Charles Brand Ltd v Orkney Islands Council [2001] ScotCS 18 (24 January 2001)

Charles Brand Ltd v Orkney Islands Council [2001] ScotCS 18 (24 January 2001)

The court held that the employer's justified retention of certified sums due to the contractor's insolvency still constituted a 'failure to make payment' under clause 60(6) of the I.C.E. Conditions of Contract, and therefore contractual interest continued to accrue during the period of retention.

Citation
[2001] ScotCS 18
Parties
Claimants and Respondents: Charles Brand Limited; Respondents and Appellants: Orkney Islands Council
Jurisdiction
Scotland
Judgment Date
24 January 2001
Procedural Posture
Stated Case Under the Administration of Justice (scotland) Act 1972 / Opinion of the Court of Session on a Question of Law From Arbitration
Outcome
Appeal dismissed; question in the stated case answered in the negative.
Legal Topics
Retention of Sums, Contractual Interest, Insolvency, Set Off and Compensation, Interpretation of Contract Clauses
Contract Law Construction Law Arbitration Retention of Sums Contractual Interest Insolvency Set Off and Compensation Interpretation of Contract Clauses

Case Brief

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Parties

Charles Brand Limited

Claimants and Respondents

Orkney Islands Council

Respondents and Appellants

Procedural Posture

Stated Case Under the Administration of Justice (scotland) Act 1972 / Opinion of the Court of Session on a Question of Law From Arbitration

Legal Issues

  1. 1 Whether the employer's right of retention during the contractor's insolvency suspends the obligation to pay contractual interest under clause 60(6) of the I.C.E. Conditions of Contract
  2. 2 Whether 'failure to make payment' in clause 60(6) includes justified retention due to insolvency

Ratio Decidendi

The court held that the employer's justified retention of certified sums due to the contractor's insolvency still constituted a 'failure to make payment' under clause 60(6) of the I.C.E. Conditions of Contract, and therefore contractual interest continued to accrue during the period of retention.

Court Disposition

Appeal dismissed; question in the stated case answered in the negative.

Orders

  • The claimants are entitled to contractual interest under clause 60(6) for the entire period, including during justified retention.