Chatbrown Ltd v Alfred McAlpine Construction (Southern) Ltd
Citation: 35 B.L.R. 44; 11 Con. L.R. 1; (1987) 3 Const. L.J. 104
Nature of case:
Alfred McAlpine were the main contractors on works at an RAF air station, and engaged Chatbrown as sub-contractors under the NFBTE/FASS form of sub-contract. McAlpine alleged that delay to the main contract had been caused by Chatbrown, one year before the then current date for completion of the main contract. McAlpine set off and deducted from sums otherwise due to Chatbrown losses which McAlpine stated it would incur as a result of the delay, purporting to do so pursuant to cl.15(2) of the sub-contract. Chatbrown issued a writ under Order 14, claiming the sums set off. McAlpine applied to stay the proceedings under s.4 of the Arbitration Act 1950. The official referee found in Chatbrown’s favour, and McAlpine appealed.
The Court of Appeal dismissed the appeal, ruling that cl.15(2) only applied were the losses set off had actually been incurred at the date of the notice of set off, and so McAlpine had not been entitled to make any deductions. Further, where the Court concludes that a defence is bad in law, then judgment will be given for the plaintiffs notwithstanding any arbitration clause.
