Construction

Barratt Homes Limited (Respondents) v Dwr Cymru Cyfyngedig (Welsh Water) (Appellants), [2009] UKSC 13

Tue, 02 Feb 2010 23:15:11 GMT

Supreme Court - Press Summary

The Respondents, Barratt Homes Limited, were engaged in building a substantial development of homes and a primary school in Llanfoist, near Abergavenny in Monmouthshire. They sought to exercise the right of a property owner under s 106 Water Industry Act 1991 to connect the drains to the public sewer at a point close to the development. The appellant sewerage undertakers, Welsh Water, argued that it was entitled to insist on a connection at point some 300m further downstream, as the sewer did not have the capacity to deal with the increased load until that point.

Welsh Water succeeded in the High Court but the decision was reversed on appeal and Barratt Homes made the connection at the place of its choice. Welsh Water pursued an appeal to the Supreme Court, seeking to establish that s 106 gave a sewerage undertaker the right to refuse to permit connection to the public sewer at an unsuitable point.

JUDGMENT
The Supreme Court dismissed the appeal (Lady Hale dissenting). The judgment of the majority was given by Lord Phillips.

REASONS FOR THE JUDGMENT
 The exercise of the right of a property owner to discharge into a public sewer pursuant to s 106 Water Industry Act 1991 (‘the 1991 Act’) was an absolute right which could not be prevented on the ground that the additional discharge would create a nuisance. That was for thesewerage undertaker to deal with [paras 23-26]. The right to object to the ‘mode of construction’ in s 106(4) did not extend to the point of connection [para 32]. It was significant that in nearly a century and a half since the first enactment conferring this right was passed, this was the first dispute between an owner and sewerage undertaker as to the point of connection to a public sewer to have reached the courts [para 38].

 The real problem behind the dispute in this case lay in the requirement to give only 21 days’ notice to a sewerage undertaker before exercising the absolute right in s 106. This was manifestly unsatisfactory in relation to a development which in this case would add 25% or more to the load on the public sewer [para 41]. The only way to achieve a deferral of the right was through the planning process, in which both the sewerage undertaker and OFWAT should be consulted. More thought might need to be given to the interaction of planning and water regulation systems under modern law to ensure that the different interests were adequately protected [paras 57-58].

 The 21 day limit for refusing applications to connect to the public sewer in s 106(4) was mandatory, in view of the fact that it was a criminal offence to connect a drain after such notice had been given [para 62].

 Lady Hale would have allowed the appeal on the construction of s 106(4). The legislative history led her to conclude that Parliament had not intended to cut down the scope of the local authority’s power to control the place and manner of connection in the Public Health Act 1936 (the predecessor to the 1991 Act), while leaving the position in Scotland unchanged [para 73]. The words ‘mode of construction or condition’ in s 106(4) should be interpreted as including the place of connection to the public sewer [para 79].

Cynthia Jacques & Elsie Jacques Grombach (T/A C&E Jacques Partnership) v Ensign Contractors Ltd [2009] EWHC 3383 (TCC)

Tue, 02 Feb 2010 11:31:00 GMT

This case concerned a dispute about whether, as a result of an adjudicator’s failure to consider allegedly relevant evidence, he had breached the rules of natural justice and thereby rendered the subsequent award unenforceable. The Court held that it was within an adjudicator’s jurisdiction to decide what evidence was admissible and, indeed, what evidence was helpful and unhelpful in the determination of the dispute referred to him. Even if the adjudicator’s decision to disregard evidence as inadmissible or of little or no weight was wrong in fact or in law, that decision would not in consequence be impugnable as a breach of the rules of natural justice. The Court made clear, however, that the failure to consider admissible evidence is distinct from a failure by the adjudicator to consider a defence put forward by one of the parties – which could be considered a breach of natural justice.

Supershield Limited v Siemens Building Technologies FE Limited [2010] EWCA Civ 7 (CA)

Tue, 02 Feb 2010 11:29:49 GMT

This case provides further guidance on the meaning of a “reasonable settlement” in cases where one party A seeks to recover from party C sums paid in a settlement to party B. The Court of Appeal held that because of its uncertainty and expense, prudent parties usually try to avoid litigation. The settlement value of a claim is not an objective fact but a matter of subjective opinion, taking into account all the variables. The Court only has to consider whether the settlement was within the range of what was reasonable rather than deciding what assessment it would have made if placed in the parties’ shoes.

Education 4 Ayrshire Limited v South Ayrshire Council [2009] CSOH 146, Outer House. (4 November 2009)

Tue, 29 Dec 2009 22:13:48 GMT

E, the contractor, was engaged to do works under a PPP contract with S the local authority. Following discovery of asbestos in the works, E claimed declarations that the works were delayed and that it was entitled to postponement of work plus a claim for compensation. However, the judge held that, pursuant to the clauses of the PPP contract, E had failed to give sufficient notice to S. Notice was agreed to be a condition precedent to the right of E to claim compensation or relief. Further, such notice had to comply strictly with various requirements stipulated in the contract, including to give notice of what claim the pursuer, E, was making The judge, construing the contract on that basis, held that E had failed so to comply because the letter on which it relied failed to stipulate which of the remedies E was claiming for. In so doing, he held that where parties have laid down in clear terms what has to be done by one of them if he is to claim certain relief, the court should be slow to seek to relieve that party from the consequence of failure.

Allied P&L Ltd v Paradigm Housing Group Ltd [2009] EWHC 2890 (TCC) (17 November 2009)

Tue, 29 Dec 2009 22:11:31 GMT

The case concerned enforcement of an adjudicator’s decision where it was asserted by the resisting party, P, that there had been various issues referred that had not been in dispute at the time of the Notice of Adjudication. P, the employer, had given A, the contractor, a first notice indicating various aspects of work with which P was not satisfied. Following a second notice, P determined the contract and ejected A from site. The judge held that there had been a dispute about whether there were grounds to justify termination by P because A had challenged the first notice as to grounds for termination. However the fact that P may or must have known that there would be the usual financial consequences flowing from the termination procedure which it invoked if it turned out to be unlawful was held to be broadly immaterial in determining what the ambit of the dispute was. Where there had been a failure by A to notify or intimate to P the money claims it proposed as arising out o f the termination then the dispute did not include any or any alleged entitlement to money or damages. However, there was no valid or effective jurisdictional reservation made by P on the grounds that no dispute had crystallised in relation to the financial consequences of the unlawful termination as asserted by A and therefore the judge enforced the adjudicator’s decision.

HDK Ltd (trading as Unique Home) v Sunshine Ventures Ltd and others [2009] EWHC 2866 (QB) (23 November 2009)

Tue, 29 Dec 2009 22:09:42 GMT

The case considered whether the defendant builder, K, had been in repudiatory breach of contract or, alternatively, whether termination of the construction contracts by the claimants, S and T, in itself constituted repudiatory conduct. K had agreed to carry out construction works at three properties owned by S or T (T being a director of S). S and T had purported to terminate the contracts by way of the K’s alleged repudiatory conduct, and which included delay and defects. K had transferred his business to a limited company (H) after the making of payments, and had commenced the action for payment by H in error. That claim was struck out. S and T claimed against K for losses associated with the termination. As to delay, the judge found that the completion dates for the contracts had been waived by K as a result of the variation of the works, supported by evidence of continued payment post the original completion dates. Further, correspondence urging K to complete the works d id not have the effect of making time of the essence because it didn’t specify a time for compliance or the consequences of a failure to comply. As to defects, the judge found that there had not been a sufficient accumulation of minor defects to demonstrate repudiatory conduct by K. Accordingly, there was no reason for S and T to terminate the contract and the termination itself had been a wrongful repudiation of contract. However, K did not succeed in his claim for further payment because, taking into account the cost of making good defects, he had not established any further entitlement.

Donoghue v. Greater Glasgow Health Board & Anor [2009] ScotCS CSOH_115 (04 August 2009)

Mon, 02 Nov 2009 10:24:38 GMT

In this Scottish case it was decided that a contractor who had been employed to construct a path leading to the top of some stairs on which the claimant fell was not liable for the loss suffered as a result of the fall. In 2004 the Health Board entered into a series of agreements with Impreglio relating to the construction and operating of a multi-storey car park in the grounds of the Glasgow Royal Infirmary. Impreglio in turn contracted with Laing to construct a path in the surrounds of the car park. Under the terms of a warranty between the Health Board and Laing, Laing undertook to comply with the terms of its contract with Impreglio. The contractual drawings specified that the path should be constructed using asphalt. However, Laing in fact surfaced it with gravel. About 3 years after the path had been constructed one of the hospital’s employees fell on the gravel. The employee sued the Health Board for her losses. The Health Board relied on the warran ty and joined Laing into the proceedings. The Health Board claimed that any damages would not have had to be paid to the employee but for Laing’s material breach of contract in not constructing the path properly. In its defence, Laing argued the loss was too remote. To be recoverable, damages had to be foreseeable at the time the contract was entered into (2004), rather than at the time of the breach (2007). The Court agreed. The Court stated that it was wrong in principle to hold someone liable for risks for which people entering into such a contract in their particular market would not reasonably be considered to have undertaken (or have included in their price a provision for the risk of such). Thus, when entering into the contract to construct the path, it would not have been in the reasonable contemplation of the parties that Laing would be exposed to liability for an accident caused by gravel 3 years later.

Fitzroy Robinson Ltd v Mentmore Towers Ltd [2009] EWHC 1552 (TCC) (07 July 2009)

Mon, 02 Nov 2009 10:22:24 GMT

Fitzroy were engaged as the architects for the development of three buildings in London and Buckinghamshire. The Fitzroy team assigned to the project was led by Mr Blake. However, whilst it was estimated that the project would take around three years, Mr Blake had in fact tendered his resignation before Fitzroy’s appointment was concluded. This meant that he was available to the project for no more than the first year. The Court found that Fitzroy did not tell the client that Mr Blake was leaving because it feared losing the appointment. However, Mr Blake was the principal reason that Mentmore had contacted Fitzroy in the first instance and one of the main reasons it was appointed. The Judge therefore found that Fitzroy should have brought Mr Blake’s resignation to the client’s attention. The withholding of information about Mr Blake’s resignation amounted to fraudulent misrepresentation and deceit.

Costain Ltd v Charles Haswell & Partners Ltd [2009] EWHC B25 (TCC) (24 September 2009)

Mon, 02 Nov 2009 10:20:40 GMT

Costain was successful in establishing that Haswell had been negligent in the foundation design for a water treatment works. However, Costain failed in its claim for prolongation costs due to delay resulting from the need to redesign the foundations. Both programming experts agreed that some delay had occurred to the foundation works of the two structures due to the need to redesign. They also agreed that at the time of the delay, the foundation works were on the critical path of the project so that, all other things being equal, and if no later mitigation measures were taken, those delays would ultimately delay the completion of the project as a whole. Crucially, however, no investigation was undertaken to establish whether this early delay was the actual cause of delay to the completion of the works. Costain argued that it was inevitable that a critical delay in the early stages of a project would lead to a delay to completion, and based its claim for recovery of general sit e overheads for the whole of the delay period on that assertion. The Judge disagreed. He found that it doesn’t follow that an early critical delay necessarily leads to a delay to the completion date nor does it follow that all site costs will increase.

Vision Homes Ltd v Lancsville Construction Ltd [2009] EWHC 2042 (TCC) (04 August 2009)

Wed, 28 Oct 2009 11:04:45 GMT

Vision sought a declaration that the decision of an adjudicator was null and void for want of jurisdiction. Vision argued that the Scheme for Construction Contracts (England and Wales) Regulations 1998 provides that any request to a nominating body should follow the giving of a notice of adjudication. However, in the present case, Lancsville’s request to the nominating body had preceded the notice of adjudication. Vision argued that this invalidated the adjudicator’s decision. The Judge agreed. It was not possible to regard Lancsville’s original request as “continuing” so that it could be considered as made both before and after the second notice. If the provision which established an adjudicator’s jurisdiction were not complied with it was irrelevant whether or not the other party had su ffered prejudice by that non-compliance.

Adonis Construction v O'Keefe Soil Remediation [2009] EWHC 2047 (TCC) (05 August 2009)

Wed, 28 Oct 2009 11:02:28 GMT

Adonis applied for summary enforcement of an adjudicator’s decision. Prior to the works being carried out, Adonis had sent O’Keefe a draft sub-contract order which stated that an official order would be submitted in due course. O’Keefe alleged that it did not receive the draft order until after it commenced the works. Additionally, O’Keefe never signed the draft order. The Judge held that the draft order did not amount to an offer. The use of the word “draft” indicated that the terms were the terms of an offer that was to be made in the future. Further, the offer in the draft was not capable of acceptance by conduct. There was a requirement in it that the attestation page should be signed under seal and returned within seven days – which had never occurred. It followed that it was likely that the adjudicator lacked jurisdiction to decide the dispute and the Judge therefore refused to allow summary enfo rcement.

