrelevant, Mr Mure referred to some of the more recent cases in the familiar line of authority on the subject (Crawford v Bruce 1992 SLT 524, per Lord President Hope at 531; Rockcliffe Estates plc v Co-operative Wholesale Society Limited 1994 SLT 592, per Lord MacLean at 594I-L; Ductform Ventilation (Fife) Limited v Andrews-Weatherfoil Limited 1995 SLT 88; London Borough of Merton v Stanley Hugh Leach Limited (1985) 32 BLR 51 per Vinelott J at 80-81; and Trollope & Colls Limited v North West Metropolitan Regional Hospital Board [1973] 1 WLR 601, per Lord Pearson at 606D). He referred also to my own recent decision in Scottish Power plc v Kvaerner Construction (Regions) Limited 1999 SLT 721. On the basis of those cases he formulated a series of propositions which he submitted were relevant to the implication of terms into a contract. These propositions were:

  1. that the courts will not imply a terms to the effect of rewriting the contract so as to save a party from the consequences of a bad bargain;
  2. that the overriding consideration is the presumed intention of the parties;
  3. that the basis for implication is necessity for the purpose of giving the contract the business efficacy that the parties must have intended it to have; it is not enough that the term contended for is reasonable;
  4. that the implied term must not be contradictory of an express term;
  5. that where there are several possible provisions that might remedy an alleged omission, the court may have difficulty in concluding that any one formulation is what the parties must be deemed to have intended;
  6. that where the parties have concluded a detailed written contract covering a wide range of rights and obligations, the court should be slow to imply any term, unless it is plain that something that the parties must have intended has been omitted; and
  7. that if a term is to be implied, it must be clear and precise and avoid uncertainty, particularly when it touches upon a matter already dealt with in express terms.

The conditions of the sub-contract between the pursuers and the defenders are set out in No. 29/3 of process. Those conditions apply to one of a number of "work packages" let by the defenders for the purpose of implementing their management contract with Britoil (Development) Limited. In order to consider the pursuers' case for the implication of the term contended for in article 4 of the condescendence, Mr Mure submitted, it was necessary to examine the express terms of the sub-contract conditions, and the other sub-contract documents, all in the context of the defenders' position under the management contract and of the existence of other sub-contracts regulating other work packages. The pursuers' averments, however, made no attempt to place the proposed implied term in that context. There was a considerable degree of overlap of subject matter between the proposed implied term and various express provisions of the sub-contract. Illustrations could conveniently be drawn from the other provisions relied upon by the pursuers, in conjunction with the proposed implied term, in the passages designated (a), (b) and (c) in article 9 of the condescendence. There, at (a), the implied term was said to bear on the provision of timeous and sufficient site access and possession. The express terms founded upon as also bearing on that matter were condition 8(i) of the sub-contract conditions and clause 6(i)(a) of the form of agreement. Condition 8(i) provides that:

"The Management Contractor shall from time to time make available to the Sub-Contractor such part or parts of the Site as shall be necessary to enable the Sub-Contractor to timeously execute the Sub-Contract Works in accordance with the Sub-Contract but the Management Contractor shall not be bound to give the Sub-Contractor possession or exclusive control over any part of the Site".

Clause 6(i) regulates the commencement and completion dates for the sub-contract works, and provides for the pursuers to be given access to the site on or about a specified date, together with access to the various parts or sections of the sub-contract works as generally set out in the sub-contract programme. The second respect in which the proposed implied term was relied upon in article 9 of the condescendence, at (b), was in relation to the provision of timeous and sufficient information and instructions. The express terms said also to bear on that matter were conditions 3(iv) and 13(iii). Condition 3(iv) is in the following terms:

"The Management Contractor shall provide the Sub-Contractor at the times and in the manner and in accordance with the procedures stated in the Sub-Contract with all drawings details specifications calculations data and information which are necessary for the execution and completion both of the Sub-Contract Works by the Sub-Contractors and of work by others."

Condition 13(iii), which for a full understanding of the respective parts to be played by the pursuers and the defenders in the timeous provision of information requires to be read along with condition 13(i) and (ii), provides:

"The Management Contractor shall be responsible for providing the Sub-Contractor with all information required for the execution and completion of the Sub-Contract Works within the time scales required of the Sub-Contractor by this Sub-Contract based upon the Sub-Contract Programme. Provided that where the Sub-Contract Works have been or are to be designed by the Sub-Contractor then the Sub-Contractor will be responsible for the timeous production of such information for the Management Contractor's approval in sufficient time to enable the Management Contractor to comply with the provisions of this sub-clause."

The sub-contract did impose certain design responsibilities on the pursuers (see the Bills of Quantities (No. 29/4 of process), preliminaries, paragraph 2). Reference was also made to paragraphs 14 and 15 of the preliminaries. The third respect in which the pursuers sought to rely on the proposed implied term, at (c), was in relation to the proper control and co-ordination of the work of the other sub-contractors. In that connection the pursuers aver both breach of item 44(i)(e) of the preliminaries and breach of the implied term. Item 44(i)(e), however, merely provides that the sub-contractor, in the preparation of his tender, will be deemed to have given due cognisance to the fact that during the period of execution of the sub-contract works other sub-contractors will be working on the works in areas adjacent to the sub-contractor. Express detailed provision for co-ordination programming was also to be found in Condition 28. In all the circumstances it could not be said that the pursuers had relevantly averred circumstances from which it could be inferred that the proposed implied term was one which passed the business efficacy test. Even if there was need for some implied term, it could not be inferred that the parties must have agreed on the term for which the pursuers now contend. The averments relating to the proposed implied term should therefore be excluded from probation.

