London & Regional (St George’s Court) Ltd v Ministry of Defence & Anor
Citation: EWHC 526 (TCC); (2008) 152(14) S.J.L.B. 28; [2008] All E.R. (D) 249 (Mar)
Nature of case:
London & Regional (“L&R”) had made an Agreement For Lease with the MOD, subletting property to the MOD and agreeing to carry out refurbishment works. This agreement included provision for the MOD to request variations to the refurbishment works, and that the MOD would “pay the costs and incidental expenses of the Tenant’s Variations … as they are incurred as to which (a) in respect of the costs of the Tenant’s Variations payment is to be made against [L&R’s] agent’s certificates of the costs and incidental expenses …”. A third party, S, was engaged to carry out the works.
Disputes subsequently arose, including a question as to liability for Tenant’s Variations. L&R reached a settlement with S, including payment for a sum in full and final settlement of all sums due from the L&R to S, with L&R’s claim against the MOD being specifically excepted, and entitling S to pursue that claim against the MOD on L&R’s behalf. The present hearing dealt with 2 preliminary issues arising out of this agreement, namely:
- whether a certificate from L&R’s agent in respect of Tenant’s Variations was a condition precedent to the MOD’s liability for such variations; and
- whether the settlement agreement between the L&R and S provided the MOD with a defence to the claims in the present proceedings.
Coulson J answered both questions in the negative. In particular (i) a passing reference to a certificate was insufficient to render such a certificate a condition precedent to liability, such an intention had to be demonstrated by express words; and (ii) the agreement between L&R and S simply ensured that S, as the party who had completed the works and suffered the loss, could pursue the MOD to make good that loss, and “was a sensible commercial resolution of the disputes between the parties, and … precisely the sort of agreement which this Court should encourage parties to reach.”
