Inframatrix Investments Ltd. v Dean Construction Ltd.

A contractual time bar should be construed to give it a commercially coherent operation. Where no certificate of practical completion of the services exists, the limitation period may run from the contractor’s last performance of services in relation to the project. Participation in without prejudice, pre-action negotiations does not itself constitute contractual performance or restart the limitation period. Waiver by election requires inconsistent alternative rights. Waiver by estoppel requires conduct reasonably understood as abandoning the right and circumstances making reliance on it unconscionable.

The defendant applied under CPR 24 to strike out a claim for allegedly negligent roofing and cladding workmanship. The building contract contained a one-year limitation clause, running either from practical completion of the services or, where that date did not occur, from the contractor’s last performance of services in relation to the project.

The claimant argued that the relevant trigger had not occurred and that the defendant had waived or was estopped from relying on the clause through correspondence, a site meeting and offers of remedial work during pre-action negotiations. The central issues were the construction of the alternative trigger, whether later negotiations amounted to contractual services, and whether they established waiver.

1. Construction. The application under CPR 24 succeeded. Clause 17.4 was not to be read in the limited manner contended for by the claimant. Where there was no certificate of practical completion of the services, the one-year period expired 12 months after the contractor last performed services in relation to the project. The narrower construction would flout business common sense.
2. Last performance of services. The site meeting and subsequent report and offers occurred during without prejudice negotiations conducted under the Construction Pre-Action Protocol. They were intended to avoid litigation and did not amount to performance of services under the contract. Had remedial work actually been accepted and carried out, a fresh limitation period would have arisen in relation to that work.
3. Waiver. Waiver by election had no application because the defendant did not possess inconsistent alternative rights. Waiver by estoppel required the ingredients of estoppel. The negotiations, meeting and limited offers did not amount to a representation by conduct that the defendant would abandon clause 17.4, nor would it be unconscionable to permit reliance on it. The case was materially different from CWS v Chester-le-Street DC [1998] EGLR 11.
4. The claim was struck out. The judge declined to grant judgment on the counterclaim. His present view, expressed without argument, was that clause 17.4 did not prevent the claimant from raising defective workmanship by way of set-off against sums claimed under the contract.

First-instance decision. No prior or appellate decision was stated in the judgment.