Russell & Anor v Stone (t/a PSP Consultants) & Ors

On an interlocutory limitation application, claims should be struck out only where it is plain and obvious that they are statute-barred. A standstill agreement must be construed as a whole. Where its operative provisions suspend time and prohibit proceedings during the standstill period, the long-stop date is inclusive and proceedings may be issued after that period ends. General wording in recitals cannot displace clear operative provisions. Successive standstill agreements may operate continuously, so that entering a later agreement does not remove protection obtained under earlier agreements unless clear words produce that result.

The claimants sought damages arising from quantity surveying and project management services provided for extensive building works. The defendants applied under the Civil Procedure Rules 1998 to strike out three groups of allegations as statute-barred. The application concerned the accrual dates of contractual and tortious causes of action, the construction and interaction of three standstill agreements and later side letters, and whether the claim against the second defendant company should be struck out.

The defendants argued that proceedings had to be issued by 30 November 2016 and that the later standstill agreement removed the protection afforded by the earlier agreements. The central issues were the effect of the agreements and whether the claims were plainly and obviously out of time.

1. Application and accrual. The court considered the strike-out and summary-judgment provisions of the Civil Procedure Rules 1998. A limitation-based strike-out is generally unsuitable unless the claim is plainly and obviously statute-barred. The contractual cause of action concerning the tender documents accrued on 9 November 2009. The tortious cause of action concerning those documents, and the contractual and tortious causes of action concerning the tender analysis and letter of intent, accrued on 22 June 2010.
2. Construction of the agreements. The three agreements suspended, rather than extended, limitation time. The operative wording repeatedly referred to suspension, and clause 2.4 prohibited issuing or serving proceedings during the relevant period. The defendants’ construction would have required the claimants to breach clause 2.4 by issuing proceedings on 30 November 2016. Proceedings issued on 1 December 2016 were therefore timely.
3. Recitals and operative provisions. References to extending time in Recital B described the parties’ objective and did not alter the operative suspension mechanism. If the recital and operative provisions were inconsistent, the operative provisions prevailed.
4. Successive agreements. The agreements had to be construed together. The claimants did not lose earlier protection by entering into later agreements. Clear words would have been required for that result.
5. Second defendant. The claims against the second defendant were not struck out at that stage because the issue was raised late and disclosure might clarify its role.

The application was dismissed. Consequential matters were reserved.