North Midland Construction plc v A E & E Lentjes UK Limited [2009] EWHC 1371 (TCC) Ramsey J

Fri, 04 Sep 2009 10:53:32 GMT

This case concerns the application of the HGCRA 1996 to certain types of project. The Act applies to “construction contracts” which is broadly defined to include most contracts for construction or engineering works, and can also include design or consultancy work for such projects. However, the Act applies only in limited respects to energy and utilities projects. Section 105(2)(c)(i) of the Act excludes “assembly, installation or demolition of plant or machinery, or erection or demolition of steelwork for the purposes of supporting or providing access to plant or machinery, on a site where the primary activity is…nuclear processing, power generation or water or effluent treatment.” In this case, the subcontractor had contracted to perform civil engineering works to two power stations in the north of England. The works included demolition, excavation and earthworks, piling and concrete reinforcement work to construct foundations for components of the plant. The work did not involve the supply or installation of any plant of machinery. The issue was whether the project fell within the provisions of the Act, so that the adjudication provisions in the Act would apply. As the judge noted, interpreting the exclusions to the Act is unfortunately (given the consequences for payment and dispute resolution provisions) not an easy task. There were conflicting cases on whether section 105(2) should be interpreted broadly or narrowly. The court preferred to interpret the exclusion narrowly lest the Act be deprived of if its effect. The exclusion was held to apply only to the specific instances listed, namely where the work was assembly or installation of plant or machinery. As such, the exclusion in section 105(2)(c)(i) did not mean that any construction or engineering would performed on the site of a power station or water treatment plant would be excluded from the Act’s operation – it only applies where the work on site is for the “assembly, installation or demolition of plant or machinery…”.

Jim Ennis Construction Limited v Premier Asphalt Limited [2009] EWHC 1906 (TCC) Davies J

Fri, 04 Sep 2009 10:51:47 GMT

This case dealt with the nature and date of accrual of the cause of action for challenging an adjudicator’s decision. The claimants argued that the cause of action arose out of the adjudication decision itself. The defendants claimed it arose from the original breach of contract. The question was material in this case as six years had passed since the original breach of contract, and therefore the time limit under the Limitation Act 1980 for bringing a claim in contract had passed. The judge agreed with the claimant’s arguments. He held that the obligation to comply with the adjudicator’s decision gives rise to a new cause of action. This was for two reasons. First, there was an implied term that an unsuccessful party to an adjudication is entitled to have that dispute finally determined by legal proceedings. Second, the loosing party to an adjudication has a restitutionary cause of action against the successful party once it has paid the sums awarded by the adjudicator and by analogy with the restitutionary cause of action for a recovery of benefits conferred under judgments or order subsequently reversed or set aside. The judge stated that the decision was necessary in order to make fully workable the concept of the temporary finality of the adjudicator’s decision which lies at the heart of the adjudication provisions. It means that the loosing party to an adjudication has 6 years from the date of a payment in satisfaction of an adjudication in which to bring proceedings to challenge that award.

North Midland Construction plc v A E & E Lentjes UK Ltd [2009] EWHC 1371 (TCC)

Wed, 08 Jul 2009 12:24:00 GMT

This recent case centred on whether certain works carried out at two coal fired power stations fell within the ambit of the Construction Act. A E & E Lentjes UK Ltd ("AEE") sub-contracted certain works to North Midland Construction plc ("NMC"). The parties entered two contracts for each power station – one for enabling works and one for civil works. The enabling works consisted mainly of preparatory works, such as securing the site, constructing temporary roads, and installing temporary services. The civil works involved heavier construction works, such as piling, excavation and foundation earthing.

William Hare Ltd v Shepherd Construction Ltd and CR Reynolds v Shepherd Construction Ltd [2009] EWHC 1603 (TCC) Coulson J

Thu, 25 Jun 2009 13:09:00 GMT

This case concerned a “pay when paid” clause. Such clauses are forbidden by section 113(1) of the Housing Grants Construction and Regeneration Act 1996 unless it can be shown that the third party employer is insolvent. Hare were engaged by Shepherd to fabricate and erect steelwork at a development in Wakefield. There was an express term of the contract, clause 32, which was in similar terms to the 1996 Act and defined the employer’s insolvency by reference to four alternate situations (1) an administration order made by the court; (2) the appointment of an administrative receiver; (3) insolvent liquidation; (4) the making of a winding-up order by the court. The employer, Trinity, became insolvent through the Enterprise Act 2002. The 2002 Act allows self-certifying administrations. Trinity went down the self-certification route to administration and not any of the four routes identified in clause 32. Hare had legitimate claims against Shepherd but Shepherd had issued withho lding notices relying on clause 32 and Trinity’s insolvency. Hare submitted that because none of the events in clause 32 had occurred, Trinity was not insolvent within the meaning of clause 32 and the withholding notices issued by Shepherd were invalid. This submission was supported by CR Reynolds, another sub-contractor on the same project who was in the same position. Coulson J held that a literal interpretation of the clause made commercial sense and that Hare’s analysis of clause 32 had the benefit of being based on the plain meaning of the words used whereas Shepherd’s analysis involved a significant rewording of the clause. Further, the Enterprise Act came into force five years before the contract was agreed. In circumstances where the parties are agreed that they must be deemed to have known about the amendments when they made the contract, it strengthens rather than weakens Hare’s construction of the clause. As such, Coulson J found that Trinity was not insolvent within the meaning of clause 32 and so the withholding notices issued by Shepherd were invalid.

Star Energy UK Onshore Ltd & Anor v Bocardo SA [2009] EWCA Civ 579 (15 June 2009)

Fri, 15 May 2009 13:06:00 GMT

This case concerned pipelines drilled into an oil and gas reserve under property belonging to the claimant company (which was owned by Mohammed Al Fayed). The defendant had been granted a petroleum production licence under the Petroleum (Production) Act 1934. This permitted the defendant to drill down and extract the petroleum. The pipelines crossed the boundary of the claimant’s property at around 800 feet below the surface and terminated at between 2,300 and 2,800 feet. The Court held that the claimant’s title extended at least to the strata at depths of around 2,800 feet below the surface. Whilst the claimant owned the land below the property, it did not own the petroleum. Notwithstanding the defendant’s statutory right to drill for petroleum, the regime required a licensee to acquire such “ancillary rights” as might be necessary to allow it is exercise its licence. The intrusion into the ground under the property was a trespass and the defendant should have acquired an ancillary right. When assessing the amount of compensation payable to the claimant, the court had regard to the principles generally adopted for compulsory purchase compensation. This would have resulted in damages of £82.50. However, compensation can also be determined by reference to the amount the parties would have negotiated. The Court, taking this latter approach, assessed damages in the sum of £1000. This decision will come as a relief to oil companies as the first instance judge had awarded £620,000 to the claimant on the basis that compensation should be at 9% of the value of the oil extracted.

Coal Pension Properties Ltd v Nu-Way Ltd [2009] EWHC 824 (TCC) (27 April 2009)

Mon, 27 Apr 2009 18:37:00 GMT

The claimant owned property which was damaged by an explosion caused by a gas leak. The leak was from a gas booster manufactured by the defendant. The defendant had been notified of three previous incidents in other premises involving boosters of the same design where the casing had cracked. After the third incident the defendant issued new product information notices advising regular inspection to ensure that the bearings supporting the shaft in the booster were in good condition. However, the Court found that after the third incident there was a duty to give a warning that specifically addressed the risk to the fan casing. The product information notices did not focus sufficiently on the risks of explosion if inspection and maintenance were not regular and effective. The Court found that if the sufficient warning had been given, it would have been heeded and the loss avoided.

HS Works Ltd v Enterprise Managed Services Ltd [2009] EWHC 729 (TCC) (08 April 2009)

Wed, 08 Apr 2009 18:35:00 GMT

The claimants were civil engineers employed by the defendants to carry out construction work on highways in London. There was a final account dispute following completion of the work. Two adjudications followed. In the first, the adjudicator awarded £1.8 million to the claimant. In the second, the adjudicator made a declaration that the Sub Contract works, allowing for contra charges, should be valued at £23.3 million, requiring repayment of at least part of the award in the first adjudication. Each party sought to overturn the decision adverse to their interests. The court rejected the parties’ arguments concerning lack of jurisdiction and natural justice in relation to both adjudications. The court found that both decisions were valid and were to be given effect. The Judge stated that where there are two connected decisions which are found to be valid, how each decision is given effect is a matter for the court, including whether it is appropriate to allow a set-off of a second decision against a first. In this case the Judge decided that it would be pointless for the defendant to hand over the net sum due pursuant to the first adjudication to be followed by the claimant having to hand back all or the bulk of what had just been paid to it. As such the order was drawn to reflect the net effect of the adjudications.

Alexander Bole and another v (1) Huntsbuild Limited (2) Richard Money Associates QBD (TCC) Toulmin J (13 March 2009)

Fri, 13 Mar 2009 08:47:00 GMT

A property was built with defective foundations. The owner of the property claimed against the builder and the structural engineer who had advised on the depth of the foundations. The Court found that the structural engineer had been professionally negligent in respect of advice given about the required depth of the foundations. As a result, the builder had failed to build the house in accordance with NHBC Standards of Construction and was found to be in breach of contract and the Defective Premises Act 1972. The parties’ experts considered two possible remedies: (1) repairs to cracking and redecoration (£80,000); (2) a piled raft to the full ground floor footprint (£210,000).The experts agreed that the second option would provide a conclusive and immediate solution whereas the first option would make the house habitable but could not be guaranteed to deal with the future movement of the house. The Court found that the second option, notwithstanding that it was considerably more expensive, was the appropriate remedy and it was entirely reasonable for the purchaser to expect a permanent end to the defects regardless of the extra cost (the purchaser had already endured 7 years of building works attempting to solve the problem).

Brookfield Construction (UK) Limited v (1) Foster and Partner Limited (2) HOK Sport QBD (TCC) Coulson J (23 February 2009)

Mon, 23 Feb 2009 10:53:00 GMT

The main contractor for the new Wembley Stadium (Brookfield, formerly Multiplex) attempted to rely on a clause requiring the Architect to give it access to its personnel so that it could carry out a fully and systematic review of the Architect’s services. The Architect refused; it argued that the operation of the clause ceased upon the completion of its services and argued that those services were already complete. Coulson J disagreed with the Architect. He found that the obligation continued after the services had ended and so the Architect had to co-operate.

Richard J Thompson Trading As R J Thompson International v James K Charlesworth [2009] EWHC B3 (TCC) (17 February 2009)

Tue, 17 Feb 2009 00:00:00 GMT

The Claimant claimed monies for installing electrical works at a house being built by the Defendant. The Claimant and the Defendant were friends. A figure of £15,000 was mentioned in discussions although little was put in writing. The Claimant then issued an invoice which stated that he would send the Defendant “a full job costing so that we don’t go over budget”. The dispute was whether the £15,000 was a figure agreed as a fixed price contract or whether it was merely a budget estimate of cost. The Judge held that there was no fixed price contract. The parties had not been acting in accordance with normal commercial practice and the invoice had to be interpreted in that light.

Mead General Building Ltd v Dartmoor Properties Ltd [2009] EWHC 200 (TCC) (04 February 2009)

Wed, 04 Feb 2009 00:00:00 GMT

The Claimant had been successful in obtaining an adjudicator’s decision in its favour and applied for summary judgement, the sum not having been paid by the Defendant. However, the Claimant was subject to a company voluntary arrangement (“CVA”). The issue before the Court was whether the Claimant should be granted summary judgement or whether there should be a stay of enforcement because there were concerns that the Claimant would be unable to repay the sums awarded to it if it was subsequently determined in a final hearing that it had been overpaid. Coulson J refused to grant a stay on the basis that, whilst the CVA was a relevant factor to consider, the fact of the CVA would not of itself mean that the Court would infer that the Claimant would be unable to later repay any sums awarded to it. Instead, what was relevant were the circumstances of the CVA, the Claimant’s trading position, and whether the CVA was significantly, or in part, due to the Defendant’s failure to pay during the course of the project. The evidence in this case was that there were good prospects of the Claimant continuing to trade.

Bovis Lend Lease Ltd v The Trustees of the London Clinic [2009] EWHC 64 (TCC) (28 January 2009)

Wed, 28 Jan 2009 00:00:00 GMT

The Claimant, a contractor, made a summary judgement application for enforcement of an adjudicator’s decision. The Defendant agued that there was no crystallised dispute in relation to the claim because the claim was based on new expert evidence which had only been presented during the adjudication. Therefore, the Defendant argued, the adjudicator lacked jurisdiction. The Defendant also argued that the volume of new evidence was such that it did not have a fair opportunity to respond and, as such, the decision of the adjudicator was in breach of the rules of natural justice. Akenhead J gave the following useful guidance: (1) Unless the information provided which is said to found the dispute is nebulous and ill defined, the Court will treat no dispute arguments with caution. In this case, the Judge was of the view that the Defendant was provided with sufficient information to understand the case against it; (2) The fact that new evidence is submitted during an adjudication does not mean that the dispute did not crystallise before the adjudication; (3) The fact that a party responding to an adjudication had to deal with a large and complex dispute does not mean that the adjudication is necessarily unfair; (4) If a party fails to complain of a breach of the rules of natural justice during the adjudication, the failure to complain will be persuasive evidence that there has been no breach.

