Sleaford Building Services Limited v Isoplus Piping Systems Limited
[2023] EWHC 969 (TCC)
ISG Retail Limited v FK Construction Limited
18 April 2024
[2024] EWHC 878 (TCC)
High Court
Two construction companies were fighting over money. A judge decided there were too many disagreements about the facts, so he wouldn't make a decision using the simpler, faster Part 8 court process. Instead, the case will proceed through the more complex Part 7 process which allows for a full examination of the facts.
Key Facts
- •ISG Retail Limited (ISG) was the main contractor and FK Construction Limited (FK) was the subcontractor for the construction of six industrial units.
- •A dispute arose regarding FK's Application for Payment 21 (AFP21), specifically concerning an 188-day extension of time (EoT) and £198,000 in prolongation costs awarded to FK by adjudicator Mr. Molloy.
- •ISG argued that FK's entitlement to the EoT was conditional upon compliance with clause 9(5) of the subcontract, which FK allegedly breached.
- •FK denied breaching clause 9(5), alternatively arguing compliance, waiver, and estoppel.
- •ISG brought a Part 8 claim seeking declarations on the condition precedent nature of clause 9(5), FK's compliance, and the inapplicability of waiver/estoppel.
- •The parties have a history of extensive litigation.
Legal Principles
In Part 8 claims, the claimant must establish that a substantial factual dispute is unlikely.
CPR 8.1(2)
The court may convert a Part 8 claim to Part 7 proceedings if a substantial factual dispute arises.
CPR 8.1(4)
Part 8 proceedings are designed for determining claims without elaborate pleadings.
White Book 8.0.1; ING Bank NV v Ros Roca SA [2012] 1 WLR 472
Whether a contractual term is a condition precedent is a matter of construction.
Obrascon Huarte Lain SA v Her Majesty’s Attorney General for Gibraltar [2014] EWHC 1028 at [311]-[313]
A time limit clause may be directory rather than mandatory; breach may sound in damages, not a condition precedent.
Diab v. Regent Insurance Co Ltd [2007] 1 WLR 797 at [14]-[17]
Part 8 proceedings are generally unsuitable for trying estoppel issues.
ING Bank NV v. Ros Roca SA [2011] EWCA Civ 353
Requirements for estoppel by convention include a shared assumption, responsibility for the assumption, reliance, subsequent dealing, and detriment/benefit.
The Law of Waiver, Variation and Estoppel (3rd Ed 2012 Wilken & Ghaly) at paragraph 10.01; Jawaby Property Investment Limited v Interiors Group Ltd [2016] EWHC 557 (TCC)
Waiver can operate through equitable estoppel (pre-performance) or election to affirm (post-performance).
Westbrook Resources Ltd v Globe Metallurgical Inc [2009] EWCA Civ 310 at [12]
Outcomes
The Part 8 claim was dismissed.
The court found substantial disputes of fact likely regarding FK's breach of clause 9(5) and the applicability of waiver/estoppel. The court deemed it inappropriate to decide the construction points without addressing breach and waiver/estoppel simultaneously.
No declarations were made.
The presence of substantial factual disputes rendered the Part 8 procedure unsuitable.