Litigation Recent Decisions 02/05/95

Contract interpretation

John Mowlem & Co v Eagle Star Insurance Company & Ors (1995). (CA (Nourse LJ, Hirst LJ and Sir Ralph Gibson) 20/3/95)

Summary: The use of 'or' in a building contract conjunctively and not disjunctively.

Plaintiffs' appeal by John Mowlem & Co against the Official Referee's rulings on two questions on the construction of a management contract for the development of an old hospital site in favour of the defendants, three Eagle Star Insurance Group companies and a firm of architects. The questions were:

(1) Whether the management contractor would ever be entitled to extensions of time for causes beyond its control but within the control of sub-contractors or materials suppliers and if so in what circumstances?

(2) In what circumstances would the management contractor be liable to the employer by reason of the breach of any sub-contract by a sub-contractor or materials supplier resulting in delays or disruptions?

The plaintiffs' construction of the contract depended largely on whether the word 'or' was used disjunctively whereas the judge had found that throughout the agreement it had been used conjunctively. Although prima facie it has a disjunctive meaning, it is elementary that such an interpretation is not sacrosanct and must frequently give way in the light of the context in which the word appears. In the present case the use of the word was intended conjunctively for a number or reasons which appeared in the context. In all other submissions by the appellant the judge's construction of the agreement was correct. Appeal dismissed.

LTL 13/4/95

Assessment of Lloyd's Names' damages

Michael Eunan Mc Laron Deeny & 3,062 Ors v Gooda Walker (in voluntary liquidation and 70 others (1995). (QBD (Phillips J) 6/4/95).

Summary: Whether damages should be assessed once and for all in the negligence claims by Names against underwriting agents.

As to whether damages should be assessed now having regard to the fact that substantial and unquantified claims could still arise which the plaintiffs would have to pay and for which they would be entitled to be indemnified by the plaintiffs under the judgment at future dates.