Vinci Construction UK Limited v Eastwood and Partners (Consulting Engineers) Limited & Anor
[2023] EWHC 1899 (TCC)
Peabody Trust v National House-Building Council
6 August 2024
[2024] EWHC 2063 (TCC)
High Court
A housing association sued an insurer for extra costs to finish building homes after the original builder went bankrupt. The insurer said the claim was too late. The judge decided the clock only started when the housing association *actually* had to pay more, not when the builder went bankrupt, meaning the claim might be in time. The judge also said a separate claim for security costs didn't automatically make the whole claim invalid.
Key Facts
- •Peabody Trust (Claimant) sued National House-Building Council (NHBC, Defendant) for breach of insurance policies.
- •The policies covered extra costs to complete housing units due to contractor insolvency.
- •Contractor Vantage went into administration on 29 June 2016.
- •Peabody issued its claim on 24 July 2023, over six years after Vantage's insolvency.
- •NHBC argued the claim was time-barred under the six-year limitation period of the Limitation Act 1980.
- •The dispute centered on when the limitation period began to run.
Legal Principles
In contract claims, time does not run from the date of loss or when a claimant knew of the claim.
Limitation Act 1980, section 5
A claim under an indemnity insurance policy arises as soon as the insured event occurs, not when loss is manifested.
Callaghan v Dominion Insurance Co Ltd [1997] 2 Lloyd’s Rep 541; Colinvaux & Merkin’s Insurance Contract Law at C-0236
A claimant must show its action is not time-barred if limitation is raised by a defendant.
McGee on Limitation Periods (9th edition), paragraph 21.016
The court must consider whether a claimant has a realistic prospect of success in a summary judgment application.
Easyair v Opal Telecom [2009] EWHC 339 (Ch)
Courts should determine short points of law or construction summarily if all necessary evidence is available.
Global Asset Capital Inc v Aabar Block SARL [2017] EWCA Civ 37
In determining when a cause of action accrues under an insurance policy, the court must objectively interpret the policy language considering the background knowledge reasonably available to the parties.
Financial Conduct Authority v Arch Insurance (UK) Ltd [2021] UKSC 1
Outcomes
The court dismissed NHBC's application for summary judgment.
The court found that the limitation period began when Peabody had to pay more to complete the units, not when Vantage went into administration. The insured peril was the 'having to pay more', caused by insolvency, not the insolvency itself.
The court rejected NHBC's alternative argument that a claim for site security costs, incurred in 2016, rendered the whole claim time-barred.
The court found the site security cost claim (under a separate policy clause) was potentially independent from the main claim for additional construction costs and did not automatically time-bar the principal claim.
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