Dalkia Energy and Technical Services Ltd v Bell Group UK Ltd [2009] EWHC 73 (TCC) (21 January 2009)

Wed, 21 Jan 2009 00:00:00 GMT

Dalkia sought a declaration under CPR Part 8 that the adjudicator to an ongoing adjudication between the parties lacked jurisdiction. Bell argued that the Part 8 proceedings were inappropriate because there was an issue of fact as to whether some of Dalkia’s terms and conditions were were received by Bell in April or May 2007. Coulson J stated that the TCC’s procedure should be flexible enough to avoid the result that one issue, in connection with an almost entirely irrelevant factual matter, should derail an otherwise valid Part 8 claim. Part 8 claims are appropriate to deal with challenges to an adjudicator’s jurisdiction as long as they are in accordance with paragraph 9.4.1 of the TCC Guide and the guiding principles set out in Vitpol Building Service v Samen [2008] EWHC 2283 (TCC).

Dorchester Hotel Ltd v Vivid Interiors Ltd [2009] EWHC 70 (TCC) (19 January 2009)

Mon, 19 Jan 2009 00:00:00 GMT

The Hotel had engaged Vivid to carry out a refurbishment of its premises. Vivid then commenced an adjudication on a final account claim. The Referral Notice was accompanied by 37 level arch files and two expert reports. An extension to the 28 day adjudication period was agreed but the Hotel alleged that the timetable was too tight with the result that there was a very real risk of a breach of natural justice. The Hotel sought a declaration to the same effect by way of CPR Part 8 proceedings. This claim therefore raised the novel question of the extent to which the TCC should intervene in an ongoing adjudication in connection with potential breaches of the rules of natural justice. On the issue of jurisdiction, Coulson J found that if an adjudication is fundamentally flawed in some way then it is sensible and appropriate for the parties to have recourse to the TCC under CPR Part 8. On the issue of natural justice, Coulson J refused the declaration sought by the Hotel for the following reasons: First, the adjudicator was confident that he could decide the dispute within the time frame; Second, the Hotel had failed to use all the time available to it over the Christmas period; Third, if breaches of natural justice did occur, the Hotel would not be without a remedy because it could rely upon those breaches to resist enforcement.

A E Yates Trenchless Solutions Ltd v Black & Veatch Ltd [2008] EWHC 3183 (TCC) (19 December 2008)

Fri, 19 Dec 2008 11:55:00 GMT

D was engaged to carry out engineering works at a water treatment plant. C was a specialist engineering contractor sub-contracted by D to carry out some directional drilling work. C claimed that it had been delayed and disrupted in it works and that it was entitled to compensation under the sub-contract. However, no formal contract had been signed and a ‘battle of the forms’ argument arose. Whilst the case turns largely on its own facts, Akenhead J’s judgment reiterates that the Court will apply an objective interpretation to the parties’ conduct in construing the contract. Thus, a contractor who commences work after receipt of an order to commence may well have its conduct in commencing the work objectively construed as an acceptance of the order because objectively sensible business people would expect that commencement without reservation suggests acceptance of the order.

Euro Construction Scaffolding Ltd v SLLB Construction Ltd [2008] EWHC 3160 (TCC) (19 December 2008)

Fri, 19 Dec 2008 10:58:00 GMT

C was engaged to provide scaffolding at a property which D was developing. This engagement gave rise to disputes which were referred to adjudication and in which C was successful in obtaining an award for the payment of certain sums from D. A jurisdictional issue arose as to whether there was a contract in writing for the purposes of section 107 of the Housing Grants Construction and Regeneration Act 1996 and whether D had made a clear and full reservation in respect of the adjudicator’s jurisdiction. Akenhead J found that D had sufficiently reserved its position as to jurisdiction as a letter from the adjudicator to the parties had recorded D’s position as being that there was no written contract between the parties in respect of certain elements of the scaffolding. The Judge further found that a written quotation contained all of the agreed terms. Some oral communications which D claimed implied a term of fitness for purpose (and therefore were not made in writing for the purposes of section 107 of the Act) were not made in the language of agreeing terms but of making the function of the scaffolding clear to D; they were communications as to the purposes of the scaffolding as opposed to being binding terms about the fitness for purpose of the scaffolding. As such, the contract was in writing.

Reinwood Limited v L Brown & Sons Limited

Thu, 11 Dec 2008 10:35:00 GMT

In a 2008 House of Lords decision relating to withholding notices, a Contractor claimed to be entitled to determine its JCT '98 Private with Quantities contract on the ground (amongst others) that the Employer had repeatedly failed to make payment of sums due under the contract by the final date for payment.

Air Design (Kent) Ltd v Deerglen (Jersey) Ltd [2008] EWHC 3047 (TCC) (10 December 2008)

Wed, 10 Dec 2008 10:59:00 GMT

C was engaged by D on a JCT intermediate contract to carry out the mechanical services in the construction of an office building. Certain additional works were then agreed through a course of correspondence. Disputes arose as to whether C had completed the works, the amount due to C, and whether there were any remaining defects. C referred the disputes to adjudication. The adjudicator found that the works had been carried out as part of a single contract and ordered D to pay C the sum of £139,964. C issued proceedings when D failed to pay. D submitted that, as there were disputes relating to at least three, if not four separate contracts, and since there was no adjudication clause in what were said to be the separate contracts relating to the additional works, the adjudicator had no jurisdiction over disputes arising out of those contracts.

Akenhead J held that from the time of making the supplementary agreement, the parties had agreed to treat their contractual relationship as stemming from one main contract and the additional works were therefore variations to the main contract. The decision making process that the adjudicator had to embark upon necessarily involved a consideration of whether there was more than one contract. It was therefore within the adjudicator's jurisdiction to decide whether there was one contract and whether or not there were variations to that contract. Having found that there was one contract, the adjudicator had jurisdiction to determine the dispute. The Judge went on to find that the adjudicator had correctly decided that there was only one contract since the main contract incorporated the standard JCT intermediate form of sub-contract, which contained provisions for variations.

Quartzelec Ltd v Honeywell Control Systems Ltd [2008] EWHC 3315 (TCC) (5 December 2008)

Fri, 05 Dec 2008 00:00:00 GMT

Q commenced an adjudication against H seeking an increased payment because of a change to the scope of works. The adjudicator awarded Q £135,000. H argued for certain deductions amounting to £36,500. Davies J found that the adjudicator had wrongly refused to consider H’s deductions on jurisdictional grounds. Davies J went on to find that this mistake invalidated the entire decision. Whilst the court has no general power to modify or adjust an adjudicator’s decision, if the adjudicator has decided two or more disputes in a single adjudication, the court can enforce some and not others on jurisdictional grounds. Q’s Notice of Adjudication referred to a single scope change. There was therefore only a single dispute even though Honeywell was entitled to raise defences to the adjudication which were not related to the scope change. Davies J notes that it was Q who had requested the adjudicator to take the jurisdictional objection. Having done so, Q was in a difficult position to complain when the whole decision fell down as a result.

Balfour Beatty Construction Northern Ltd v Modus Corovest (Blackpool) Ltd [2008] EWHC 3029 (TCC) (04 December 2008)

Tue, 02 Dec 2008 11:00:00 GMT

D engaged C to carry out the design and construction of a shopping centre. The contract incorporated the JCT Standard Form of Building Contract with Contracted Design (1998 edition) with amendments. A dispute arose between the parties as to whether B had performed work that entitled it to additional payment. The dispute was referred to adjudication. The adjudicator found in C’s favour. C applied for summary judgment to enforce the adjudicator's decision. D applied for summary judgment on its counterclaim for liquidated damages and its application to set off that counterclaim against C's claims.

Coulson J held that, although the adjudicator had stated that his decision was not ‘reasoned’, his decision was in fact a clear and cogent document. The adjudicator had addressed D's secondary defence (that payment should be through the final account process rather than by way of an interim payment) by deciding that C was entitled to be paid within seven days, not during the final account process. C was therefore entitled to summary judgment to enforce the adjudicator's award. D's application for summary judgment on its claim to set off liquidated damages against amounts owed to C was likely to fail. In compliance with the contract, D had issued C with a notice of the amount it proposed to pay on the relevant certificate and once that had been done, the contract expressly provided that D would have to pay that sum. It would be contrary to the Act if an employer could flout the withholding notice regime. Where there was no withholding notice, the employer should pay the sum due without recourse to counterclaims. C was therefore entitled to summary judgment for the interim payment, and D could not set off its counterclaim against sums due to C.

Allen Wilson Joinery Ltd v Privetgrange Construction Ltd [2008] EWHC 2802 (TCC) (17 November 2008)

Mon, 17 Nov 2008 00:00:00 GMT

Mr Justice Akenhead refused an application by the applicant sub-contractor (Allen Wilson) for summary judgment to enforce an adjudicator's award made against the respondent main contractor (Privetgrange). Privetgrange had argued that the adjudicator had no jurisdiction as there had been no written construction contract with s.107 of the Housing Grants, Construction and Regeneration Act 1996. One of Privetgrange's arguments was that there was no written contract as s.107 required all of the terms to be recorded in writing, that there were implied terms which were not recorded, and so any agreement did not qualify under s.107. Akenhead J. rejected this analysis, holding that the implication of terms did not affect whether or not a contract was a written one for the purposes of s.107. However, there was a triable issue as to whether the purported written agreement contained all of the expressly agreed oral terms, and so summary judgment would be refused. In any event, the adjudicator had no jurisdiction over interest in the absence of a contractual term to that effect.

Biffa Waste Services Ltd & Anor v Maschinenfabrik Ernst Hese GmbH & Ors [2008] EWCA Civ 1257 (12 November 2008)

Wed, 12 Nov 2008 00:00:00 GMT

The Court of Appeal allowed the appellant contractor's appeal against a decision of Ramsey J in which he had held the appellant vicarious liable for the negligence of a third party sub-contractor. Ramsey J. had so held based on two principles: that a party could be vicariously liable for the “borrowed” employees of a sub-contractor over whom it exercised supervision, and alternatively under the principle that “ultra-hazardous” acts imposed non-delegable duties. Reversing both aspects of this decision, the Court of Appeal held (1) that vicarious liability for “borrowed” employees should only be imposed exceptionally and when the borrower has control over them, and (2) that an act would only be “ultra-hazardous” and therefore impose a non-delegable duty if that act would be exceptionally dangerous regardless of the precautions which could be undertaken.

London & Regional (St George's Court) Ltd v Ministry of Defence & Anor [2008] EWCA Civ 1212 (06 November 2008)

Thu, 06 Nov 2008 00:00:00 GMT

The respondent landlord (London & Regional) had engaged a builder to carry out certain works. It agreed to incorporate into those works any variations requested by the appellant tenant (Ministry of Defence) provided that the tenant paid for the cost of those variations. A dispute regarding what was to be considered as a variation was settled as between the landlord and the builder, with the terms of the settlement agreement entitling the builder to proceed against the tenant in the name of the landlord. The tenant argued unsuccessfully at first instance that there could be no liability to pass along the contractual chain as the dispute had been compromised, and alternatively that there was no liability as the claimed work had not been certified as required. The Court of Appeal rejected the tenant's appeal on both grounds, holding (1) the landlord's liability was not discharged but simply suspended under the terms of the settlement, and (2) the certificate was only one of a number of methods of fixing the size of the liability, but was not a condition precedent to the liability arising.

Risegold Ltd v Escala Ltd [2008] EWCA Civ 1180 (28 October 2008)

Tue, 28 Oct 2008 00:00:00 GMT

Reisgold appealed against a decision of the lower court refusing to grant a declaration that it was entitled to enter the yard of an adjoining freehold property owned by Escala for 45 weeks for the purpose of carrying out proposed redevelopment works to its own property. When Reisgold purchased the property it acquired the right to enter Escala’s property and carry out “maintenance repair rebuilding or renewal”. The Court of Appeal held that the right of entry relied on by Reisgold covered its redevelopment of the property but that the exercise of the right was subject to important safeguards for Escala including protection from inconvenience, nuisance and damage suffered by it.

Reinwood Ltd v L Brown & Sons Ltd [2008] EWCA Civ 1090 (17 October 2008)

Fri, 17 Oct 2008 00:00:00 GMT

Brown (the contractor) gave Reinwood (the employer) notice that Reinwood had defaulted on a VAT payment due under an amended JCT Standard Form of Contract 1998 edition. The parties then agreed that Reinwood would pay a smaller amount than that originally claimed for VAT. Some months later, Brown gave Reinwood a second notice specifying a default in relation to a separate issue. Brown then served a notice of determination in respect of the second notice of default but did not mention the first default. In earlier proceedings it was held that the second notice of default did not justify the determination. The Court of Appeal was asked to decide whether Brown was entitled to determine the contract on the basis of the first notice. The Court found that Brown had not waived its right to rely on the first default notice as it had done nothing to indicate the same. Further, the JCT 98 specified the use of the default notice procedure cumulatively rather than just on one occasion.

Kier Regional Ltd (t/a Wallis) v City & General (Holborn) Ltd & Ors [2008] EWHC 2454 (TCC) (17 October 2008)

Fri, 17 Oct 2008 00:00:00 GMT

The contractor, who had been successful at adjudication against the employer, sought a third party debt order from companies it though owed money to the employer. The Court declined to make the order because the contractor could not establish that the third parties actually owed money to the employer. The case sets out useful guidance for those seeking or defending such orders including the prejudice suffered to the third party and whether the judgment debtor is in liquidation.

Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd & Anor [2008] EWHC 2220 (TCC) (29 September 2008)

Mon, 29 Sep 2008 00:00:00 GMT

CBUK was engaged by Multiplex to design, fabricate and erect the steelwork for the new Wembley Stadium. In August 2004 CBUK repudiated its contract (that issue having been determined as a preliminery issue in a previous trial). In this case Multiplex sought to recover the losses that it had incurred following the repduiation, which included the cost of employing an alternative contractor, and also losses incurred period of delay to the project. Jackson J concluded that Multiplex has not sufficiently demonstrated its losses and declined to award Multiplex damages in this regard. However, Multiplex was successful on other issues including the valuation of the work that CBUK had carried out prior to its repudiation and was also successful in its defects claim. Overall, Multiplex received approximately £6m from CBUK. Whilst most of the decision turns on its peculiar facts, Jackson J set out certain conclusions to be drawn from construction litigation and emphasised that it is rarely sensible for the Court to decide the financial consequences of disputes of this nature.

VGC Construction Ltd v Jackson Civil Engineering Ltd [2008] EWHC 2082 (TCC) (15 August 2008)

Fri, 15 Aug 2008 00:00:00 GMT

An adjudication award was made in favour of C (a sub-contractor) against D (the main contractor) in relation to applications for payment that included a delay and disruption element (“the Delay Claim”) in relation to a 26-week overrun. D failed to pay and C commenced enforcement proceedings. D argued that the adjudicator had no jurisdiction to deal with the Delay Claim because (a) it was too nebulous and ill-defined to amount to a dispute, (b) C had withdrawn it prior to the adjudication, and (c) the claim ultimately formulated was new, in that it emerged for the first time during the course of the adjudication. Held: (1) the mere fact that the Delay Claim was described in a single line in an application for payment did not necessarily mean it was ‘nebulous or ill-defined’; it was necessary to have regard to the full context; on the evidence, the claim would in fact have been sufficiently clear to D to amount to a dispute; (2) the Court would not accept that C had ‘withdrawn’ the claim without evidence of the clearest representation by C to that effect; there was no such clear evidence; (3) in reply to D’s Response, C may have formulated the claim in detail for the first time but it did not follow that the claim itself was ‘new’ so as to oust the adjudicator’s jurisdiction.

Galliford Try Infrastructure Ltd (Formerly (A) Morrison Construction Limited & (B) Morrison Construction Services Ltd v Mott MacDonald Ltd & Rowen Structures Ltd QBD TCC Akenhead J 01/08/08

Fri, 01 Aug 2008 00:00:00 GMT

The Claimant was a design and build contractor retained by a building development company to redevelop a hospital. A wholly owned subsidiary of the developer had retained the Defendant consulting engineers to provide structural and building engineering services including major elements of the design of the works. Prior to the Claimant being retained, the Defendant and the Claimant had begun to liaise directly. Negotiations took place with a view to the Defendant’s contract with the developer being novated to the Claimant. However, such negotiations broke down with the result that there was no direct contractual relationship between the Claimant and the Defendant. However, the Claimant argued that in tendering for the design and build contract it had placed reliance upon the Defendant’s conceptual design which was negligent with the result that the Claimant has suffered substantial losses in connection with the project. Akenhead J held that the Defendant did not owe a duty of care to the Claimant for economic loss because, amongst other things, the Defendant’s drawings contained liability disclaimers. In any event, the Judge confirmed that in normal circumstances a consultant who is engaged by a developer to provide tender information, owes no duty of care to a contractor to prevent it under pricing the works.

Makers UK Ltd v London Borough of Camden [2008] EWHC 1836 (TCC) (25 July 2008)

Fri, 25 Jul 2008 00:00:00 GMT

The contract between the parties provided that RIBA was the body responsible for nominating the adjudicator in the event of an adjudication. The Claimant’s solicitor telephoned a particular adjudicator that was on the RIBA panel to check his availability. The Claimant’s solicitor then wrote to RIBA inviting RIBA to appoint that specific adjudicator, which RIBA duly did. In resisting enforcement of the adjudicator’s decision, the Defendant argued that the adjudication was tainted by the appearance of bias, especially because the adjudicator and the Claimant’s solicitor had spoken on the telephone. The Judge disagreed but gave guidance that individual parties should limit unilateral contact with adjudicators at all times and when this cannot be avoided, copies of any correspondence should be sent to the other side.

West London Pipeline and Storage Ltd & Anor v Total UK Ltd & Ors [2008] EWHC 1729 (Comm) (22 July 2008)

Tue, 22 Jul 2008 00:00:00 GMT

The Claimant sought disclosure of an incident report that had been prepared following an explosion at an oil storage terminal. The Claimant argued that the report would not attract privilege since the operator of the terminal had a duty to report about the explosion pursuant to the Control of Major Hazard Regulations 1999 and therefore the report had primarily been commissioned in compliance with the Regulations. The Court held that whilst there might be a duty to report under the Regulations, the dominant purpose of the report could be, as claimed the Defendant, to investigate who was responsible for the explosion and therefore in contemplation of legal proceedings.

FIRST) CSC BRAEHEAD LEISURE LIMITED and (SECOND) CAPITAL & REGIONAL (BRAEHEAD) LIMITED v (FIRST) LAING O'ROURKE SCOTLAND LIMITED and (SECOND) LAING O'ROURKE PLC [2008] CSOH 93

Thu, 26 Jun 2008 09:11:00 GMT

Commercial action. Pursuers were developers of Braehead Retail and Leisure Development. The development included a lease to Odeon Cinemas for a “multiplex” cinema containing 12 auditoria. The pursuers contracted with the first defenders for building works to be carried out. Further, Odeon Cinemas own contractors were to carry out “tenant works” throughout the development. The defenders’ motion was to allow a counterclaim and to grant warrant to serve third party notices on four parties. Argued that motion should not be granted due to complexity and cost it would add. Argued that if motion not granted, likelihood of successive actions involving investigations of the same body of evidence. Motion granted.

Diamond Build Ltd v Clapham Park Homes Ltd [2008] EWHC 1439 (TCC) (25 June 2008)

Wed, 25 Jun 2008 00:00:00 GMT

A letter of intent sent by D to C referred to the parties’ intention to enter into a JCT Intermediate contract. The letter of intent also stipulated, amongst other things, a commencement date, a completion date and a cap on any reimbursement that D would have to pay to C in the event that it was not possible for the parties to execute a formal contract in place of the letter. C signed and returned the letter of intent and commenced the works. Thereafter delays occurred and D sought to terminate the agreement relying upon the provisions contained in the letter of intent. C argued that the letter of intent did not give rise to a contract; it was a mere request for mobilisation rather than a substantive instruction for work. Alternatively, C argued that the contract under the letter of intent lapsed in favour of a JCT Intermediate contract upon commencement of the works. It was held that there was sufficient certainty in the letter of intent to give rise to a simple contractual arrangement. The parties must have been aware that the intention was that they would enter into a formal JCT Intermediate contract. However, it was for the parties to decide how and when that formal contract came into existence. The letter of intent was the governing contract until a formal contract was signed, which it never was.

Mopani Copper Mines Plc v Millennium Underwriting Ltd [2008] EWHC 1331 (Comm) (16 June 2008)

Mon, 16 Jun 2008 00:00:00 GMT

This was a dispute about the interpretation of a policy of reinsurance to which D had subscribed. The policy was described in a slip as a construction all risks policy which covered the testing and commissioning of certain plant. C emailed D seeking clarification about the coverage and querying whether it needed additional cover because there was to be a gradual handover of parts of the plant as testing and commissioning were completed. An amended slip was issued and the reference to operational risks was crossed out in part and the words “to be agreed” were added. C then made a claim on the policy. D resisted the claim on the basis that the completed elements of the plant were not covered once they became operational (it was only testing and commissioning that was covered). Clarke J held that there is a clear distinction between a construction policy and an operational policy. Any application to extend a construction policy to cover operation risks would have to be in very precise terms. The result of the email negotiations was that operational cover had not been needed because there would be no operations after commissioning but before final handover. Therefore, the contract of reinsurance did not cover the completed parts of the plant once they became operational.

Crest Nicholson (Eastern) Ltd v Western & Anor [2008] EWHC 1325 (TCC) (16 June 2008)

Mon, 16 Jun 2008 00:00:00 GMT

An arbitrator was appointed by the RICS to act in a dispute under the National House Building Council Buildmark Scheme. C argued that the arbitrator did not have jurisdiction as the disputes procedure under the Scheme was insufficiently certain to amount to a binding arbitration agreement under the Arbitration Act 1996. In the alternative, C argued that the Chartered Institute of Arbitrators, and not the RICS, was the appointing body under the Scheme. The Court held that the Scheme regulated the relationship between builders and the council and had nothing to do with the relationship between the builder and the house owner (D in this case). Therefore, the Scheme did not contain an arbitration agreement between C and D. Even if the Scheme did amount to a binding arbitration agreement, the Chartered Institute of Arbitrators, and not the RICS, was the appointing institution. C was therefore correct in its challenge; the appointed arbitrator had no jurisdiction.

Tyco Fire & Integrated Solutions (UK) Ltd v Rolls-Royce Motor Cars Ltd [2008] EWCA Civ 286 (02 April 2008)

Wed, 02 Apr 2008 00:00:00 GMT

D was the employer under a contract with C whereby C agreed to provide fire protection services for a new manufacturing plant. The contract required D to maintain insurance for the works in joint names against against specified perils including bursting of water pipes. A mains water pipe burst which was assumed to be as a result of C’s negligence. At first instance the court held that C was relieved of liability for any negligence because of the joint names insurance on the basis that one joint named insured could not recover from another joint named insured in respect of the same loss. The CA heard an appeal brought by D. The CA held that there was no express language to emphasise that there was a special regime in relation to the existing structures which excluded C's obligations found elsewhere in the contract although the position might be different so far as damage to the works was concerned, save where negligence was concerned. The obligation to insure in joint names only extended to the specified perils so far as loss by such perils had not been caused by negligence. The observations made in Cooperative Retail Services v Taylor Young Partnership were specific to that particular contract and were not a rule of law.

Barry McKay v Renlon Ltd, QBD (Judge Seymour QC), 19/03/08

Wed, 19 Mar 2008 00:00:00 GMT

C was in business as a lessor of residential accommodation and had engaged D to damp-proof a property. Although D had recommended the application of a Sika coating he had actually applied render. Post works, C discovered that water had penetrated the property affecting a section of a party wall. C alleged he had sustained loss as D had left a gap in the render above the floor slab. D maintained that a screed had been laid down before the damp-proofing had been applied and that, by virtue of a clause which provided that D could reserve the right to alter specifications in the interests of progress and efficiency without prior notice, he was not in breach of contract. D also stated that it had not been proved that the ingress of water was owing to deficiencies in his work. Held that the contract did not permit D to have an unlimited ability to change from a contractual damp-proof treatment to a different one; the change could only be made in the interests of progress and efficiency and any changed treatment had to be as effective as the contractual treatment. The work of application of the render to the party wall was not carried out in accordance with the requirements of the contract between the parties, not only because the Sika coating was not applied, but also because the work was not done properly by having the render lapped onto the floor slab. There was also no positive evidence to suggest that the water came from anywhere else. Judgment for C.

Edenbooth Ltd v Cre8 Developments Ltd [2008] EWHC 570 (TCC) (13 March 2008)

Thu, 13 Mar 2008 00:00:00 GMT

D was a development company which had engaged C to carry out groundworks, including foundation works, and drainage works at two adjacent residential properties. One of the properties was owned by a director of company A. After completion of the works C claimed it was entitled to further sums. The adjudicator held that C was entitled to an additional sum of £14,126.91. A argued that summary judgment should not be granted as (1) the work carried out by E was not a construction operation; (2) it was a residential occupier; and (3) the adjudicator had acted unfairly. Held (1) that groundwork and drainage works were clearly construction operations; (2) A was a company and the use of the word "residential" meant that a real person must be living in the house or flat in question and as D was engaged in property development the suggestion that the work was being carried out by or on behalf of a residential occupier was not negated; (3) the conduct of the adjudication was not unfair.

Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC) (27 February 2008)

Wed, 27 Feb 2008 00:00:00 GMT

D had engaged C to carry out demolition, piling and other works in respect of two buildings pursuant to a JCT Standard Form. The parties fell into dispute regarding C's entitlement to extensions of time together with related loss and expense. During an adjudication D argued that the losses claimed by C could not be recovered because they related to a later period than the period for which the extension of time was claimed. The adjudicator held that he was not bound by the same period when considering prolongation related costs and identified a later period of over nine weeks prolongation for which C was entitled to be compensated. D contended, in C’s application for summary judgment, that the adjudicator had exceeded his jurisdiction and failed to comply with the rules of natural justice as he should not have addressed any issue relating to a delay occurring and prolongation costs being incurred in a different period. Held that summary judgment should be granted as there had not been a material breach of the rules of natural justice. In relation to natural justice in adjudication cases the Judge held that the party seeking to resist enforcement needed to establish (a) that the adjudicator failed to apply the rules of natural justice; and (b) that the breach was material. For a breach to be material it was necessary for the adjudicator to have failed to allow the parties the opportunity to comment upon an issue which was decisive or of considerable potential importance to the outcome of the resolution of the dispute which was a question of degree. The judge also indicated, obiter, that if a decision properly addressed more than one dispute, a successful jurisdictional challenge on that part of the decision which dealt with one such dispute or difference would not undermine the validity and enforceability of that part of the decision which dealt with the others.

