John Sisk Son Ltd v Lawter Products B. v

• Jurisdiction: Ireland
• Judge: Mr JUSTICE FINLAY
• Judgment Date: 01 January 1977
• Neutral Citation: 1976 WJSC-HC 1332
• Court: High Court
• Date: 01 January 1977

1976 WJSC-HC 1332

THE HIGH COURT

1124/1976

JOHN SISK & SONS LTD v. LAWTER PRODUCTS B.V.

JOHN SISK AND SON LIMITED

.v.

LAWTER PRODUCTS B.V.

1 Mr JUSTICE FINLAY DELIVERED THE 15thNOVEMBER 1976.

2 This is an application by the plaintiffs to enter Summary Judgment for the sum of £168,537.

3 The amount claimed is the total of three interim certificates dated the 22nd October 1975; the 2nd February 1976 and the 19th March 1976 issued by the architect under a building contract made between the plaintiffs and the defendants on the 22nd October 1974 for the erection by the plaintiffs for the defendants of a factory at Granagh County Kilkenny.

4 The defendants seek to resist the entry of judgment on foot of an affidavit by a director of the defendant company alleging that the plaintiffs had been in breach of their contract by failing to complete the work specified by the agreed dates and asserting that as a result the defendant company has suffered:

5 (a) A loss of production which is estimated in terms of a loss in revenue of £250,000 per month.

6 (b) A loss of profit estimated in terms of a total loss of gross profits in the sum of £300,000.

7 (c) Currency exchange losses and a loss of exemption from tax which are not even by way of estimate quantified.

8 (d) A specific loss of one batch of production quantified at £5,175.

9 The affidavit also contains allegations of losses in no way quantified which it is stated were suffered by what is described as a parent company and which obviously are quite irrelevant to these proceedings.

10 The contract between the parties was in the standard form issued by the Royal Institute of Architects of Ireland in 1966 and contained the following relevant clauses.

11 Clause 29 (a) which reads:

12 "At the period of interim certificates named in the appendix the contractor shall (subject to Clause 15 (c) of these conditions) on production of a detailed progress statement be entitled to receive within fourteen days a certificate from the architect of the amount due to him from the employer, which certificate shall include any amounts allowed in respect of sub-contracts, and the architect on request shall specify and show separately the amount (if any) allowed in respect of each nominated sub-contractor and after issue of such certificate the "contractor shall be entitled to payment thereon by the employer upon presentation within the period for honouring certificates named in the appendix".

13 Clause 15 (c) of the conditions referred to in this sub-clause read as follows:

"Before any certificate is issued to the contractor he shall, if requested by the architect, furnish to him reasonable proof that all nominated sub-contractors" accounts included in previous certificates have been duly discharged in default whereof the employer may pay such accounts upon a certificate of the architect and deduct the amount so paid from any sums due or to become due to the contractor."

14 The period of interim certificate named in the appendix was four weeks and the period for honouring certificates was fourteen days.

15 The next relevant clause was 29 (b) which reads as follows:

16 "The amount stated as due in an interim certificate shall be the total value of the works duly executed and of the materials and goods specially prepared for the works delivered upon the site for use therein up to and including a date not more than seven days prior to the date upon which the contractor shall have applied for the said certificate less an amount to be retained by the employer (as hereinafter provided) and less "any instalments previously certified under this Clause."

17 Clause 15 (b) which also might have some relevance provides that the sums directed by the architect to be paid to the nominated sub-contractors should be paid by the contractors within seven days of receipt of payment on the architects certificate.

18 Clause 28 (a) provides that if the employer does not pay the contractor within the "period for honouring certificates" the contractor may after twenty eight days charge interest to the employer at the current bank rate of interest on overdrafts or may suspend the works.

19 Clause 24 (a) provides that if the contractor fails to practically complete the works by the date for completion or within any extended time the contractor should pay to the employer the sum named in the appendix as liquidated and ascertained damages.

20 That sum was named as £200 per week.

21 Clause 31 provides for the arbitration of disputes and claims with a proviso that such references to arbitration shall not, apart from exceptions irrelevant to these issues, be opened until after the practical completion of the works. It gives however each party to the contract a clear right to refer disputes to arbitration.

22 The issue of law which arises on these facts and on these terms in the contract shortly is as to whether the employer upon the due issue of an interim certificate is entitled to set-off against the sum so found due, claims against the contractor quantified but not yet proved...