(3) The Pursuers' Submissions

Mr Murphy did not dispute either Mr Mure's citation of authority or the propositions which he had drawn from the authorities. He accepted that the onus was on the pursuers to show that the proposed implied term was necessary to give the contract that business efficacy that both parties were to be presumed to have intended it to have. He submitted that the question should be approached in the same way as I had approached the case for implication of a similarly expressed term in Scottish Power plc v Kvaerner Construction (Regions) Limited at 726D-J. He offered to amend the proposed implied term, if necessary, to limit it to the taking of steps which were within the defenders' power, although he suggested that such a limitation was not required because it was implicit in the phrase "reasonably necessary". The present case, he submitted, did not involve the difficulties which led Lord Sutherland to refuse to uphold the implied term contended for in Ductform Ventilation (Fife) Limited v Andrews-Weatherfoil Limited. He accepted that the context for the consideration of the implied term contended for was that the defenders were management contractors with over-all control of the works and responsibility for securing the completion of the building, including those parts of the works sub-contracted to the pursuers. It was clear that both parties were to be presumed to have intended that under the sub-contract the pursuers would achieve timeous completion of the sub-contract works. He stressed that the proposed implied term sought to impose on the defenders an obligation only to take "reasonable steps" to enable the pursuers to achieve such completion in an orderly manner. He submitted that, if the term was necessary to give the contract business efficacy, it was then for the pursuers to decide what reliance to place upon it. If it was necessary in one context, it might then be relied upon in other contexts, despite the existence of express terms bearing upon those other contexts. The existence of, and the pursuers' reliance on, express terms in the situations mentioned at (a) and (b) in article 9 of the condescendence thus did not exclude the possibility of reliance on the implied term in those contexts. In the situation mentioned at (c) in that article, there was no express term relied upon as obliging the defenders to control and co-ordinate the work of other sub-contractors. Item 44(i)(e) of the preliminaries in the Bills of Quantities was relied upon, because it showed that what the pursuers were to take cognisance of was the presence of other sub-contractors in adjacent areas. That tended to suggest that they were not expected to have to cope with other sub-contractors operating in the same areas at the same time. The provisions about co-ordination programming in condition 28 were concerned with securing the pursuers' co-operation to enable their works to be co-ordinated with those of other sub-contractors, but did not place the defenders under an obligation to the pursuers to control and co-ordinate the operations of other sub-contractors so as to avoid disruption of the orderly progress of the pursuers' works. The implied term was necessary in the context of part (c) of article 9. The relative complaints of delay and disruption were those set out in items (3), (6), (7) and (8) in article 6 at pages 47-48 of the Closed Record. But for the implied term there would be no basis for recovery in respect of those items. Mr Murphy accepted that there was overlap between the implied term and certain express terms, but submitted that overlap was not the same as contradiction. Mere overlap did not necessarily exclude an implied term. The express provision in condition 8(i), for example, dealt with the availability of the site to enable timeous execution of the sub-contract works, but did not adequately address the pursuers' need to be

(4) Discussion

Although there are more bases than one upon which a term may be held to be implied in a contract (Liverpool City Council v Irwin [1977] AC 239 per Lord Wilberforce at 253-254; see also Scottish Power plc v Kvaerner Construction (Regions) Limited, at 725), it was common ground between counsel that in this case the only basis on which the pursuers seek to argue for implication of the term set out in article 4 of the condescendence is that it is necessary to give the contract the business efficacy that the parties must have intended that it should have. In my view, however, the bare averments to that effect contained in article 4 at page 40C of the Closed Record (as further amended) are not by themselves a sufficient basis for holding that the implied term has been relevantly averred. The intentions of the parties and the necessity for the implied term must in my view be judged by reference to the averments as a whole and the express terms of the sub-contract.

In my view it is possible to test the contention that the proposed implied term is necessary to give the contract the jointly intended business efficacy by asking whether the party seeking to rely on it requires to do so in order to succeed in the claim which he makes. An affirmative answer to that question will not, of course, be sufficient to support the conclusion that the term should be implied, but a negative answer will tend to demonstrate that it should not. In other words, if a claim can be based on express provisions of the contract, that tends to demonstrate that there is no necessity for an implied term to found the same claim. That reasoning is, in my view, applicable in the present case in relation to the averments in the passages marked (a) and (b) in article 9. If, as the pursuers aver at (a), the defenders' failure to provide timeous and sufficient site access and possession constituted a breach of their obligations under condition 8(i) and clause 6(i)(a), it is difficult to see the necessity of the proposed implied term in that context. Likewise, if the defenders' failure to provide timeous and sufficient information and instructions to enable the sub-contract works to be carried out in an orderly and efficient manner constitutes, as the pursuers aver at (b), a breach of the defenders' obligations under conditions 3(iv) and 13(iii), it is difficult to see the necessity for the proposed implied term in that context. The pursuers' averments at (c), that the defenders' failure to control and co-ordinate the work of other sub-contractors constituted a breach of item 44(i)(e) of the preliminaries in the Bills of Quantities appears to me to be misconceived, because that item does not in my view place any obligation on the defenders. If that is so, part (c) of article 9 may be the only context in which the pursuers do not relevantly base their case on an express provision of the contract. It therefore seems to me that if the proposed implied term is to be shown to be necessary, it must be in that context, where the claim may have no alternative basis in express provision.