Reinwood Ltd v L Brown & Sons Ltd [2008] UKHL 12 (20 February 2008)

Wed, 20 Feb 2008 00:00:00 GMT

The House of Lords gave its decision on s.111 withholding notices under the Housing Grants, Construction and Regeneration Act 1996 in the context of the deduction of liquidated damages (LDs) under the JCT Standard Form of Building Contract 1998 edition. The issue for the House was whether an employer who served a withholding notice intending to deduct LDs from an interim payment was entitled to withhold LDs after an extension of time had been granted in advance of the final date for payment, i.e. are employer’s rights altered by events that occur between the giving of the withholding notice and the final date for payment. The House dismissed the appeal, holding that an employer may withhold LDs against payment due to the contractor under an interim certificate despite the grant of an EOT where he has paid against the withholding notice early. The House of Lords considered that the policy of the 1996 Act provided a regime with notices so that parties are entitled to know where they stand. In the present case, the employer was entitled to give the withholding notice when it did and it had paid in reliance on that notice before the extension had been granted. The employer would then be obliged to repay the liquidated damages under clause 24.2.2 in accordance with the default provisions of the Scheme. Lord Neuberger said that this would be due after 7 days and the final date for payment would be 17 days. The fact that the employer had paid early in reliance on its withholding notice seems to have been the deciding factor in the case. The House expressly left open for debate whether the result might have been different if the extension of time had been issued before the employer had paid in advance of the final date for payment. Lord Neuberger, giving the lead opinion with which the other Lords agreed, said there was “undoubtedly a case” for saying that the Employer would not have succeeded upon those facts: there was a difference between paying out on the strength of a notice which was accurate at the time of paying and paying out in reliance on a notice which is no longer accurate. The House acknowledged there were arguments either way and because it was not “tolerably clear” it would be “wrong to express a view on this outstanding question”. Lord Hope, giving additional reasons, thought that a contractor was not in a position to complain about non-payment of the amount properly due unless he had referred to adjudication, before the final date for payment, a dispute concerning the claimed entitlement in the withholding notice.

Orange Personal Communications Services Ltd v Hoare Lea (A Firm) [2008] EWHC 223 (TCC) (12 February 2008)

Tue, 12 Feb 2008 00:00:00 GMT

D applied for a stay of Part 20 proceedings against it by C on basis of C’s non-compliance with the pre-action protocol for construction and engineering disputes. C argued that the protocol process was a waste of time because its claim against D was contingent on claims involving other defendants. Akenhead J held that the protocol applied to Part 20 proceedings. He held that the court should adopt a pragmatic approach to granting a stay, particularly where Part 20 proceedings were under consideration, as non-compliance could always be compensated in costs. D’s application for a stay was dismissed because the protocol process at this stage would not be sufficiently productive to justify a stay.

Drake v Harbour [2008] EWCA Civ 25 (31 January 2008)

Thu, 31 Jan 2008 00:00:00 GMT

A had engaged R to carry out electrical works at her home and a fire had broken out during the course of the works. The fire had started in the loft after R had gone home (but whilst the property was vacant as A had moved out). A had claimed damages in an action in negligence. The first instance judge found that the fire had been caused by arcing from the festoon lights and that the cable had not been new (contrary to R’s evidence). As R had been in sole control of the property when the fire had broken out the judge found that res ipsa loquitur applied. R appealed on the basis that (i) the maxim had no application as the judge had heard evidence of fact to the contrary and conflicting expert evidence; and (ii) there were alternative causes of the fire which were inconsistent with the finding of negligence. The CA found that there was no need to consider the application of the maxim res ipsa loquitur and the appeal should be dismissed as (i) the conclusion of negligence was open to the judge on the evidence available; (ii) there was no evidence to support any of the alternative causes suggested by R nor had some of the suggested causes been pleaded. If a claimant was able to prove that a defendant was negligent this would be sufficient to enable a court to infer that this was the reason that the damage was caused even if the claimant was unable to prove the precise mechanism positively.

Shepherd & Neame v EDF Energy Networks (SPN) Plc, QBD (TCC) Akenhead J, 29/01/08

Tue, 29 Jan 2008 00:00:00 GMT

Proceedings had been issued by C1 and C2 against three defendants, including D1 and two others. Following negotiations D2 and D3 were no longer parties to the litigation but not before technical expert reports had been instructed by them and disclosed to the other parties. C1 applied for permission to rely upon those reports at the beginning of the trial under CPR 35.11. D1 resisted this application on the basis that it was incumbent on the court to restrict expert evidence to that which was strictly necessary. It was held, however, that CPR 35.11 operated so as to allow every party the option of relying upon expert evidence notwithstanding that the party who had instructed the report was no longer a party to the proceedings and C1’s application was granted.

Kajima UK Engineering Ltd v The Underwriter Insurance Company Ltd [2008] EWHC 83 (TCC) (25 January 2008)

Fri, 25 Jan 2008 00:00:00 GMT

Kajima was the main contractor employed to design and build a block of flats involving the novel application of installation of a stacked pre-constructed pod and flat pack construction. The Insurer provided professional indemnity insurance on a ‘claims made’ policy, under which it was open to Kajima during the period of insurance to notify the Insurer of circumstances which might reasonably be expected to produce a claim. During the course of the works, Kajima notified the Insurer that the pods were settling and moving excessively, causing adjoining roofing, balconies and walkways to distort under differential settlement, and that investigations were being carried out (“the notification”). Several years later, after the period of insurance had ended, the ongoing investigations revealed that the flats were at risk of collapse due to wind loadings, and the tenants were evacuated. The Insurer argued that the defects discovered during the ongoing investigations were not of the same type as, and not directly associated with, the matters in the notification. Akenhead J applied the decision of the Commercial Court (Gloster J) in HLB Kidsons v Lloyds Underwriters, holding that the notification was effective only in relation to the specific circumstances noted. Although the investigations which eventually revealed the defects in the flats were instigated by reason of the notified circumstances, this “historical continuum” was insufficient where the defects subsequently discovered after the period of insurance were unrelated to the notified circumstances. There must be some causal relationship between the defects and the notified circumstances: by way of example, Akenhead J stated that the notification would cover either (i) the defects which caused the notified circumstances; (ii) the symptoms of the notified circumstances; or (iii) the consequences of the notified circumstances.

Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd & Anor [2007] EWCA Civ 1372 (21 December 2007)

Fri, 21 Dec 2007 00:00:00 GMT

The Court of Appeal allowed in part Multiplex’s appeal against the decision of Jackson J in a preliminary issue hearing of one of a number of disputes arising out of the steelwork sub-contract. The preliminary issue was whether (as Multiplex argued) Cleveland Bridge (CB) was responsible for carrying out temporary works to support the roof of the stadium under the fixed price Supplement Agreement (entered into between the parties after disputes arose under the steelwork sub-contract), or whether (as CB argued) these works were to be carried out on a cost plus basis. At first instance Jackson J held that the design, drafting and fabrication of the temporary works relating to the roof did not form part of the fixed sum scope of works, but was to be carried out on a cost plus basis; CB having failed to carry out these works, Multiplex was not therefore entitled to claim as damages for repudiation the cost of engaging another sub-contractor to carry out these works. The Court of Appeal (May LJ giving the leading judgment) overturned in part Jackson J’s decision, finding that the fabrication and supply of the temporary roof steelwork (but not the design and fabrication drawings) was omitted altogether from the scope of the fixed price Supplemental Agreement. Although this decision concerned the construction of a short clause of a one-off agreement, it is of some interest in that May LJ rejected CB’s argument that commercial commonsense dictated that “whoever erects the roof must also be responsible for the design and fabrication of the temporary work”.

Nigel Witham Ltd v Smith & Anor [2007] EWHC 3027 (TCC) (19 December 2007)

Wed, 19 Dec 2007 00:00:00 GMT

C had been appointed by D to carry out a concept plan for proposed construction works and to redesign the interior. C submitted a concept design and entered into two agreements, the latter of which required C to carry out the detailed design for the project and to project manage the proposed building works. The agreement provided that C's fees were to be paid in monthly instalments by reference to the anticipated progression of the programme of works but failed to provide for any variation to those payments if the progress of the detailed design became delayed (which ultimately was the case). D experienced cash flow problems which resulted in a three month suspension of the detailed design but on resumption of work a dispute arose and C stopped work. D ultimately wrote to C advising that its services were no longer required following a dispute over the fees (although D also indicated that the design which had been produced would still be used). C therefore claimed fees and D counterclaimed for, amongst other things, an overpayment to W. It was held that C had wrongfully repudiated the contract when it stopped work unilaterally and had sought to require D to pay for services on a duplicate basis but this did not deprive C of its full entitlement to all fees earned up to the time of the repudiation. C was entitled to payment on a percentage basis and, taking D's counterclaim into account, C was entitled to payment of only £1,320 (compared to a claim in excess of £90,000).

AXA Insurance UK Plc v Cunningham Lindsey United Kingdom (An unlimited Company) [2007] EWHC 3023 (TCC) (18 December 2007)

Tue, 18 Dec 2007 00:00:00 GMT

AXA brought a claim for professional negligence against loss adjusters, CL, in relation to the reinstatement of an old farmhouse, which had suffered subsidence for which AXA had accepted liability under a householder's policy. CL was retained by AXA to provide services in connection with that reinstatement. Whilst the original sum insured was just over £200,000, and the expectation when CL was involved was of a reinstatement cost of much less than £100,000, the eventual cost to AXA was said to be over £1.5 million. AXA claimed that the bulk of this cost was attributable to CL’s negligence, which was so extensive and all pervading that AXA was left in a position which was so difficult that the only way out, having embarked upon the re-instatement option, was to do whatever was necessary to make the house inhabitable. The major area of dispute between the parties was quantum and causation. AXA adopted a “top-down” approach to the quantum issues (i.e. taking the total costs and losses allegedly incurred and then deducting any elements not sufficiently causatively linked to the pleaded negligence). CL adopted a “bottom up” approach, i.e. pricing those defects for which it accepted liability. Applying the judgment of Lord Hoffman in Banque Bruxelles Lambert v Eagle Star Insurance Co Ltd [1997] AC 191 (who warned that rules making the wrongdoer liable for all the consequences of his wrongful conduct were exceptional), Akenhead J held that the top-down approach was inappropriate because many of the alleged breaches had not been proved, and the established breaches as a whole were not as pervasive as alleged by AXA. Akenhead J held that CL’s “bottom up” approach was not wholly appropriate either, and that the correct measure of damage was: (a) to ascertain what it actually cost AXA to put right the established defects; (b) to assess whether those costs were reasonable or not unreasonable; and if not, (c) determine what would be a reasonable cost, which might involve considering the market rate.

Heifer International Inc v Helge Christiansen & Ors [2007] EWHC 3015 (TCC) (18 December 2007)

Tue, 18 Dec 2007 00:00:00 GMT

A Danish architect (D1), through his firm (D2) was engaged by an offshore company (C) owned by a Russian to design the refurbishment of a property in England. D3, D4 and D5 were Danish contractors engaged by C to carry out the refurbishment works. C issued a claim in the TCC for an account of moneys paid to the Defendants on the basis that the works were not completed, and claimed damages for defects in the design and construction of the works. The Defendants applied for a stay of the proceedings on the basis that D2-D5 carried out work pursuant to contracts which contained an arbitration clause referring any disputes to Danish arbitration. C opposed the application, arguing that the arbitration clause was not incorporated into the contracts; and, in the alternative, these terms were unfair and not binding pursuant to regulation 8 of the Unfair Terms in Consumer Contracts Regulations 1999. HHJ Toulmin QC applied the approach outlined by Longmore LJ in Fiona Trust Corp v Privalov [2007] EWCA Civ 20, i.e. that any jurisdiction or arbitration clause in an international commercial contract should be liberally construed, and found that the contracts with D2-D5 contained an arbitration clause within section 5 of the Arbitration Act 1996. The arbitration clause was held to be fair and binding largely because C had chosen to engage a Danish architect, his Danish firm, and Danish workmen; and C’s Danish lawyers had prepared the contracts.

Daniel Contractors v CITB (2007) HC, Kenneth Parker QC, 05/12/07

Wed, 05 Dec 2007 00:00:00 GMT

At first instance an employment tribunal had upheld the issue of a levy assessment notice by the CITB. C, a service provider to the utilities industry which specialised in carrying out the rehabilitation of the water or distribution mains that made up the water distribution network, appealed this decision. The employment tribunal held that the water distribution network on which C worked was a pipeline for the purposes of the Industrial Training Levy (Construction Board) Order 1992 and held it made no difference that the particular pipelines worked on by C had smaller pipes branching off them. C contended that the employment tribunal should have adopted a more restrictive meaning of "pipeline". This argument was rejected on appeal. The tribunal had used the dictionary definition of ‘pipeline’ as a starting point only. "Pipeline" was not directly linked to water-based assets in the regulations and should therefore be given a wide meaning as it was not necessarily limited to a conduit of water only.

