Balfour Beatty Ltd v Gilcomston North Ltd & Anor [2006] ScotCS CSOH_81 (23 May 2006)

Balfour Beatty Ltd v Gilcomston North Ltd & Anor [2006] ScotCS CSOH_81 (23 May 2006)

The contractual scheme of risk allocation, indemnity, and insurance under the NEC contracts governs liability for reinstatement costs. The insurance provisions do not create a separate right to payment; liability depends on whether the event was at the defender's risk under the contract. Claims for unjustified enrichment are excluded where a contract provides a remedy. The pursuers' claims based on breach of contract and unjustified enrichment are irrelevant; only the indemnity claim under the contract is potentially relevant, subject to proper averments of risk and contributory fault.

Citation
[2006] ScotCS CSOH_81
Parties
Pursuer: Balfour Beatty Limited; First Defender: Gilcomston North Limited (formerly Gilcomston Construction Limited); Second Defender: O Turner Insulation Limited
Jurisdiction
Scotland
Judgment Date
23 May 2006
Procedural Posture
Commercial Action (remitted to Ordinary Roll) / Procedure Roll Hearing on Preliminary Pleas
Outcome
Pursuers' claims for breach of contract and unjustified enrichment held irrelevant; only indemnity claim under contract to proceed, subject to relevancy of averments.
Legal Topics
Risk Allocation, Indemnity Clauses, Joint Names Insurance, Subrogation, Breach of Contract, Recompense, Repetition, Interpretation of NEC Contracts
Construction Law Contract Law Insurance Law Unjust Enrichment Risk Allocation Indemnity Clauses Joint Names Insurance Subrogation +4 more

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Parties

Balfour Beatty Limited

Pursuer

Gilcomston North Limited (formerly Gilcomston Construction Limited)

First Defender

O Turner Insulation Limited

Second Defender

Procedural Posture

Commercial Action (remitted to Ordinary Roll) / Procedure Roll Hearing on Preliminary Pleas

Legal Issues

  1. 1 Who bears liability for reinstatement costs following fire damage under NEC contracts and subcontracts?
  2. 2 Are the defenders obliged to indemnify the pursuers for losses?
  3. 3 Does failure to insure create a separate right to payment?

Ratio Decidendi

The contractual scheme of risk allocation, indemnity, and insurance under the NEC contracts governs liability for reinstatement costs. The insurance provisions do not create a separate right to payment; liability depends on whether the event was at the defender's risk under the contract. Claims for unjustified enrichment are excluded where a contract provides a remedy. The pursuers' claims based on breach of contract and unjustified enrichment are irrelevant; only the indemnity claim under the contract is potentially relevant, subject to proper averments of risk and contributory fault.

Court Disposition

Pursuers' claims for breach of contract and unjustified enrichment held irrelevant; only indemnity claim under contract to proceed, subject to relevancy of averments.

Orders

  • Pursuers' plea-in-law 4 repelled; words 'et separatim reparation' in plea-in-law 5 to be deleted.
  • Averments relating to breach of contract and unjustified enrichment to be deleted as irrelevant.