Aer Lingus v Gildacroft - Time Limits For Contribution Proceedings
Aer Lingus v Gildacroft - Time Limits For Contribution Proceedings
Aer Lingus plc v Gildacroft Ltd & Sentinal Lifts Ltd
Court of Appeal (Clarke MR, Rix & Moore-Bick LJJ)
Reserved Judgment 17 January 2006
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 is deemed to accrue, and that for the purpose of limitation the cause of action for contribution is deemed to accrue 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 or award on liability, so that for the purpose of limitation the cause of action for contribution was deemed to accrue 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 or award on quantum, so that for the purpose of limitation 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
The Court of Appeal, reversing the finding of Simon J at first instance, found that dicta in previous cases relating to predecessor legislation, while not precisely on point, tended to support the proposition that the relevant “Judgment” or “award” is Judgment or award on quantum, that this was further supported by the subscript to Sub-section 10(3) which is only really explicable if “Judgment” or “award” means Judgment or award on quantum, and by considerations of consistency between Sub-sections 10(3) and 10(4), and accordingly that “Judgment” or “award” in Sub-section 10(3) means Judgment or award on quantum, and consequently that Aer Lingus’s proceedings for contribution were not statute-barred. Neither Gildacroft nor Sentinal sought permission to appeal to the House of Lords.
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. It is now clearly established that the 2 year limitation period for a wrongdoer to commence contribution proceedings runs from whichever is earlier of:
(a) The date when the original victim obtained Judgment or award against the wrongdoer on quantum; or
(b) Where the wrongdoer settled with the original victim, the date on which the quantum to be paid was agreed.