Issues –
Whether it is possible to determine the issue of the effect of the relevant clauses in a summary judgment or whether that determination needs to await trial. Whether breaches of agreement committed fundamentally, deliberately, and wilfully fall within the scope of restrictions and exclusions clauses contained in the SSA.
Facts –
The claimant is an engineering consultant, and the defendant is an engineering contractor. In 2016, the defendant was contracted by the Defence Infrastructure Organisation (“the DIO”), an operating arm of the Ministry of Defence, to create a new power station at RAF Mount Pleasant. It employed the claimant to give primary design consultancy services in the tender period. After the defendant obtained the contract from the DIO, there were other arrangements between the defendant and the claimant, but a quarrel occurred because the claimant stopped payments and the defendant then blocked access to the project’s data. In July 2017, the defendant made an interim injunction to gain the data which was granted. In November 2017, the parties established a settlement and services agreement (SSA), with an intention to settle the present dispute and to rule their current operations. Appendix 3 set out the terms and conditions of the SSA, and containing four schedules handling the conditions, the timetable, the personnel, the equipment and facilities to be provided by defendant, and the terms of payment; at clause 9 was agreed that the SSA was to be in full and final settlement of all prior claims. There were three relevant clauses: the liability cap at clause 1.4.1 ii) a, the exclusions clause at clause 1.4.1 ii) b; and the net contribution clause at clause 1.4.1 iii). The claimant made an application for a summary judgment based on these clauses. He denied the alleged breaches and told that as a matter of law and of construction of the SSA, even supposing the breaches are demonstrated and found to have been fundamental, wilful, or deliberate, the SSA’s exclusion and limitation clauses would achieve to exclude or limit the claimant’s liability.
Rules for a Summary Judgment
The court may give a summary judgment against a claimant or defendant on a claim if it considers that the claimant has no real prospect of succeeding on the claim or issue; that the defendant has no real prospect of successfully defending the claim or issue ; and there is no other competing reason why the case or issue should be disposed of at trial; the court must not conduct a mini trial, nonetheless it must take in account claimant’s statements or documents; the court must consider the evidence before for summary judgment, and in addition the evidence that can be expected at trial; under part 24 CPR, it must found on a point of law or construction, if a case is bad in law, it has no real prospect of succeeding.
The Construction of Contracts in General
The court interprets the relevant words of a contract in their documentary, factual and commercial context, assessed in the light of: (i) the natural and ordinary meaning of the provision being construed; (ii) any other relevant provisions of the contract being construed; (iii) the overall purpose of the provision being construed and the contract or order in which it is contained; (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. A court can only consider facts or circumstances known or reasonably available to both parties that existed at the time that the contract or order was made. In arriving at the true meaning and effect of a contract or order, the departure point in most cases will be the language used by the parties, because, (a) the parties have control over the language they use in a contract or consent order, and (b) the parties must have been specifically focussing on the issue covered by the disputed clause or clauses when agreeing the wording of that provision. Where the parties have used unambiguous language, the court must apply it, if there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.
The Approach to the Construction of Exemption Clauses
Clauses restricting or excluding liabilities are to be construed following the principles applicable to contracts generally – clear words are required for such clauses. Whether an exclusion clause is to be applied to a fundamental breach, or a fundamental term breach, or to any breach of contract, rests on the construction of the contract. A basic principle of the common law of contract is that parties to a contract are free to determine for themselves what primary obligations they will accept, the presumption being that they intended to accept the implied obligations, and exclusion clauses are to be construed strictly.
Conclusion
The breaches alleged were subject to the exclusions and limitations set out in clause 1.4.1; there were no solid probabilities of a conclusion that the words used did not produce to exclude liability for the breaches alleged at a trial. The net contribution clause was clear, conserving the contractual effect of the claimant’s obligations. The decisive point was whether the clauses concerned were set out in a clear language capable of covering breaches alleged by the defendant and was in an implied agreement accepted to be an exhaustive regulation of the parties’ future dealings. It was concluded that if properly construed, limitations and exclusions clauses were applicable to breaches of a SSA by a party, even fundamental, deliberate, or wilful. The summary judgment was granted in favour of the claimant.