CONSULTING CONCEPTS INTERNATIONAL INC v CONSUMER PROTECTION ASSOCIATION (SAUDI ARABIA)

In claims for payment for work or services, the cause of action ordinarily accrues when the work is completed. Contractual provisions concerning invoices or a period for payment alter that result only where they clearly make payment, rather than merely enforcement, conditional upon a later event. A procedural bar to proceedings does not generally postpone the running of limitation time.

Clear words are required before a contract gives the creditor control over when limitation begins. On an application to strike out or for summary judgment, the court determines the case as pleaded and assumes the pleaded facts are true. An extension of time may be granted for a serious procedural default where the reason for default and all the circumstances justify relief.

CCI brought proceedings against CPA for payment under a 2013 consultancy agreement, an alleged further agreement and an undertaking to pay Saudi Riyals 161,505,000. CPA applied to strike out the claim or obtain reverse summary judgment, arguing that the claims were time-barred or had no real prospect of success. CCI also sought a retrospective extension of time for serving its Particulars of Claim.

The central issues were when causes of action for payment for services accrued; whether the undertaking created a separate or timely claim; whether the pleaded claims could be supported by evidence or submissions advancing an unpleaded case; and whether the procedural default should be relieved.

1. Strike-out and summary judgment. The applications were determined on the basis that the pleaded facts were true. The court considered the pleaded case, not a different case advanced through evidence or submissions without an application to amend.
2. Accrual and limitation. In the absence of a contractual provision producing a different result, a cause of action for payment for work or services accrues when the work is completed. The question remains one of contractual construction.
3. The court distinguished conditions precedent to the right to payment from procedural conditions governing enforcement. A provision requiring an invoice and payment within 90 days concerned the mechanics of billing and payment. It did not clearly postpone accrual of the cause of action. The claims under the invoices were therefore time-barred.
4. The undertaking did not improve CCI’s position. If it related to past work, the claim was time-barred. If it was a prepayment for future work, the cause of action arose on 31 December 2013, but recovery failed because the pleaded and evidenced case showed that the future services were never performed, resulting in total failure of consideration. A composite analysis made no difference.
5. The claims for expenses incurred in seeking payment were no better than the underlying claims. The unpleaded claim for repudiatory breach could not be relied upon.
6. The failure to serve Particulars of Claim was serious and significant, but the Denton criteria supported relief. The claimant’s principal reason for default was its director’s serious illness, the period of default was modest, there was no prejudice to the defendant or administration of justice, and this was the first application for relief. The retrospective extension was granted.
7. CPA’s strike-out application nevertheless succeeded. The Claim Form and Particulars of Claim were struck out.