City Link Development Company Ltd v. Lanarkshire Housing Association Ltd [2005] ScotCS CSOH_76 (16 June 2005)

City Link Development Company Ltd v. Lanarkshire Housing Association Ltd [2005] ScotCS CSOH_76 (16 June 2005)

The court held that the minute of agreement was intended to operate as an over-arching contract governing the entire project, including the entitlement to indexation for works carried out more than two years after the Phase 1 contract. The absence of an indexation clause in the Phase 2 and 3 contracts did not supersede the pursuers' entitlement under the minute of agreement. Alternatively, the contracts should be rectified to reflect the parties' true agreement regarding indexation.

Citation
[2005] ScotCS CSOH_76
Parties
Pursuer: City Link Development Company Limited; Defender: Lanarkshire Housing Association Limited
Jurisdiction
Scotland
Judgment Date
16 June 2005
Procedural Posture
Commercial Contract Dispute / First Instance Judgment
Outcome
Declarator granted in favour of the pursuers; alternatively, rectification ordered.
Legal Topics
Interpretation of Contracts, Rectification, Building Contracts, Indexation Clauses, Declarator, Law Reform (miscellaneous Provisions) (scotland) Act 1985
Contract Law Construction Law Interpretation of Contracts Rectification Building Contracts Indexation Clauses Declarator Law Reform (miscellaneous Provisions) (scotland) Act 1985

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Parties

City Link Development Company Limited

Pursuer

Lanarkshire Housing Association Limited

Defender

Procedural Posture

Commercial Contract Dispute / First Instance Judgment

Legal Issues

  1. 1 Whether the pursuers are entitled to indexation of the contract sum for works undertaken more than two years after the Phase 1 contract under clause 1.1.3 of the minute of agreement
  2. 2 Whether the Phase 2 and Phase 3 contracts should be rectified to include an indexation provision in accordance with the parties' agreement

Ratio Decidendi

The court held that the minute of agreement was intended to operate as an over-arching contract governing the entire project, including the entitlement to indexation for works carried out more than two years after the Phase 1 contract. The absence of an indexation clause in the Phase 2 and 3 contracts did not supersede the pursuers' entitlement under the minute of agreement. Alternatively, the contracts should be rectified to reflect the parties' true agreement regarding indexation.

Court Disposition

Declarator granted in favour of the pursuers; alternatively, rectification ordered.

Orders

  • The pursuers are entitled to have the contract sum in the Phase 2 and Phase 3 contracts adjusted in accordance with the Tender Prices Index for works undertaken after 4 August 2000.
  • Rectification of the Phase 2 and Phase 3 contracts to include the agreed indexation provision.