Ice Architects Ltd v Empowering People Inspiring Communities (Rev 1)

In a claim for payment for work or services, the cause of action ordinarily accrues when the work is completed. That position changes only where the contract contains a special term making a later event a condition of the entitlement to payment. Clear words are required before the court will construe an agreement as giving the creditor control over when limitation begins.

An agreement providing for invoices to be issued periodically and paid within a stated period normally concerns the mechanics of billing and payment. It does not, without more, postpone accrual of the cause of action. The court must objectively construe the agreement in its full commercial context.

ICE, an architectural practice, appealed against a preliminary-issue judgment of HHJ Parfitt dated 13 October 2017. The judge held that ICE’s claim for the balance of an invoice was statute barred under section 5 of the Limitation Act 1980.

The parties’ 10 July 2007 letter provided that ICE would invoice monthly for work completed to date and that EPIC would endeavour to pay within 30 days of receipt. ICE argued that its cause of action accrued only after that 30-day period. The central issue was whether those terms displaced the ordinary rule that entitlement to payment for services arises when the work is completed.

1. The appeal was dismissed. The claim was statute barred because the cause of action accrued when the relevant design work was completed, not 30 days after the invoice was received.
2. The ordinary rule, identified in Coburn v Colledge [1897] 1 QB 702, is that a provider’s right to payment arises when requested work has been done, unless the agreement contains a special term to the contrary. A contractual or statutory provision may instead make a certificate, assessment or other event a condition precedent to entitlement.
3. The 10 July 2007 letter was objectively an agreement about the mechanics of billing and payment. Monthly invoices were commercially intelligible because the project was ongoing and EPIC needed to monitor expenditure. The reference to payment within 30 days did not state that ICE’s substantive entitlement arose only when that period expired.
4. Clear words are required before the court will infer that the parties intended to give a creditor control over the commencement of limitation or to create satellite disputes about invoicing, delivery and payment. The language used here did not meet that standard.
5. Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2005] EWCA Civ 814 and Legal Services Commission v Henthorn [2011] EWCA Civ 1415 were distinguishable examples where the amount due could not be identified until certification or taxation. No equivalent uncertainty existed here. Levin v Tannenbaum [2013] EWHC 4457 illustrated the same objective construction exercise, although it concerned guarantees.
6. The possibility of alternative enforcement, considered in In re A Debtor [1993] Ch 286, did not alter when ICE’s cause of action accrued. The parties were invited to draw up the appropriate order.

• High Court (Queen’s Bench Division): On appeal from the preliminary-issue judgment of HHJ Parfitt dated 13 October 2017, the court dismissed ICE’s appeal and upheld the conclusion that the claim was statute barred.