The fact that, assuming that I am right in doubting whether item 44(i)(e) of the preliminaries affords a relevant foundation for aspect (c) of the pursuers' case of breach of contract, that aspect is left without foundation in the express provisions of the contract does not, of course, mean that there must be implied the term which the pursuers propose. The matter of co-ordination is the subject of fairly detailed express provision in condition 28. It does not, however, necessarily follow that, because that condition does not found the claim which the pursuers seek to make, the term for which they contend must be implied. While I accept in principle that there can be an implied term touching upon a subject matter on which the contract contains express terms (see Scottish Power plc v Kvaerner Construction (Regions) Limited at 725I), I also accept the fifth, sixth and seventh of Mr Mure's propositions. The fact that the present sub-contract contains detailed provisions about co-ordination seems to me to make it difficult to hold that the sub-contract also contained, for the purpose of supplementing the provisions regulating that matter, an implied terms as broadly and vaguely expressed as that contended for. The formulation of an implied term must in my view be a matter of circumstance in each case. In Scottish Power plc v Kvaerner I was persuaded that a term similar to the one contended for in the present case could be held to be implied, subject to some textual modification to meet the only grounds of objection to its implication advanced in that case. But I do not consider that the acceptance of that term in that case points to the conclusion that the term contended for in the present case should likewise be accepted. Having regard to the way in which the express provisions of the sub-contract deal with co-ordination, it cannot in my view be affirmed that the defenders must be taken to have intended that, for the purpose of supplementing those express provisions, the sub-contract should also be taken to include by implication the vaguely formulated term of apparently general application for which the pursuers contend. I do not consider that the position would be altered if the implied term contended for were amended in the respect proposed by Mr Murphy. It is conceivable that a more tightly and precisely formulated implied term might be justified, but I express no opinion on that, since no such reformulation was addressed in the submissions which I heard. I am satisfied, however, that the term contended for is far from being the only and necessary provision to meet an omission that the parties must be taken not to have intended.

In summary, my conclusions are that the pursuers' reliance on express provisions of the contract alongside the proposed implied term in parts (a) and (b) of article 9 militates against a finding that the implied term is necessary in those contexts, while in the context of part (c) the existence of detailed express provision on the subject of co-ordination (albeit not founded on by the pursuers) militates against acceptance that the implication of the generally expressed term contended for is necessary. That the term contended for is broader than can be justified as necessary in the context of part (c) of article 9 is evidenced by the pursuers' reliance upon it in parts (a) and (b) as well. In my opinion, the pursuers' averments fail to make the case that implication of the term set out in article 4 is necessary to give the sub-contract such business efficacy as both parties must be taken to have intended that it should have. Nothing is said, in my view, which justifies the conclusion that the defenders must have intended the sub-contract to include the implied term for which the pursuers contend.

I am therefore of opinion that, if the case is otherwise to proceed to proof, there should be excluded from probation the averments relating to the implied term.

II. Prescription

(1) The Defenders' Submissions

The obligations upon which the pursuers' claims expressed in the craves of this action are founded are obligations of the sort specified in paragraph 1(g) of Schedule 1 to the Prescription and Limitation (Scotland) Act 1973, namely obligations arising from, or by reason of breach of, a contract, not being obligations falling within any other provision of that paragraph. They are therefore subject to the provisions of section 6 of the Act, and are therefore extinguished if they have subsisted for a continuous period of five years without a relevant claim having been made or the subsistence of the obligation having been relevantly acknowledged. The argument which Mr Mure advanced was to the effect that certain of the claims now maintained were founded upon obligations which had been so extinguished. He reminded me of the well-known passage of the speech of Lord Keith of Kinkel in Dunlop v McGowans 1980 SC (HL) 73 at 81 to the effect that by virtue of section 11 in respect of an obligation to make reparation time runs for the purposes of section 6 from the date on which damnum concurs with injuria.

Mr Mure submitted that certain of the claims now maintained by the pursuers were introduced into the pleadings by amendment after the expiry of the relevant quinquennium. The proper approach to determining whether claims introduced at that stage were excluded by prescription was, he submitted, set out in a series of cases which he cited (J. G. Martin Plant Hire Limited v Bannatyne, Kirkwood, France & Co 1996 SC 105, per Lord Justice-Clerk Ross at 110-111; N. V. Devos Gebroeder v Sunderland Sportswear Limited 1990 SC 291 per Lord President Hope at 303; Middleton v Douglass 1991 SLT 726; G. A. Estates Limited v Caviapen Trustees Limited 1993 SLT 1051; Ductform Ventilation (Fife) Limited v Andrews-Weatherfoil Limited 1995 SLT 88; and a decision of my own, Classic House Developments Limited v G. D. Lodge & Partners (30 January 1998, unreported)). He submitted that the question must always be whether the claim introduced by amendment after the expiry of the quinquennium was founded upon an obligation in respect of which a relevant claim had been made within the quinquennium. If it was not, it was vulnerable to the plea of prescription.

