HT-2023-000415 - [2024] EWHC 1199 (TCC)

Fecha: 20-May-2024

Is Hylgar’s new claim barred by paragraph 4 of the Tomlin Order Schedule? The approach to construction

V. Is Hylgar’s new claim barred by paragraph 4 of the Tomlin Order Schedule?

(a)

The approach to construction

16.

I was referred to the leading cases on construction including Rainy Sky SA v Kookmin Bank [2011] UKSC 50, Arnold v Britton [2015] UKSC 15, Wood v Capita Insurance Services Ltd [2017] UKSC 24 and Lamesa Investments Limited v Cynergy Bank Limited [2020] EWCA Civ 821. The approach to construction was not in dispute before me. It is well known and does not require extensive citation here. In my judgment, the correct approach was set out by Carr J (as she then was) sitting in this Court in EE Limited v. Mundio Mobile Limited [2016] EWHC 531 (TCC):

[28] The law can be summarised un-controversially, the key principles emerging in a well-known series of high-level authorities including the following: Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896 (at 912-913); Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101; Rainy Sky SA v Kookmin Bank Ltd [2011] 1 WLR 2900; Makdessi v Cavendish Square Holdings BV [2015] 3 WLR 1373 and Arnold v Britton [2015] UKSC 36.

[29] When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean. The court does so essentially as one unitary exercise by focussing on the meaning of the relevant words in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the contract, (iii) the overall purpose of the clause and the [contract], (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party's intentions. Commercial common sense and the surrounding circumstances should not be invoked to undervalue the importance of the language of the provision to be construed. A court will not readily accept that people have made linguistic mistakes, particularly in formal documents, but there may be cases where it is clear in context that something has gone wrong, but it requires a strong case to persuade a court that that is the case. Nor should a court reject the natural meaning of a provision simply because it appears to have been imprudent commercially or otherwise. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed.

[30] Agreements should be read as a whole and construed so far as possible to avoid inconsistencies between different parts on the assumption that the parties had intended to express their intentions in a coherent and consistent way. One expects provisions to complement each other…

17.

I adopt that summary of the law.

18.

There was some evidence as to the parties’ subjective understanding of the Order. I disregard this as inadmissible. I have also seen a track-changed draft of the Order. That too seems to be inadmissible, though I regard it as of no assistance in any event. It was not disputed that Dawnvale proposed paragraph 4 of the Schedule. That is admissible as part of the factual context, but it was not relied upon as having any real probative value. It is relevant to observe that both parties are commercial entities with experience of construction dispute resolution and both had legal advice at the time of the Order. Mr East for Hylgar submitted that the Order should be looked at through the lens of a skilled professional with knowledge of enforcement and adjudication proceedings. I accept that point. Furthermore, it seems to me that the key features of the factual context known to both parties at the time the Order was agreed would include the following:

That Hylgar could seek additional sums as part of a true value final determination in court proceedings;

That Hylgar may have further claims arising from the repudiatory breach;

That Dawnvale could challenge the adjudication decision as part of a final determination in court proceedings;

That Dawnvale could advance its own claim arising from invoice 43808 in court proceedings.