PC Harrington Contractors v Multiplex, QBD (TCC) Christopher Clarke J, 30/11/07

Fri, 30 Nov 2007 00:00:00 GMT

D was the main contractor for the design and construction of Wembley sports stadium. C was appointed as a sub contractor and its sub contract required applications for payment to be made following an inspection by D of the work completed. If the amount due was not agreed C could issue an application following which D could issue a payment certificate for the amount that it considered to be due. During the course of the works C submitted an application for payment which was rejected by D which issued an interim payment certificate stating that the sum owed to C was outweighed by D’s claims for incomplete or defective work. D issued a notice of adjudication following C’s refusal to accept liability for the defects alleged. C applied for a declaration that D owed the sum which it had certified was due and payable (prior to the deduction of any other sums for defective work). This was rejected by the Court; the sum due to be paid was the amount specified by D in the payment certificate as the amount it proposed to pay. The sum identified in the payment certificate as the "nett payment [that] month" did not represent what D accepted or certified as a sum that C was entitled to receive and C could not take the credit items in its favour without the debit items also being taken into account.

PC Harrington Contractors Ltd v Multiplex Constructions (UK) Ltd [2007] EWHC 2833 (TCC) (30 November 2007)

Fri, 30 Nov 2007 00:00:00 GMT

This case concerned the interpretation of payment terms of a sub-contract in light of ss.109 to 113 of the HGCRA 1996, with which they were intended to be consistent. C was D’s concrete works package sub-contractor for the construction of the New Wembley National Stadium. A dispute arose over the valuation of the sub-contract works. C issued a claim in the TCC for further payment under the subcontract of over £17m; D alleged that C’s works were incomplete and defective. In the meantime, D referred a dispute over specific defects in the flooring (worth £2m) to adjudication. In the TCC, C sought a declaration on the Interim Certificate which related to the flooring, the effect of which would be that C would start the adjudication with £2m in hand. Clarke J declined to grant the declaration on the basis that the Interim Certificate did not represent what D accepted or certified to be due to C, as those sums were subject to deductions for defective work. C could not take the credit items in its favour without the debit items which formed an intrinsic part of the calculation.

Aldi Stores Ltd v WSP Group Plc & Ors [2007] EWCA Civ 1260 (28 November 2007)

Wed, 28 Nov 2007 00:00:00 GMT

The Court of Appeal overturned a decision at first instance to strike out a claim on the basis of abuse of process. D had been retained as engineering consultants on a contract to construct stores for C and B (and had provided warranties as to proper performance of its obligations). The stores suffered subsidence causing damage. C brought a claim against the building contractor (X), and when X went into administration joined D as Part 20 Defendant. B also brought a separate claim against X to which D was joined as Part 20 Defendant. C obtained a judgment against X and sought to enforce it against X’s insurers, which was only partially successful (the excess layer insurers refused to pay). In the meantime B’s claim against X and D was settled during trial. C then issued proceedings against D alleging breach of the warranties. At first instance, Jackson J struck out C’s claim as an abuse of process on the basis that it was an attempt to litigate the same alleged breaches of warranty for a second time. The Court of Appeal overturned Jackson J’s decision, which was characterized not as an exercise of discretion but as a decision involving assessment of a number of factors. Although an appellate court would be reluctant to interfere, the CA considered that Jackson J’s decision was impermissible because (a) as was clear in Johnson v Gore Wood (2002) 2 AC 1 the fact that a claim could have been raised in an original action did not mean it was necessarily abusive to raise it in a second action; (b) J did not take into account that C had not behaved culpably or improperly; and (c) although D had been sued by B, D had not been sued by C before.

Harris Calnan Construction Co. Ltd v Ridgewood (Kensington) Ltd [2007] EWHC 2738 (TCC) (15 November 2007)

Thu, 15 Nov 2007 00:00:00 GMT

C brought an application for summary judgment to enforce an adjudicator’s decision. D objected (as it had during the adjudication proceedings) on the basis that the adjudicator had no jurisdiction because the contract was not in writing (a letter of intent having been issued). However, it was found that D had not reserved its position on jurisdiction during the adjudication proceedings, and in particular when issuing its submissions in writing on jurisdiction to the adjudicator. In the absence of an express reservation of its position, HHJ Coulson QC found that D appeared to be content to be bound by the adjudicator’s decision on jurisdiction and that he was therefore bound to enforce the decision.

Harris Calnan Construction Co Ltd v Ridgewood (Kensington) Ltd, QBD (TCC) HHJ Coulson QC, 15/11/07

Thu, 15 Nov 2007 00:00:00 GMT

C applied for summary judgment and for indemnity costs following C obtaining an adjudicator’s award in its favour against D. D had challenged jurisdiction but these submissions had been rejected by the Adjudicator. In awarding summary judgment and indemnity costs the Court held (1) there was no jurisdictional bar to the application for summary judgment – D had not reserved its position during the adjudication viz the adjudicator’s determination of whether he had jurisdiction and the adjudicator was right to find that there was a binding contract in writing; (2) C had not required the court's permission to serve the claim form outside the jurisdiction - the JCT 2005 Form provided that the English courts should have jurisdiction and had been incorporated into the contract; and (3) the absence of a statement of the ground on which C was entitled to serve it out of the jurisdiction in the claim form could not justify the court saying that there had been no service and there was no question of prejudice being suffered; and (4) where D knew /ought to have known that it had no defence to a claim to enforce an adjudicator’s decision an order for indemnity costs was appropriate.

The appellant Secretary of State appealed against a decision that the liability to repay overpayments of benefit terminated on discharge from bankruptcy.

Thu, 01 Nov 2007 00:00:00 GMT

Pursuant to a construction contract D had agreed to carry out preliminary ground work on C's site. D delayed carrying out the works. D rendered a number of invoices some of which were paid but a number of which were not. D issued a statutory demand in respect of the outstanding invoices. C contended it had incurred additional financing charges as a result of D’s delays which it was entitled to recover from D and which, once offset, reduced D's claim to nil (and meant that C was owed money). C applied for an injunction restraining D from presenting a winding-up petition. It was held that the claim for additional financing costs was a genuine and substantial cross-claim and it would be appropriate to restrain presentation of a winding-up petition.

Treasure & Son Ltd v Dawes [2007] EWHC 2420 (TCC) (25 October 2007)

Thu, 25 Oct 2007 00:00:00 GMT

D had engaged C to carry out extensive refurbishment works at his home pursuant to a construction contract that incorporated the JCT Standard Form of Prime Cost Contract (1998 Edition with Amendments 1 and 2). C was paid £14 million but maintained that a further £1.5million was outstanding (of which £634,000 was for work carried out after completion). C maintained that these works had been oral variations to the contract. The dispute was referred by C to adjudication and the adjudicator held that D was liable to pay approximately £1 million. C applied for summary judgment. In granting the same the Court held (1) where, as here, there was a contractual agreement to adjudicate, the entitlement to adjudicate was not affected by the fact that the terms of the original contract had been orally varied; (2) the fact that the adjudicator’s decision was unsigned did not affect it validity as a matter of contractual interpretation; and (3) there was no evidence to indicate that it was appropriate to stay execution of the summary judgment due to C's financial position (C having proven trading and accounting history).

Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd [2007] EWHC 2421 (TCC) (23 October 2007)

Tue, 23 Oct 2007 00:00:00 GMT

D had employed C to carry out works at its premises subject to an amended JCT standard form of building contract with contractor's design 1998 edition, incorporating amendments 1 to 5. C had submitted a final account which was for a sum in excess of the original contract value and was disputed by D. A year later C submitted an interim application for a net sum which gave detailed explanations as to the basis upon which the claims for payment were being made. Six weeks later D responded with an alternative employer’s valuation. C’s entitlement to payment was referred to adjudication and the adjudicator held that the interim valuation was a valid application under clause 30.3.1 of the contract and that D had failed to respond with its own notice within 7 days as required by clause 30.3.3 and had therefore not provided an effective withholding notice under clause 30.3.4. Following an application to enforce, D argued that the adjudicator did not have jurisdiction to decide that C was entitled to sum claimed in its interim application because, amongst other things, the dispute had crystallised prior to the reference to adjudication in relation to application (as it had crystallized once the dispute as to the final account had emerged). Summary judgment was granted by the Court (1) the fact that there had been practical completion prior to submission of the interim application did not affect its validity under the contract terms – D had the opportunity to issue a withholding notice; (2) a dispute had crystallized in relation to the interim application; and (3) there was no need for the referral notice to have referred expressly to the absence of a clause 30.3.3 notice.

Cundall Johnson and Partners Llp v Whipps Cross University Hospital NHS Trust [2007] EWHC 2178 (TCC) (19 September 2007)

Wed, 19 Sep 2007 00:00:00 GMT

C (consulting engineer) brought claim for outstanding fees. D applied for a stay for non-compliance with the pre-action protocol on grounds that C had not set out its case properly in the pre-action correspondence. The Judge held that C did not comply with the requirements of the protocol and that the contractual basis of C’s claim remained obscure until issue of proceedings. The Judge in the exercise of his discretion ordered that there be a stay of three months to enable compliance, on grounds that there was a real possibility of settlement.

Mirimskaya v Evans & Anor [2007] EWHC 2073 (TCC) (05 September 2007)

Wed, 05 Sep 2007 00:00:00 GMT

C engaged D2 to carry out refurbishment works on her property. C became concerned about delay to the works and refused to pay outstanding sums. C claimed damages from D1, the proprietor of D2, claiming that no binding contract had been agreed; D2 counterclaimed for the outstanding sums. Each alleged the other had repudiated the contract. It was held that C had entered into two binding contracts with D1 and D2; C had repudiated the agreements by failing to pay sums due. However, D2 was not entitled to recover those sums since there had been a total failure of consideration, although D2 was entitled to recover loss of profits from C on account of C’s repudiation of the contracts.

Iggleden & Anor v Fairview New Homes (Shooters Hill) Ltd [2007] EWHC 1573 (TCC) (27 June 2007)

Fri, 27 Jul 2007 00:00:00 GMT

C was the purchaser of a new home from D, a housebuilder. In breach of the contract (which required the house to be built in a good and workmanlike manner) a number of defects appeared in the year after purchase. Liability for the majority of the defects was accepted by D and some payments were made to C; D also indicated that it was prepared to remedy the defects but C subsequently refused to allow C to do so. Subsequently there was a delay in any action being taken and C claimed damages from D in relation to the works. A number of factual issues were determined by the Court in relation to the defects and the following was held in relation to C’s entitlement to damages. (1) C had not acted unreasonably in rejecting offers made by D to carry out remedial works because those offers had not been for the remedial scheme since agreed and/or held to be necessary. D did not have a contractual right to carry out remedial works and C had not failed to mitigate their loss in refusing to allow D to do so and C was therefore entitled to damages in respect of the cost of the remedial works. (2) C had, however, failed to positive action themselves and periods of silence and inactivity were to their account. C had failed to mitigate their loss as a result of delay for which they were responsible and were not entitled to compensation for delay.

Pierce Design International Ltd v Johnston & Anor [2007] EWHC 1691 (TCC) (17 July 2007)

Tue, 17 Jul 2007 00:00:00 GMT

Applying the recent decision in Melville Dundas Ltd v George Wimpey UK Ltd (2007) 1 WLR 1136 (the first Construction Act case to reach the House of Lords), HHJ Coulson QC found that cl.27.6.5.1 of the JCT Standard Form of Building Contract, 1998 ed. (which allows an employer not to pay a sum despite the absence of a withholding notice) complies with s.111 of the Construction Act.

Ruttle Plant Hire Ltd v The Secretary of State for the Environment, Food and Rural Affairs [2007] EWHC 1773 (TCC) (16 July 2007)

Mon, 16 Jul 2007 00:00:00 GMT

C had been engaged to provide plant and labour on a hired basis for the purpose of controlling an outbreak of Classical Swine Fever. C originally claimed the outstanding balance of payments that were alleged to be due under a contract entered into between and a government department. The Court had considered 2 preliminary issues and had determined (i) that "reasonable notice" for taking any specific piece of plant off hire from the D to C was seven days notice in writing; and (ii) the rates for plant hire which had been agreed by the parties were those notified by C in 2 faxed documents. It had been subsequently agreed that where plant was not included in those rates, either (i) the Federation of Civil Engineering Contractors (FCEC) 1992 schedules should apply; or (ii) if no rate was available, a reasonable rate should be agreed between the parties, based upon industry custom and practice. C and D had been unable to agree star rates for certain outstanding plant and equipment items. Following judgment on a preliminary issue C applied for permission to insert new paragraphs in its Particulars of Claim to include (i) allegations in relation to industry custom and practice rates; (ii) adding further plant hire charges in respect of the 7 day notice period which D should have provided; and (iii) adding a copy of a final account including the revised figures as calculated. D opposed the application to amend on the basis of Henderson v Henderson (1843-60) and the overriding objective. The Court allowed the amendments. The rule in Henderson could not be invoked in order to prevent a party from pleading, at a late stage in litigation, issues which might have been pleaded earlier and there was no need to extend the rule to the sphere of amendment applications. The proposed amendments did not conflict with the overriding objective of the CPR.