 

(a) Article 7 of the Condescendence

This article contains the averments in support of the claim advanced in the first crave. The claim was not articulated in the pleadings as they stood prior to amendment in 1996. The submissions which Mr Mure advanced in relation to this aspect of the pursuers' case related in part to prescription and in part to relevancy, and it is inconvenient to separate the two strands of the argument. The pursuers' averments, as they stood when Mr Mure made his submissions, were to the following effect:

"On 4 December 1990 the pursuers wrote to the defenders confirming their acceptance of the sum of £787,228.02 as the agreed final value of their measured work comprising Work Package 2400 under exclusion of certain claims. Said agreed value formed the basis of a Certificate of Interim Valuation of work properly carried out to 19 September 1991 as follows:
 

Measured work up to 5 September 1992

  

£787,228.02
 

Dayworks

  

9,503.00
 

Gross amount certified

  

£796,731.02
 

Deductions: Retention:

£11,950.97

  
 

Amounts set-off

£53,759.00

65,709.97
 

Net amount certified:

  

£731,021.05
 

Net cash received:

  

£704,570.74
 

Difference between gross amount certified and net cash received ...

  

£92,160.28

In the circumstances the pursuers are not entitled to set-off or retain said sum. The defenders did not agree amounts to be set-off nor did they comply with the contractual procedure to permit set-off. Reference is made to Conditions 17(iv)(a) and 45 in Article 3 hereof. Accordingly the sum of £92,160.28 is contractually due to the pursuers and is the sum first concluded for."

Mr Mure drew attention to the structure of condition 17 which contemplated (i) a detailed application for interim payment made by the sub-contractor to the management contractor, (ii) an application by the management contractor to the quantity surveyor for interim payment, including such sum as the management contractor had ascertained was properly due to the sub-contractor in respect of his application for interim payment, (iii) the issue by the quantity surveyor to the architect of a certificate of interim valuation, showing inter alia the sum which he ascertained as properly due to the sub-contractor, (iv) the issue by the architect of an interim certificate showing inter alia the sum due to the sub-contractor, (v) payment of the amount so certified by the employer to the management contractor within a specified time, and (vi) payment by the management contractor to the sub-contractor of the latter's share within seven days thereafter. Here the document founded on was said to be a certificate of interim valuation (i.e. stage (iii)), and there were no averments that the subsequent stages of certification by the architect and receipt of the payment by the management contractor had followed. No relevant averment of entitlement to the sum first craved had therefore been made.

If, however, the averments relevantly supported the claim, Mr Mure's submission was that the obligation on which it rested had prima facie prescribed, since it appeared that it had its origin in an agreement in December 1990, more than five years before the claim was first advanced in a minute of amendment received in March 1996.

(b) Article 8 of the Condescendence

In relation to this aspect of the pursuers' pleadings, Mr Mure's submissions again related in part to relevancy and in part to prescription. The claim is in respect of costs allegedly incurred in complying with instructions for the removal of tiles to allow access for other sub-contractors. Various surveys in October 1986, and instructions 49, 50 and 52 issued in October and November 1986, are referred to. It is averred that:

"The instructions as condescended upon constitute a variation in terms of Condition 16 of the Sub-Contract. In the circumstances the pursuers are entitled to have said work valued and paid for in terms of Conditions 16(iv) and 17 of the Sub-Contract."

A similar claim was made in the original pleadings, but it was not until the amendment in 1996 that conditions 16 and 17 were founded upon.

Mr Mure submitted that the pursuers had not made a relevant case for payment under condition 16(iv) for a number of reasons. First, it was not averred that the alleged variations had not been required by the employer or the architect, and it was therefore not relevantly averred that the claim fell within condition 16(iv) rather than 16(ii). Secondly, if it was a proper condition 16(iv) claim, the sub-contract required measurement and valuation by agreement between the management contractor and the sub-contractor before payment, and it was not averred that that had taken place or how it was to take place. The relevant claim might therefore be for an order on the defenders to concur in a process of valuation, but the only remedy actually sought was payment. Thirdly, there were no averments explaining what condition 17 had to do with a claim under condition 16(iv).

So far as prescription was concerned, Mr Mure submitted that the particular obligations now founded on, namely the obligations under conditions 16(iv) and 17, had not been founded on in the pleadings as they stood before the expiry of the quinquennium.

(c) Article 9 of the Condescendence

Mr Mure submitted that if, contrary to his earlier submissions, the pursuers' had relevantly averred that the sub-contract included the implied term contended for in article 4 of the condescendence, the obligation which it placed upon the defenders had prescribed. The formulation of the implied term now relied upon was introduced into the pleadings by amendment in 1996. Although averments relying on an implied term had been present in the pleadings during the quinquennium, the implied term then contended for had been differently expressed. The averment at that stage was that the implied term was that:

"the defenders would co-operate with the pursuers with a view to enabling the pursuers to complete the Sub-Contract works as provided in the Sub-Contract".

That was a different obligation from the one now contended for. No relevant claim had been made within the quinquennium in respect of the implied term now founded upon.

(2) The Pursuers' Submissions

Mr Murphy did not dispute that the proper approach to whether claims advanced in amendments to the pleadings made after the expiry of the relevant quinquennium had prescribed was that set out in the authorities cited by Mr Mure. He submitted, however, that on a proper application of that approach, the parts of the pursuers' pleadings attacked by Mr Mure on the ground of prescription were not vulnerable to that attack.

