Friends Provident had participated in a development project on terms which required it to pay its share of the development costs as it proceeded. It employed Hillier Parker, a firm of surveyors, to check demands made from time to time for payment of its share of development costs. Friends Provident paid the developer its share of costs, as demanded, on the recommendation of Hillier Parker. There had been included, wrongly, an item described as ‘notional interest’. Friends Provident were unable to recover sums paid as notional interest from the developer and sued Hillier Parker for damages for negligence by reference to those sums paid. Hillier Parker then instituted third party proceedings against the developer. It sought contribution on three bases, namely (1) Friends Provident had paid the notional interest to the developer under a mistake of fact or for no consideration and the latter was liable to repay it, (2) the developer’s receipt of the notional interest was in circumstances such as to constitute it a trustee of those sums and (3) the developer’s application for payment of notional interest was in breach of an express or implied term of the development agreement. The developer successfully applied to strike out the third party proceedings. Hillier Parker appealed.
Held: If two parties were both liable they could claim contribution from each other under the section even though the liabilities might be under different heads. The Act enabled contribution to be claimed in those circumstances.
Auld LJ considered whether a claim for restitution by Friends Provident against the developers would be a claim in respect of the same damage alleged by Friends Provident against Hillier Parker: ‘In my judgment, despite the distinction between a claim for restitution and one for damages, each may be a claim for compensation for damage under sections 1(1) and 6(1) of the Act of 1978. The difference between asking for a particular sum of money back or for an equivalent sum of money for the damage suffered because of the withholding of it is immaterial in this statutory context, which is concerned with ‘compensation’ for ‘damage.’ The purpose and effect of the Act were to provide for contribution beyond that of joint tortfeasors for which section 6 of the Law Reform (Married Women and Tortfeasors) Act 1935 had previously provided. The contribution is as to ‘compensation’ recoverable against a person in respect of ‘any damage suffered by another’ ‘whatever the legal basis of his liability, whether tort, breach of contract, breach of trust or otherwise.’ It is difficult to imagine a broader formulation of an entitlement to contribution. It clearly spans a variety of causes of action, forms of damage in the sense of loss of some sort, and remedies, the last of which are gathered together under the umbrella of ‘compensation.’ The Act was clearly intended to be given a wide interpretation . . .’
Judges:
Auld, Saville and Rose LJJ
Citations:
[1997] QB 85
Statutes:
Civil Liability (Contribution) Act 1978 1
Jurisdiction:
England and Wales
Citing:
Cited – K v P (J, Third Party) 1993
Illegality was arguably not a defence to a claim under the Act of 1978: ‘The Act of 1978 extends the potential for contribution beyond joint tortfeasors to joint contractors, joint trustees and others who are liable in respect of the same damage. . . .
Cited by:
Cited – Eastgate Group Ltd v Lindsey Morden Group Inc, and Smith and Williamson (a Firm) CA 10-Oct-2001
The defendant faced a claim for breach of warranties given by vendors in a company share sale agreement. The sought a contribution from the purchasers accountants who had prepared figures upon which the purchase decision was based. The defendants’ . .
Disapproved in part – Royal Brompton Hospital National Health Service Trust v Hammond and others HL 25-Apr-2002
The claimants sought damages against the defendants for their late delivery of a building. The contractors sought to share the damages with the architects who had certified the delays, defeating their own claims.
Held: The Act sought to extend . .
Cited – Charter Plc and Another v City Index Ltd and others ChD 12-Oct-2006
An employee of the claimant had fraudulently spent several million pounds of the claimant’s money on personal bets through the defendant company. The claimant said that the defendants knew the origin of the funds and were liable to repay them. . .
Cited – City Index Ltd and others v Gawler and others; Charter plc v City Index Ltd CA 21-Dec-2007
A senior employee of Charter had fraudulently spent substantial sums with City Index. City Index had paid out on a claim of knowing receipt, and sought contributions from directors of Charter and their auditors, saying that they had known of the . .
Lists of cited by and citing cases may be incomplete.
Damages
Updated: 12 May 2022; Ref: scu.180114