RECLAIMING MOTIONS BY NETWORK RAIL INFRASTRUCTURE LTD AGAINST FERN TRUSTEE 1 LTD AND OTHERS AND THE SCOTTISH MINISTERS AGAINST McLAUGHLIN & HARVEY LTD AND OTHERS [2022] ScotCS CSIH_32 (08 July 2022)

RECLAIMING MOTIONS BY NETWORK RAIL INFRASTRUCTURE LTD AGAINST FERN TRUSTEE 1 LTD AND OTHERS AND THE SCOTTISH MINISTERS AGAINST McLAUGHLIN & HARVEY LTD AND OTHERS [2022] ScotCS CSIH_32 (08 July 2022)

Clause 3.27 of the Remedial Works Agreement, when read in context, unambiguously gives the owners sole discretion to determine whether remedial works have been satisfactorily completed for the purposes of issuing an Owner's Completion Notice. The obligation to 'liaise' with tenants is limited to consultation and does not require the owners to include tenants' views or secure their agreement. The tenants have no contractual right to challenge the owners' decision or to insist that their concerns be taken to adjudication. The Scottish Ministers have not pled a relevant stand-alone case for breach of the RWA by the contractors.

Citation
[2022] ScotCS CSIH_32
Parties
Pursuer and Reclaimer: Network Rail Infrastructure Limited; Defender and Respondent: Fern Trustee 1 Limited; Defender and Respondent: Fern Trustee 2 Limited; Defender and Respondent: McLaughlin & Harvey Limited; Pursuer and Reclaimer: The Scottish Ministers
Jurisdiction
Scotland
Judgment Date
08 July 2022
Procedural Posture
Reclaiming Motion (appeal) / Appeal From Commercial Judge's Interlocutors Dated 21 October 2021
Outcome
Reclaiming motions refused; commercial judge's interlocutors adhered to.
Legal Topics
Contractual Interpretation, Remedial Works Agreements, Collateral Warranties, Completion of Works, Defects Liability, Good Faith in Contract Performance
Contract Law Construction Law Contractual Interpretation Remedial Works Agreements Collateral Warranties Completion of Works Defects Liability Good Faith in Contract Performance

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Parties

Network Rail Infrastructure Limited

Pursuer and Reclaimer

Fern Trustee 1 Limited

Defender and Respondent

Fern Trustee 2 Limited

Defender and Respondent

McLaughlin & Harvey Limited

Defender and Respondent

The Scottish Ministers

Pursuer and Reclaimer

Procedural Posture

Reclaiming Motion (appeal) / Appeal From Commercial Judge's Interlocutors Dated 21 October 2021

Legal Issues

  1. 1 Whether tenants have a contractual right to insist that their views on completion of remedial works be included in the Owner's Completion Notice under the Remedial Works Agreement (RWA)
  2. 2 Whether owners are obliged not to agree that completion has been achieved until tenants are content
  3. 3 Whether the Scottish Ministers have a stand-alone right to claim against contractors for breach of the RWA

Ratio Decidendi

Clause 3.27 of the Remedial Works Agreement, when read in context, unambiguously gives the owners sole discretion to determine whether remedial works have been satisfactorily completed for the purposes of issuing an Owner's Completion Notice. The obligation to 'liaise' with tenants is limited to consultation and does not require the owners to include tenants' views or secure their agreement. The tenants have no contractual right to challenge the owners' decision or to insist that their concerns be taken to adjudication. The Scottish Ministers have not pled a relevant stand-alone case for breach of the RWA by the contractors.

Court Disposition

Reclaiming motions refused; commercial judge's interlocutors adhered to.

Orders

  • Refusal of reclaiming motions by Network Rail Infrastructure Limited and the Scottish Ministers
  • Adherence to the commercial judge's interlocutors dated 21 October 2021