(a) Article 7 of the Condescendence

Mr Murphy began his submissions in relation to this part of the pleadings by pointing out that there was a dispute of fact between the parties as to the provenance of the document on which the pursuers founded - the so-called "Certificate of Interim Valuation". The pursuers maintained that it was issued by the defenders, whereas the defenders maintained that it was tax invoice issued by the pursuers. In the course of Mr Murphy's submissions I pointed out to him that the pursuers' pleadings did not in fact assert that that document emanated from the defenders. He informed me that, although he could not specify precisely what the contractual status of the document was, he was in a position to make an averment that it emanated from the defenders, and would formulate an appropriate amendment before the end of the hearing. His submissions then proceeded. They were to the effect that, whatever the nature of that document may have been, it was evidence that the gross amount certified as due to the pursuers was then as stated therein, and was, so far as not already paid, then payable. That was a sufficiently relevant averment of the pursuers' entitlement to the balance claimed in the first crave. Since the claim was introduced by amendment in March 1996, less than five years after the date from which that document spoke in September 1991, the claim had not prescribed.

The amendment which Mr Murphy proposed was contained in paragraph 4 of the minute of amendment (No. 35 of process) which he tendered at the end of the debate. It was in the following terms:

"On or after 19 September 1991 the defender issued to the pursuer a document disclosing that at that date the gross sum certified as due to the pursuer was increased to £796,731.02. At or around that date the defender was obliged to account to the pursuer for sums due under the contract. In any event, said document was a relevant acknowledgment in terms of the Prescription and Limitation (Scotland) Act 1973."

Mr Mure opposed amendment in these terms, particularly the introduction of the assertion that the document was a relevant acknowledgement. I took the view that it would be appropriate to allow the pursuers to amend in terms of the first two sentences of the proposed passage, but not in terms of the third sentence. I regarded it as inappropriate to allow the pursuers to introduce into their pleadings at the end of the debate a proposition which had played no part in the submissions I had heard. In any event, it did not seem to me that the bare averment of a relevant acknowledgement gave the defenders any fair notice of what they were alleged to have acknowledged. There appears to be a dispute between the parties as to the defenders' right to set certain sums off against the total which would otherwise be due to the pursuers. That being so, a statement that the gross sum certified was of a certain amount does not seem to me to make clear what sum was allegedly acknowledged as then remaining due.

(b) Article 8 of the Condescendence

Mr Murphy submitted that it was implicit in the pursuers' reliance on condition 16(iv) that the instructions had not been required by the employer or the architect. The reference in the pursuers' pleadings to valuation was erroneous. Condition 16(iv) provided that in respect of variations to which it applied:

"any and all costs incurred by the Sub-Contractor in so complying with the Management Contractor's said Variation shall become a debt due to the Sub-Contractor by the Management Contractor, and the work executed by the Sub-Contractor in connection therewith shall be measured and valued by agreement between the Management Contractor and the Sub-Contractor."

Here the claim was not for payment for work done, but for the costs incurred in complying with an instruction temporarily to remove work already completed. Such costs were, in terms of the condition, a debt due by the defenders to the pursuers. He acknowledged that the reference to condition 17 was also erroneous. The claim was a simple condition 16(iv) claim for costs occasioned by a variation instructed by the defenders.

So far as prescription was concerned, Mr Murphy pointed to the pleadings as they existed before the expiry of the relevant quinquennium (as contained on pages 28-30 of the Sheriff Court Record of January 1989 (No. 14 of process)). They were in substance the same as the present pleadings, except that they contained no reference to condition 16(iv). There was, however, no other or different obligation then relied on. There was simply a failure to express the contractual basis of the obligation on the defenders to pay for the variations. The obligation which was then relied on was, however, the same as the obligation now relied on. A relevant claim had therefore been timeously made.

(c) Article 9 of the Condescendence

Mr Murphy submitted that, despite the change in its formulation, the implied term now founded on was in substance the same obligation as the implied term founded on in the original pleadings. He submitted that this case was closer to Ductform Ventilation (Fife) Limited v Andrews-Weatherfoil Limited than to N. V. Devos Gebroeder v Sunderland Sportswear Limited.

(3) Discussion

(a) Article 7 of the Condescendence

In my view the pursuers' pleadings in this article are irrelevant. They do not, in my view, make coherent sense, particularly in relation to dates. As the pursuers' pleadings now stand after the amendment allowed at the conclusion of the hearing, the sum of £787,228.02 is the subject of four inconsistent assertions, namely

  1. that it was accepted by the pursuers as the agreed final value of their measured works (under exclusion of certain claims) on 4 December 1990;
  2. that it formed the basis of a Certificate of Interim Valuation of work properly carried out to 19 September 1991;
  3. that it represented measured work up to 5 September 1992; and
  4. that on 19 September 1991 the defenders issued a document which disclosed that at that date the gross sum certified as due to the pursuers was increased to that sum.