Ruttle Plant Hire Ltd v The Secretary of State for the Environment, Food and Rural Affairs [2007] EWHC 1773 (TCC) (16 July 2007)

Mon, 16 Jul 2007 00:00:00 GMT

Drake v Harbour & Anor [2007] EWHC 1670 (TCC) (11 July 2007)

Wed, 11 Jul 2007 00:00:00 GMT

C had engaged D1 to rewire C's property. D2 assisted D1. D1 and D2 installed temporary festoon lighting in the loft to enable them to see whilst carrying out the works and C vacated the property. In the early hours of one morning, a fire was ignited; the seat of the fire was in the loft. C’s case was that it was more likely than not that the effective cause of the accident was an act or omission of D1 and D2 given that they were had sole control of the property. Expert evidence suggested that the cable had been live at the time of the fire and that arcing could have been an initiating event causing overheating, combustion and fire. Although C could not demonstrate the exact mechanism leading to the arcing and overheating that ultimately caused the fire, she had proved her case. It was likely that D1/D2 had failed to check that the insulation was not unacceptably damaged, or that any existing damage was not exacerbated by their activity in assembling the light fittings. Judgment against D1 (as employer). Damages awarded for cost of reinstatement and the cost of alternative accommodation.

Drake v Harbour & Anor [2007] EWHC 1670 (TCC) (11 July 2007)

Wed, 11 Jul 2007 00:00:00 GMT

SWI Ltd v P & I Data Services Ltd [2007] EWCA Civ 663 (04 July 2007)

Wed, 04 Jul 2007 00:00:00 GMT

The main contractor (C) engaged D under a fixed price sub-contract for building works. During the works, C requested that D omit some of the works originally tendered for. Upholding the decision at first instance, the Court of Appeal held that C was obliged to pay D the full contract sum because the subcontract had been a fixed price contract and there was no term allowing a reduction in price where D had performed less than the tendered works at the request of C.

DGT Steel and Cladding Ltd v Cubitt Building and Interiors Ltd [2007] EWHC 1584 (TCC) (04 July 2007)

Wed, 04 Jul 2007 00:00:00 GMT

C was a main contractor which had sub contracted external cladding works to D. D had sought to refer a dispute regarding payment to adjudication, which was rejected by the adjudicator who found in C’s favour. D commenced Court proceedings against C. C applied to stay those proceedings on the basis that there was a binding adjudication agreement in the sub contract and the proceedings issued related to a different dispute to that which had originally been referred to adjudication. The Court granted a stay on the following bases: (1) the court had an inherent jurisdiction to stay proceedings in breach of an agreement to adjudicate; (2) the burden to persuade the court not to exercise its discretion in favour of the agreement to adjudicate was on the party resisting the stay; (3) the agreement in question did provide for adjudication to be mandatory in the first instance (as indicated by the word ‘shall’); (4) the dispute in the court proceedings was not the same as the one which had been referred to adjudication and therefore the proceedings were a breach of the adjudication agreement. In the circumstances there was no good reason for the court not to exercise its inherent jurisdiction to stay the proceedings for adjudication.

Tyco Fire & Integrated Solutions (UK) Ltd v Rolls-Royce Motor Cars Ltd [2007] EWHC 3159 (TCC) (29 June 2007)

Fri, 29 Jun 2007 00:00:00 GMT

The contractor (C) was engaged to install a sprinkler system in D’s car assembly plant. Under the contract, D was required to maintain joint names insurance of the existing structures and works against specified perils, but failed to do so. Prior to completion of the works, water escaped from a supply pipe on the sprinkler system. The Court held that C was entitled to recover compensation in respect of the loss arising from the escape of water because the D was required under the contract to insure in the joint names of employer and contractor against that risk, even though D had failed to do so. It was held that provision for joint insurance in the contract had the effect of displacing C’s liability for negligence/breach of contract in relation to the damage.

Glasgow Airport Limited v. Messrs Kirkman & Bradford [2007] CSIH 47

Wed, 06 Jun 2007 00:00:00 GMT

Reclaiming Motion - Construction of Contract

AC Yule & Son Ltd v Speedwell Roofing & Cladding Ltd [2007] EWHC 1360 (TCC) (31 May 2007)

Thu, 31 May 2007 00:00:00 GMT

The Court considered an adjudication enforcement case where the ground for resisting enforcement was the fact that the decision was reached out of time, an issue which has been the subject of much recent case-law. The parties had granted the adjudicator a 14 day extension of time for issue of the decision (to 3 April). Shortly before the decision was due, C provided responses to queries raised by the adjudicator. D sought further time to respond. The adjudicator agreed to give D a further two days to respond, on condition that the parties agree a further extension of time of two days for his decision (to 5 April). C expressly consented to the adjudicator’s request; D did not respond to the request, but provided a substantive reply to the Claimant’s letter. The adjudicator issued his decision on 4 April. HHJ Peter Coulson QC held that D had by its silence consented to the further extension of time, or at the least was estopped from asserting that it had not. The Judge rejected C's alternative submissions that even if a decision is issued late, it may still be enforced. Reviewing the extensive recent case-law on this subject, the Judge stated that an adjudicator’s decision is valid and enforceable only if “completed” within the timescale provided at paragraph 19 of the Scheme.

Domsalla (t/a Domsalla Building Services) v Dyason [2007] EWHC 1174 (TCC) (4 May 2007)

Fri, 04 May 2007 00:00:00 GMT

C entered into building contract with D, a residential occupier, to reinstate fire-damaged property. However, the works were effectively carried out under the direction of D’s insurer, who provided contract administration and surveying services. C suspended the works due to D’s non-payment. D alleged the works were defective and incomplete, and complained of delay. C succeeded against D in adjudication for outstanding sums but D refused to pay the sums awarded. Resisting enforcement proceedings, D relied on the defence he raised in the adjudication, namely that the adjudication clause and withholding provisions of the contract were not binding on him under the Unfair Terms in Consumer Contracts Regulations 1999; and also on natural justice grounds. The Judge dismissed the application for summary judgment and granted D permission to defend. The Judge found that where the provisions of the Construction Act were incorporated into a contract with a residential occupier, the provisions were subject to the 1999 Regulations. In the circumstances of this case the withholding provisions were unfair and not binding on D because D had no part in selecting or including the terms and was not entitled to issue withholding notices. The Judge noted that D had no choice but to sign the contract due to his relationship with his insurer. By failing to consider D’s defence the adjudication was procedurally unfair and the adjudicator did not decide all matters referred to him. .

Melville Dundas Ltd & Ors v. George Wimpey UK Ltd & Ors (Scotland) [2007] UKHL 18 (25 April 2007)

Wed, 25 Apr 2007 00:00:00 GMT

This case was the first occasion on which the House of Lords considered the adjudication provisions of the Housing Grants, Construction and Regeneration Act 1996 (“the Act”). Their Lordships held that on the construction of the contract the employer was entitled to withhold any payment whatever and (adopting a purposive approach to s. 111 of the Act) that there was no conflict with s. 111(1) of the Act. Their Lordships commented that the purpose of the notice requirement in s. 111 of the Act was to enable the contractor to know immediately and with clarity why a payment was being withheld.

Melville Dundas Ltd & Ors v. George Wimpey UK Ltd & Ors (Scotland) [2007] UKHL 18 (25 April 2007)

Fri, 20 Apr 2007 00:00:00 GMT

A was the employer under a JCT Standard Form of Building Contract with Contractor's Design (1998 edition) and R was contractor. The contract provided for interim payments on a monthly basis based on an application for payment being made by R. On 2 May 2003 R applied for an interim payment; no withholding notice was served and the payment fell due on 16 May 2003. A failed to make payment and on 22 May 03 an administrative receiver was appointed in respect of R. On 30 May 2003, A determined the contract under clause 27.3.4 by virtue of the administration order. The issues on appeal was (i) whether the words "any further payment" in clause 27 extended to an interim payment that the employer was already liable to pay under the terms of the contract before determination of the employment; and (ii) whether Clause 27.6.5.1 invalidated the provisions of the Housing Grants, Construction and Regeneration Act 1996. The HL was unanimous on its opinion on issue 1 (that "any further payment" in clause 27 of the contract extended to any sums payable by the employer). On issue 2, the majority held (3:2) that there was no conflict between clause 27 and the statutory requirements as to the terms that the contract should contain. The parties to a construction contract were entitled to agree terms which gave effect to insolvency set off provisions as between parties and there was nothing intrinsically unfair about such terms. It would have been impossible for a withholding notice to have been served in the circumstances. Appeal allowed.

Bridge UK.Com Ltd (t/a Bridge Communications) v Abbey Pynford Plc [2007] EWHC 728 (TCC) (04 April 2007)

Wed, 04 Apr 2007 00:00:00 GMT

C, a printing company, contracted with D, an engineering company, to construct adequate foundations to bear the weight of a printing press before it intended to move into new premises. The terms of the contract required D to complete the works within a period of 10 days. D was delayed in the completion of the works and admitted that it was in default in failing to complete in that time. C claimed damages for delay; D disputed causation and quantum. C was successful in recovering (i)damages for outsourced work; (ii) the cost of transport for the outsourced work; (iii) manufacturing disruption; (iv) the cost of wages for the printers engaged for the purpose of operating the new press; and (v) loss of profits and wasted expenditurebecause D's failure to complete the work was held to have caused the printing press not to be installed and operating before C's moving in date.

Charles Church Developments Ltd v Stent Foundations Ltd & Anor [2007] EWHC 855 (TCC) (23 March 2007)

Fri, 23 Mar 2007 00:00:00 GMT

Shortly prior to a stay for mediation, D sought a costs order due to C’s failure to comply with the pre-action protocol. The claim was issued in February 2006 and served in June 2006, nearly two years after the last communication with the Defendant, and without any claim having been intimated to the Defendant. Mr Justice Ramsey found that there had been a serious breach of the pre-action protocol. The claim came within paragraph 6 of the pre-action protocol because there were potential limitation difficulties. Mr Justice Ramsey strongly emphasised that the Claimant should have applied to the Court under paragraph 6 on notice for directions as to the timetable in February 2006, when the claim was issued. The Judge held that the courts should generally deal with the cost consequences of a failure to comply with the pre-action protocol at an early stage (Daejan Investments v Park West Club Ltd [2004] BLR 223 applied). He awarded the Defendant 50% of its costs from service of the claim until start of the stay for mediation, and ordered that the Claimant should in any event bear 50% of its own costs from issue of the claim until start of the stay for mediation.

Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd (No. 2) [2007] EWHC 447 (TCC) (06 March 2007)

Tue, 06 Mar 2007 00:00:00 GMT

C engaged D under a JCT DOM/2 sub-contract to design and install the electronic systems at the new Wembley stadium. D’s works fell into delay; D sent notices of delay to C and requested an extension of time. C rejected the notices for non-compliance with a condition precedent of the sub-contract, but later issued revised programmes. A dispute arose over whether time had become at large because the sub-contract period had been replaced by an obligation to complete the works within a reasonable time. Mr Justice Jackson held that time was not at large. This decision confirms that the courts will tend to uphold extension of time clauses.

Pearson Education Ltd v Charter Partnership Ltd, CA, 21/02/07

Wed, 21 Feb 2007 00:00:00 GMT

R was the tenant of a warehouse which had been designed by A, a firm of architects, and had been constructed in 1989/1990. During a period of heavy rainfall in 2002 the warehouse had flooded and it was agreed that this was attributable to inadequate drainage capacity in the design, for which A was responsible. A appealed from the decision of HHJ Thornton QC in which it had been held that (1) a flood 8 years earlier (when other tenants were in occupation) did not give rise to an obligation on the part of R to investigate the adequacy of the rainwater system; and (2) the specification of the design occurred within the limitation period. A's appeal was dismissed by the Court of Appeal.

Aveat Heating Ltd v Jerram Falkus Construction Ltd [2007] EWHC 131 (TCC) (01 February 2007)

Thu, 01 Feb 2007 00:00:00 GMT

HHJ Havery QC held that an adjudicator had no jurisdiction to reach his decision out of time, following his recent decision in Epping Electrical Company Ltd v Briggs & Forrester (Plumbing Services) Limited [2007] EWHC 4 (TCC). HHJ Havery QC also struck down the Government (GC/Works) adjudication rules which applied to the contract in the present case for the same reasons he struck down the CIC Rules in Epping: namely, because those rules permitted an adjudicator to reach his decision out of time, contrary to ss. 108(2)© and (d) of the Construction Act, which he held were mandatory provisions.

HG Construction Ltd v Ashwell Homes (East Anglia) Ltd [2007] EWHC 144 (TCC) (01 February 2007)

Thu, 01 Feb 2007 00:00:00 GMT

D (the Employer) and C (the Contractor) had been a party to adjudication no. 1 in which C had argued that the contractual liquidated damages provisions were inoperable because the scope and value of the works in each sectional completion could not be ascertained. The adjudicator found against C. Following a second adjudication, which was compromised, C commenced adjudication no 3 in which it sought repayment of monies deducted as liquidated damages. D refused to take part in the adjudication (arguing that the issue had already been determined in adjudication no 1). The adjudicator held that there was no basis on which the liquidated damages provisions could be operated and awarded a refund. C applied for summary judgment to enforce an adjudicator's decision. Enforcement was refused on the basis that the underlying argument was the same or substantially the same as that raised in adjudication no. 1 and had already been decided.

