Aer Lingus plc v Gildacroft Ltd & Sentinal Lifts Ltd - Limitation in Contribution Proceedings
Aer Lingus plc v Gildacroft Ltd & Sentinal Lifts Ltd - Limitation in Contribution Proceedings
Aer Lingus plc v Gildacroft Ltd & Sentinal Lifts Ltd
Simon J Queen’s Bench Division London 24 June 2004
Facts
Under a contract between Aer Lingus plc and Gildacroft Limited, Gildacroft carried out refurbishment work at Aer Lingus’s Building 582, Sandringham Road, Heathrow Airport, including refurbishment/alteration of a lift.
Under a sub-contract between Gildacroft and Sentinal Lifts Limited, Sentinal carried out work on the lift from 23 - 27 January 1998.
On 27 January 1998, Mr. Smyth, an employee of Aer Lingus, suffered an accident when the lift malfunctioned, trapping his left arm and causing him serious injury.
Mr. Smyth brought proceedings against Aer Lingus, claiming damages for personal injury, and, on 9 May 2001, Mr. Smyth obtained consent Judgment on liability against Aer Lingus.
Subsequently, by an agreement between Mr. Smyth and Aer Lingus made in about September 2003, embodied in a consent Judgment on quantum dated 3 October 2003, Mr Smyth’s claim was settled by Aer Lingus for £490,000 plus costs.
On 4 February 2004, Aer Lingus commenced proceedings against Gildacroft and Sentinal, claiming an indemnity or contribution under the Civil Liability (Contribution) Act 1978 in respect of that settlement.
Gildacroft and Sentinal pleaded that the claims against them under the Civil Liability (Contribution) Act 1978 were statute-barred under Section 10 of the Limitation Act 1978.
Law
Section 10 prescribes a 2 year limitation period for a claim under Civil Liability (Contribution) Act 1978 from the date when the cause of action for contribution accrues, and that the cause of action accrues on whichever is the earlier of:
(1) The date when the wrongdoer claiming contribution is “held liable in respect of that damage” to the original victim by a “Judgment” or arbitrator’s “award” (Sub-section 10(3)); or
(2) In the event of a settlement between the wrongdoer and the original victim, the date when the quantum to be paid is agreed (Sub-section 10(4)).
Gildacroft and Sentinal contended that “Judgment” or “award” in Sub-section 10(3) means Judgment on liability, so that the cause of action for contribution accrued on 9 May 2001 and the limitation period expired on 9 May 2003, long before the proceedings for contribution were commenced.
Aer Lingus contended that “Judgment” or “award” in Sub-section 10(3) means Judgment on quantum, so that the cause of action for contribution only accrued at the time of the settlement in September 2003 and the proceedings for contribution were issued well within the limitation period.
Finding
Simon J, having regard in particular to the natural meaning of the words “held liable in respect of that damage by” in Sub-section 10(3) and the meaning given to the word “damage” in the Civil Liability (Contribution) Act 1978 by the House of Lords in Royal Brompton NHS Trust v Hammond [2002] 1 WLR 1397 and distinguishing dicta of the Court of Appeal in Ronex Properties Ltd v John Laing Construction Ltd [1983] QB 398 (which have erroneously been regarded by some text writers e.g. Clerk & Lindsell, as being authoritative), held that “Judgment” or “award” in Sub-section 10(3) means Judgment or award on liability, and consequently that Aer Lingus’s proceedings for contribution were statute-barred. However, he gave Aer Lingus permission to appeal to the Court of Appeal.
Comment
Surprisingly, there appears to have been no previous authority directly on this point. It is one of considerable importance, since the Civil Liability (Contribution) Act 1978 governs contribution between wrongdoers of many different kinds liable for the same damage. Practitioners should note that, under Simon J’s ruling, where the original victim obtains a separate Judgment or award on liability against a wrongdoer, the 2 year period for that wrongdoer to commence contribution proceedings runs from the date of the Judgment or award on liability, not – as some have previously assumed – the later Judgment, award or settlement on quantum.
Representation
Martin Porter instructed by Beachcroft Wansbroughs for Aer Lingus, Jonathan Harvey instructed by Kennedys for Gildacroft, Nicholas Heathcote Williams instructed by John A Neil for Sentinal