It seems to me to be impossible to reconcile those statements. A document issued on 19 September 1991 could not represent measured work up to 5 September 1992. If it was a certificate of interim valuation in terms of condition 17(ii)(b), it could not have been issued by the defenders, but would have been issued by the quantity surveyor. Whatever its character, it cannot be regarded as demonstrating that at its date the sum due to the pursuers was increased to the figure mentioned in it, if that figure was indeed accepted by the pursuers as the agreed final value of their measured work on 4 December 1990. In my view, if they are to make a relevant case for recovery of the sum sued for in the first crave, the pursuers must make clear in their averments how in the context of the conditions of the sub-contract the sum sought comes to be due to them, and the date upon which it became so due. The present averments do not, in my view, do that.

For the pursuers to avoid the inference that any obligation on the defenders to pay the sum first craved has prescribed, they would in my opinion require to make it clear on averment that the obligation became enforceable less than five years before the claim was first made in the minute of amendment received in March 1996. Standing the averment that the pursuers accepted in December 1990 that the sum of £787,228.02 was the agreed final value of their measured work, they can, in my view, resist the plea of prescription only by making averments which show why the date on which the obligation on the defenders to pay the outstanding balance of that total was enforceable was no earlier than March 1991. The confusing and inconsistent averments which they make do not, in my view, adequately serve that purpose.

In these circumstances I am of opinion that the averments in article 7 of the condescendence fall to be excluded from probation on the grounds (i) that they are irrelevant and (ii) that they relate to an obligation which has prima facie prescribed and contain nothing to rebut the inference of prescription. It follows that decree of dismissal should be pronounced in respect of the first crave.

(b) Article 8 of the Condescendence

In my view Mr Murphy's submission as to the relevancy of the averments in this article are well-founded. It is, in my view, reasonable to infer from the pursuers' reliance on condition 16(iv) that the contention is that the variations were not required by the employer or the architect. It is also, in my view, clear on a fair reading of the pursuers' pleadings (despite the fact that they confuse the issue by averring that they are entitled to have their work valued) that what they claim is the cost of complying with the instructions to take down work already completed so as to accommodate other sub-contractors. In terms of condition 16(iv) that cost became a debt due to them by the defenders. As Mr Murphy recognised, however, the reference to condition 17 is irrelevant.

In my view, therefore, subject to the exclusion from probation of the words "valued and" and the words "and 17" in the penultimate sentence of the article, these averments are relevant for inquiry.

In my view the submission that the obligation on which this claim is based has prescribed is not well founded. I accept that in this context the question is whether a relevant claim was made within the quinquennium in respect of the obligation now founded upon (N. V. Devos Gebroeder v Sunderland Sportswear Limited). The mere fact, however, that no express mention of condition 16(iv) appeared in the pursuers' pleadings before the end of the quinquennium is not, in my opinion, fatal to the pursuers' contention. Apart from the failure to identify the contractual provision founded upon, the pursuers' pleadings on this aspect of the case, as they stood before the expiry of the quinquennium, were substantially the same as they are now. In the absence of any suggestion that there was another obligation on which the claim was originally based, I take the view that the original pleadings constituted a relevant claim in respect of the obligation now founded upon, albeit they did not expressly identify that obligation by reference to the relevant contractual provisions.

(c) Article 9 of the Condescendence

Since I have taken the view that the pursuers' averments concerning the implied term contended for in article 4 of the condescendence are irrelevant, the separate prescription point taken in respect of them does not arise. Had the point remained live, I would have taken the view that the defenders' prescription argument was not well-founded. Plainly where the obligation founded on before the expiry of the quinquennium rests on a wholly different legal principle from that on which the obligation relied upon after the expiry of the quinquennium rests (as in N. V. Devos Gebroeder v Sunderland Sportswear Limited), the plea of prescription will fall to be sustained. In the present case, however, the pursuers during the quinquennium sought to base their claim on the proposition that the defenders had acted in breach of an implied term of the contract. If the implied term originally asserted and the one now asserted had been wholly different, the plea of prescription would no doubt have been well-founded. In my view, however, not every reformulation of the obligation founded on will result in the plea of prescription being upheld. In the present case, I would have been inclined to regard the change in formulation of the implied term founded upon as being insufficient in degree to support the conclusion that no relevant claim had been made within the quinquennium in respect of the obligation now founded upon. In my view the original and the present versions of the implied term are concerned in substance with the same point. I would therefore have been disinclined to sustain the plea of prescription in relation to the case based on the implied term. In the event, because of my decision to exclude the averments about the implied term from probation on the ground that they are irrelevant, the point does not arise.

III. Relevancy

In addition to the points of specification already discussed, Mr Mure advanced three further submissions attacking aspects of the relevancy and specification of the pursuers' pleadings.

(1) Article 6 of the Condescendence - Delay to Other Subcontractors.

After averring that in April and May 1985 the defenders revised the sub-contract programme as detailed in their programme W/FB/2400/1A dated 1 May and intimated on 2 May, the pursuers go on to aver:

"Other Sub-contractors working in conjunction with the pursuers in the ceiling void and the preceding Sub-contractors were also advised by the defenders to revise their respective programmes. This resulted in Sub-contractors working to a reduced or accelerated programme which resulted in the Sub-contract works being delayed and disrupted due to the revision of the primary operations, re-sequencing of operations, the maintaining of substantial completion dates for the Sub-contract works and the reduction of time allocated to the pursuers' scope of works during the duration of the pursuers' primary and secondary operations."

Mr Mure submitted that those averments were lacking in specification in that they did not aver (i) which other sub-contractors were advised by the defenders to revise their programmes, (ii) what the changes to each other sub-contractor's programme were, and (iii) how those changes led to delay and disruption of the pursuers' works.

