Melville Dundas Ltd v. Hotel Corporation Of Edinburgh Ltd [2006] ScotCS CSOH_136 (07 September 2006)

Melville Dundas Ltd v. Hotel Corporation Of Edinburgh Ltd [2006] ScotCS CSOH_136 (07 September 2006)

The parties' agreement, as evidenced by the 25 July 2003 email, clearly withheld the £90,000 for a specific purpose related to the glazing issue, and provided a self-contained code for its disposal. This excluded both common law rights of retention and balancing accounts on insolvency in respect of that sum. The sum was not part of the contractual retention and was not subject to set-off for other debts or defects. Section 111 of the Housing Grants, Construction and Regeneration Act 1996 does not apply as the agreement is a settlement, not a construction contract.

Citation
[2006] ScotCS CSOH_136
Parties
Pursuer: Melville Dundas Limited; Defender: Hotel Corporation of Edinburgh Limited
Jurisdiction
Scotland
Judgment Date
07 September 2006
Procedural Posture
Commercial Contract Dispute / Judgment After Proof Before Answer
Outcome
Judgment for pursuers
Legal Topics
Retention, Set Off, Balancing Accounts on Insolvency, Interpretation of Settlement Agreements, Funds Held for Specific Purpose, Housing Grants, Construction and Regeneration Act 1996
Contract Law Insolvency Law Construction Law Retention Set Off Balancing Accounts on Insolvency Interpretation of Settlement Agreements Funds Held for Specific Purpose +1 more

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Parties

Melville Dundas Limited

Pursuer

Hotel Corporation of Edinburgh Limited

Defender

Procedural Posture

Commercial Contract Dispute / Judgment After Proof Before Answer

Legal Issues

  1. 1 Whether rights of retention and balancing accounts on insolvency are excluded by the parties' agreement
  2. 2 Whether the sum of £90,000 was held for a specific purpose excluding set-off
  3. 3 Whether section 111 of the Housing Grants, Construction and Regeneration Act 1996 applies

Ratio Decidendi

The parties' agreement, as evidenced by the 25 July 2003 email, clearly withheld the £90,000 for a specific purpose related to the glazing issue, and provided a self-contained code for its disposal. This excluded both common law rights of retention and balancing accounts on insolvency in respect of that sum. The sum was not part of the contractual retention and was not subject to set-off for other debts or defects. Section 111 of the Housing Grants, Construction and Regeneration Act 1996 does not apply as the agreement is a settlement, not a construction contract.

Court Disposition

Judgment for pursuers

Orders

  • Defenders ordered to pay the sum of £105,000 (including VAT) to the pursuers