Mr Murphy submitted that the averments gave adequate notice to the defenders who, as management contractors, know what instructions they issued to which sub-contractors, and how those instructions were likely to affect the pursuers' operations.

While the pursuers' pleadings could have been more specific than they are, I am not persuaded that the lack of specification is such as to cause the defenders serious prejudice. As the management contractor, they must know which other subcontractors were working in conjunction with or immediately before the pursuers in the ceiling void. They must likewise know which other sub-contractors they "advised" to revise their programmes. They are, in my view, capable of drawing their own conclusions as to whether their instructions to other sub-contractors had the effect of delaying and disrupting the pursuers' operations. I am therefore not persuaded that this part of the pursuers' pleadings should be excluded from probation.

(2) Article 6 of the Condescendence - The Causes of Delay, and

(3) Article 9 of the Condescendence - Global Claim

At page 47C of the Closed Record (as further amended) the pursuers aver that their "activities were severely delayed, disrupted and prolonged in consequence of inter alia" a list of ten factors. Mr Mure submitted, in the first place that the use of the expression "inter alia" implied that there were other factors, which the pursuers had failed to specify. Some of the factors listed were simply events, which the pursuers did not relate to any specified failing on the part of the defenders. The factors were themselves inadequately specified, for example item (2) - "Damage by other trades during and after installation of the suspended ceilings" - did not specify which other contractors, when the damage was caused, or where and what the damage was. The purported further specification given in the averment at page 48E that "The principal delaying events are tabulated by reference to the primary and secondary operations and give the cumulative period of delay on a level-by-level basis", and in the relative table in Schedule 1 (pages 76-82), was inadequate. It was not clear how the Schedule related to the list of ten factors at page 47-48. Many of the items in the Schedule were themselves too vaguely expressed to give fair notice of what was being alleged.

In article 9 the pursuers aver that the "principal delaying events ... were as a result of the defenders' ... breach of contract", and go on to identify three categories of breach of contract. Mr Mure submitted, however, that no attempt had been made to relate the breaches of contract alleged to the individual delaying events earlier condescended upon. He submitted that that failure constituted a fundamental failure of specification which ought to lead to dismissal of the claim. He cited Wharf Properties Limited v Eric Cumine Associates (No. 2) (1991) 52 BLR 1. In that case, which concerned a very large development in Hong Kong, the plaintiffs claimed that the defendants had failed properly to manage, control, co-ordinate, supervise and administer the work of contractors and sub-contractors as a result of which the project was delayed. The pleadings did not state how the six specific periods of delay that were relied upon were caused by the defendants' breaches of contract. On being ordered to give particulars, the plaintiffs pleaded that due to the complexity of the project, the inter-relationship and very large number of delaying and disruptive factors (which had been pleaded) and their inevitable "knock-on" effects, etc, it was impossible at that stage to identify and isolate individual delays in the manner requested and that it would not be known until trial which, if any, variations and other events might have been causative of the delays. In the Hong Kong Court of Appeal, it was held that the statement of claim should be struck out as embarrassing the fair trial of the action. On appeal, the Judicial Committee of the Privy Council upheld that decision. Lord Oliver of Aylmerton, giving the advice of the Board, said (at 23):

"It is for the plaintiff in an action to formulate his claim in an intelligible form and it does not lie in his mouth to assert that it is impossible for him to formulate it and that it should, therefore, be allowed to continue unspecified in the hope that, when it comes to trial, he may be able to reconstitute his case and make good what he then feels able to plead and substantiate."

In his submissions Mr Murphy dealt with these two aspects of the defenders' submissions together. The structure of the pursuers pleadings was, he said, that first the detail of the delaying events was given in the Schedule, which distinguished between primary (first fix) and secondary (second fix) operations, analysed the events on a level-by-level basis, gave a description of each delaying event, and set out the contribution which each event was said to have made to the over-all delay. Then, at pages 47 to 48 the delaying events were analysed into ten categories. In article 9 the breaches of contract said to have caused the delaying events were set out under three headings, (a) failure to provide access, (b) failure to provide information and instructions and (c) failure to control and co-ordinate other sub-contractors. Finally, in article 10 the loss claimed was set out, and could be seen to be proportionate to the length of the delay. The pleadings so structured gave, he submitted, adequate specification to the defenders. Wharf Properties Limited v Eric Cumine Associates (No. 2) was a decision on the pleadings in the particular case, and settled no general principle about such claims. He recognised that so-called "global" or "composite" claims had been the subject of more or less adverse comment (e.g. Hudson's Building and Engineering Contracts § 8-200 et seq; c.f. Keating on Building Contracts at 474-475), but cited British Airways Pension Trustees Limited v Sir Robert McAlpine and Sons Limited (1994) 72 BLR 26 for the warning by Saville LJ (at 33-34) against requiring excessive particularisation in pleadings.

It is in my view convenient to deal with these points together. Although the pursuers' pleadings are not set out in a way that encourages such an approach, it is in my view sound to analyse their content in the way Mr Murphy did. The detail of the delaying and disruptive events founded upon is to be found in the Schedule. In the Schedule, each delaying event has attributed to it a period by which it is said to have delayed the progress of the sub-contract works, identified both by its individual length and by the period (in terms of contract week numbers) which it affected. It can thus be seen when there were more delaying events than one affecting the same period, and how the individual delaying events contributed to the total. The delaying events are categorised in the list on pages 47 and 48. The way in which these categories are expressed enables them, in my view, to be related in turn to the three categories of breach of contract specified in article 9. In the result the pursuers have, in my view, made a reasonable attempt to specify what caused the delay and disruption, how those events are attributable to breach of contract on the part of the defenders, and what causal relationship there is between the individual events (if proved to have occurred and to have been caused by the defenders' breach of contract) and the loss claimed. While it is possible on close examination of the pursuers' pleadings to identify matters that might have been specified in more detail, I am of opinion that what has been said is sufficient to give the defenders, who were after all the management contractors, fair notice of the case which the pursuers seek to make against them.

In my view the present case is very far from suffering the defects which were present in the plaintiffs' pleadings in Wharf Properties Limited v Eric Cumine Associates (No. 2). As was pointed out by Lord Oliver of Aylmerton (at 8) that was a decision on the pleadings in the particular case. The general point made, although expressed in the language of a different system of pleading, seems to me to have been concerned with the familiar need for fair notice that underlies our rules about specification. Applying the Scottish approach to specification, I am of opinion that the pursuers' pleadings in support of the third crave are adequate to be remitted to proof before answer.

That general conclusion is subject to this minor qualification. I do not consider that the pursuers are entitled to go to proof on averments that deploy the phrase "inter alia" or refer to the "principal delaying events", and to expect as a result to be able to rely on additional matters not mentioned in the pleadings. To make it clear that the pursuers are not entitled to open matters up in that way, I shall exclude from probation the words "inter alia" where they occur in lines 12 and 21 of page 47, and the word "principal" where it occurs in line 21 of page 48 and in the heading of the Schedule.

(4) Article 11 of the Condescendence - Accelerative Measures

In support of the fourth crave the pursuers aver that they have incurred additional costs as a consequence of accelerative measures instructed by the defenders which constituted a variation. Mr Mure pointed out that there was no plea-in-law supporting this crave, but properly declined to take that formal point. He submitted that the pursuers had failed to make it clear how the events relied upon, the issue of various instructions to the pursuers to deploy more labour, (i) constituted an accelerative measure and (ii) amounted to a variation. The only contractual provision about acceleration was in condition 9(ii), where the management contractor is empowered to accelerate by the employment of other contractors at the sub-contractor's expense. The instructions founded on, to deploy additional labour in order to adhere to the programme, did not constitute a variation within the meaning of condition 1(t) of the sub-contract.

Mr Murphy's submission was that the accelerative measures ordered by the defenders were clearly set out in the pursuers' averments. They involved a requirement imposed by the defenders that the pursuers should deploy labour in excess of that contemplated in their tender. That, he submitted, was capable of being regarded as a variation.

I have some difficulty in understanding the pursuers' characterisation of the instructions mentioned in article 11 as accelerative measures. As I understand the averments the defenders are said to have instructed the pursuers to deploy additional labour to secure execution of the works in accordance with the existing programme, not to have ordered any steps designed to achieve completion earlier than previously contemplated. Be that as it may, however, it seems to me that the crux of this claim is the assertion that the instructions given constituted a variation. In condition 1(t), however, "variation" is said to mean:

"the alteration or modification of the design quality or quantity of the Sub-Contract Works and includes the addition omission or substitution of any work the alteration of the kind or standard of any of the materials or goods to be used in the Sub-Contract Works and the removal from the Site of any work materials or goods executed or brought thereon by the Sub-Contractor his servants or agents or any sub-contractor of the Sub-Contractor his servants or agents for the purpose of the Sub-Contract Works other than work materials or goods which are not in accordance with the Sub-Contract."

In my view the comprehensibility of that provision would have been improved if some punctuation had been deployed, but, reading it as it stands, I do not see how the instructions founded upon by the pursuers can be regarded as falling within its scope. In my view the pursuers have not relevantly averred that these instructions constituted variations within the meaning of the sub-contract. In my view the averments in Article 11 should be excluded from probation, and consequently decree of dismissal should be pronounced in respect of the fourth crave.

Result

In these circumstances, I shall:

  1. sustain the defenders' second plea-in-law to the extent of -
    1. excluding from probation -
      1. the pursuers' averments in article 4 of the condescendence, and from article 9 the words "and also of the implied term specified in Article 4 hereof" where they occur in lines 9 and 10 thereof and again in lines 13 and 14 thereof, and the words "and the implied term specified in Article 4 hereof" where they occur in lines 18 and 19 thereof;
      2. in article 6 of the condescendence the words "inter alia" where they occur in lines 12 and 21 of page 47 of the Closed Record (as further amended), and the word "principal" where it occurs in line 21 of page 48 and again in the heading of Schedule 1 appended to the Initial Writ;
      3. the pursuers' averments in article 7 of the condescendence;
      4. in article 8 of the condescendence the words "valued and" in line 17 of page 62 of the Closed Record (as further amended), and the words "and 17" in line 18 of that page; and
      5. the pursuers' averments in article 11 of the condescendence; and
    2. granting decree of dismissal in respect of the first and fourth craves of the Initial Writ;
  2. repel the defenders' eighth plea-in-law; and
  3. quoad ultra allow a proof before answer.

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