Lead Technical Services Ltd v CMS Medical Ltd [2007] EWCA Civ 316 (30 January 2007)

Tue, 30 Jan 2007 00:00:00 GMT

The Court of Appeal held that a judge had erred in awarding summary judgment enforcing an adjudicator’s decision, as there was a real prospect of establishing that the adjudicator acted without jurisdiction. The adjudication concerned a dispute over fees. It was held that the judge had erred in failing to consider (1) an oral agreement between the parties in relation to a cap on C’s fees; and (2) a deed of appointment between the parties that contained an express term that the Technical and Construction Solicitors Rules would apply to any adjudication.

Epping Electrical Company Ltd v Briggs & Forrester (Plumbing Services) Ltd [2007] EWHC 4 (TCC) (19 January 2007)

Fri, 19 Jan 2007 00:00:00 GMT

C applied for summary judgment to enforce an adjudicator’s award. The parties had both agreed to the adjudicator’s request for an extension of time for reaching the decision of 7 days. The adjudicator reached his decision within the 7 day extension, but refused to send the decision to the parties until he had been paid. His decision was finally released 2 days after expiry of the extension of time. It was held that D’s consent to the extension of time had been conditional on the decision being issued within the 7 day extension. The decision was given out of time, and was therefore unenforceable, Ritchie Brothers (PWC) Ltd v David Philip (Commercials) Ltd (2005) BLR 384 followed. The Judge held that para 25 of the CIC procedure (which had applied to the adjudication) was inconsistent with s. 108(2) of the Construction Act.

Bennett (Electrical) Services Ltd v Inviron Ltd [2007] EWHC 49 (TCC) (19 January 2007)

Fri, 19 Jan 2007 00:00:00 GMT

Judge Wilcox refused to enforce an adjudicator’s award on grounds that the adjudicator had no jurisdiction because the letter of intent issued by D to C did not create a contract and therefore did not comply with s. 107 of the Construction Act 1996. The critical factor in the decision was that the letter of intent was headed “subject to contract”. In any event, it was found that the letter of intent could not have constituted a contract because the letter did not contain all the express terms of the agreement or the key obligations (per the majority Court of Appeal decision in RJT Consulting Engineers Ltd v DM Engineering Ltd [2002] BLR 217).

ALDI Stores Ltd v WSP Group Plc & Ors [2007] EWHC 55 (TCC) (15 January 2007)

Mon, 15 Jan 2007 00:00:00 GMT

A complex construction claim was struck out as an abuse of process because it related to alleged breaches of warranty that the defendants, professional firms, had already settled in respect of cross-claims brought against them by a defendant to earlier proceedings brought by the same claimant. A retailer had designed and constructed a large retail development on land leased by the claimant. The three defendants were engaged to provide professional services on that project. Subsequent settlement of the site had caused damage to the building, and the claimant successfully obtained a judgment on liability against the retailer in respect of that damage. During those proceedings, the retailer brought cross-claims against the three defendants which were consolidated with the claimant’s claim. Quantum of the main action was settled, but the retailer went into liquidation having paid only half of the sums agreed. The claimant sought to recover the remainder of its losses from the defendants in the present action. Mr Justice Jackson weighed up all the relevant factors, and found that the present claim as an abuse of process because it was an attempt to litigate the same alleged breaches of warranty for a second time. Johnson v Gore Wood & Co (2002) 2 AC 1 was applied.

Multiplex Constructions (UK) Ltd v Mott MacDonald Ltd [2007] EWHC 20 (TCC) (10 January 2007)

Wed, 10 Jan 2007 00:00:00 GMT

C applied for equitable remedies and summary judgment to enforce an adjudicator’s decision against D. D had been employed by C, the main contractor, as structural engineer on the construction of Wembley Stadium. The adjudication concerned C’s attempt to exercise its right to access “pertinent records” held by D under a novation agreement which governed C’s relationship with D. The adjudicator allowed C access to the requested documents, but D offered only a restricted range of documents. D challenged the adjudicator’s jurisdiction on the basis that the dispute between the parties was not the dispute determined by the adjudicator. It was held that the adjudicator was entitled to formulate his own interpretation of what constituted “pertinent records” as this was the pre-existing dispute between the parties referred to him. His decision was therefore within his jurisdiction, and judgment was given. However, C failed in its claim for equitable remedies (specific performance and injunction) because there was the subsidiary issue of whether D had complied with the adjudicator’s award by offering a restricted range of documents could not be resolved by written evidence at the summary judgment hearing.

Cubitt Building & Interiors Ltd v Fleetgrade Ltd, QBD (TCC) HHJ Coulson QC, 21/12/06

Thu, 21 Dec 2006 00:00:00 GMT

The Court enforced an adjudicator’s decision notwithstanding (a) the referral notice was served one day late and (b) the adjudicator communicated his decision 12 hours after expiry of the time available for reaching the decision. Judge Coulson emphasized the importance of compliance with adjudication timetables because “the essence of adjudication is speed”; but on a “sensible and commercial” construction of the relevant clause of the contract between the parties found that the referral notice was valid because it was served as soon as possible after appointment of the adjudicator (which appointment took place very late on the final day for service of the referral notice through no fault of the parties’). He also held that the adjudicator’s decision was not a nullity because it was reached on time, albeit the decision was not communicated on time, on the basis that the decision was communicated “forthwith”.

Aird & Anor v Prime Meridian Ltd [2006] EWCA Civ 1866 (21 December 2006)

Thu, 21 Dec 2006 00:00:00 GMT

This appeal concerned the status of a joint expert statement used in mediation. C issued proceedings in professional negligence against D, an architect. Proceedings were stayed for mediation. The Judge ordered the parties to instruct experts to prepare a joint statement for the mediation. The experts removed from the final version of the joint statement a proviso that the statement was without prejudice. The mediation failed, and D sought to use the joint statement in the subsequent proceedings. C contended the joint statement was prepared for the purpose of the mediation and was therefore privileged. The Judge at first instance agreed with C, holding that the primary function of the joint statement was for use at mediation and it would be unfair to conclude that the joint statement was intended for any other use. D appealed against this ruling. The Court of Appeal allowed the appeal, finding that the Judge’s order with regard to expert evidence should have been construed objectively, and C’s intentions were immaterial. The statement was made pursuant to CPR r.35.12 and was not privileged, nor did it acquire privileged status by virtue of its use in the mediation.

Quietfield Ltd v Vascroft Construction Ltd [2006] EWCA Civ 1737 (20 December 2006)

Wed, 20 Dec 2006 00:00:00 GMT

This appeal overturned the enforcement of an adjudicator’s decision. C had employed D to carry out renovations to a mansion. Completion of the works was delayed; D made two unsuccessful applications by letter to the architect for an extension of time. D referred the dispute to adjudication. The adjudicator found that D had failed to establish entitlement to an extension of time on the basis of those letters. C subsequently commenced a second adjudication for liquidated and ascertained damages in respect of D’s delay, relying on the adjudicator’s first decision. The adjudicator made an award in favour of C, refusing to consider D’s argument that it was entitled to an extension of time on the basis that he had determined this issue in his first decision. C issued a claim for summary judgment in the TCC to enforce this award, which D had refused to pay. The TCC dismissed C’s application on the basis that D had raised substantially different points about delay in the second adjudication, which the adjudicator should have considered. C appealed against the dismissal of its application. The Court of Appeal upheld the decision at first instance, holding that D had raised a number of causes of delay in the second adjudication which had not been raised in the first. The adjudicator was therefore wrong to refuse to consider those matters.

Plymouth & South West Co-Operative Society Ltd v Architecture, Structure & Management Ltd (No 2) [2006] EWHC 3252 (TCC) (18 December 2006)

Mon, 18 Dec 2006 00:00:00 GMT

A non-party costs order was made against the professional indemnity insurers of an insolvent firm of architects on the basis that the insurers had funded and directed the architect’s unsuccessful defence against a claim in professional negligence in their own interests. This decision is notable because it is rare for non-party costs orders to be made against insurers, and the House of Lords has previously ruled that such orders can only be made in exceptional circumstances. Central to the court’s decision in this case was the fact that the defendant had ceased trading, and its then sole director had died, prior to the issue of the claim. In those circumstances HHJ Thornton QC accepted that the defendant had no reputation and no substantial assets to protect, and that the insurers had taken over control and conduct of the defence in their own interests.

Melville Dundas Ltd v George Wimpey Ltd, Extra Division Inner House Court of Session, 15/12/05

Fri, 15 Dec 2006 00:00:00 GMT

C was engaged by D to design, construct and complete a residential development pursuant to a written contract which provided, inter alia, for (1) interim payments; and (2) determination of C's employment in the event that a receiver was appointed in relation to C. After commencement of work, C submitted an application for payment on 2 May 2003. D's agent certified approximately £400,000 as being due and payment fell due on 16 May 2003. D did not serve any withholding notice and also failed to make payment. On 22 May 2003 receivers were appointed in relation to C. C claimed the payment of approximately £400,000 from D. This claim was rejected at first instance on the basis that the contract provided that, in circumstances of a receiver being appointed, D was only required to make payment after a full accounting procedure had been followed and that this was not affected by the Housing Grants Construction and Regeneration Act 1996. This was overturned on appeal; it was held that the contractual provision did not entitled the due date for an interim payment to be altered retrospectively.

Metropole (Folkstone) Ltd v Revenue & Customs [2006] UKVAT V19917 (04 December 2006)

Mon, 04 Dec 2006 00:00:00 GMT

C appealed against D's decision that supply of works to replace the balcony of a listed building were standard rated for VAT purposes. The balcony had been demolished as an emergency measure because it was unsafe and was replaced with a replica. Held that the works properly construed amounted to repair or maintenance because the changes were not fundamental or radical and the works therefore fell outside the scope of schedule 8, Group 6 to the Value Added Tax Act 1994.

Sweeney v Boylan Nominees Pty Ltd, [2006] BLR 440 (Date Uncertain)

Fri, 01 Dec 2006 00:00:00 GMT

The High Court of Australia affirmed the general rule that an employer is not vicariously liable for the torts committed by an independent contractor it has employed. The independent contractor was a mechanic engaged by D, a service company responsible for the maintenance of a fridge in a convenience store. The door of the fridge had come loose, causing injury to C.

The Assessor for Grampian Valuation Joint Board v. Ian Fraser [2006] CSIH 55

Wed, 29 Nov 2006 00:00:00 GMT

Appeal under section 82(4) of the Local Government

Reinwood Ltd v L. Brown & Sons Ltd, QBD (TCC) HHJ Gilliland, 9/11/06

Thu, 09 Nov 2006 00:00:00 GMT

In this decision, guidelines were set out for the circumstances in which a notice of determination given by a contractor under ss. 28.2.4 and 28.2.5 of the JCT 1998 Private with Quantities standard form will be found to be ‘unreasonable or vexatious’.

Hart Investments Ltd v Fidler & Anor [2006] EWHC 2857 (TCC) (03 November 2006)

Fri, 03 Nov 2006 00:00:00 GMT

In an action arising out of building works to a property and a subsequent adjudication, C argued that the adjudicator had no jurisdiction to deal with the dispute because inter alia the referral notice was served out of time, being provided 8 days (rather than 7 days) after the notice of intention to refer. HHJ Coulson QC followed the recent decisions of the Scottish courts relating to adjudicators’ decisions served out of time (e.g. Ritchie Brothers plc v David Phillip Commercials Ltd [2005] BLR 284) in finding that the referral notice was invalid and – in the absence of any waiver of that irregularity by the responding party – the adjudicator therefore had no jurisdiction. HHJ Coulson QC expressly disagreed with previous dicta of the English courts on adjudication time limits in Barnes & Elliott Ltd v Taylor Woodrow Holdings [2004] BLR 111 and Simons Construction Ltd v Aardvark Developments Ltd [2004] BLR 117.

P4 Ltd v Unite Integrated Solutions Plc [2006] EWHC 2640 (TCC) (27 October 2006)

Fri, 27 Oct 2006 00:00:00 GMT

It was held that C had failed to prove that the retention of title clause in its standard trading terms had been incorporated into its mechanical and electrical sub-contract with D (which proceeded on the basis of a DOM/2 standard form, although no contract was ever signed). The clause was in C’s standard terms of business, which were on the back of its order form. The front page of the order form was faxed to D prior to conclusion of the contract, but the back page, containing the terms of business, was not. Consequently, C’s claims, advanced on the basis of the retention of title clause, failed.

Bell Scaffolding (Aust) Pty Ltd v Rekon Ltd & Anor [2006] EWHC 2656 (TCC) (25 October 2006)

Wed, 25 Oct 2006 00:00:00 GMT

X was a company which had a subsidiary called Y. D1 and D2 were providers of scaffolding. Y and D2 were parties to an existing contract for the hire of scaffolding. D1 and D2 entered into an oral contract with X to the effect that D1 and D2 would buy all future scaffolding products from X provided that (i) D2 increased the amount of scaffolding which it hired to Y under the existing contract; (ii) D1 would be allowed to produce scaffolding whilst its existing stock lasted; and (iii) D1 could continue to manufacture 'special' orders. D1 and D2 did not proceed with the agreed purchases of scaffolding and Y off hired the scaffolding before the hire period set out in the existing contract had expired. X and Y subsequently ceased trading and C acquired the rights of X and brought an action against D1 and D2. The Judge held on a number of separate issues that the oral agreement gave rise to an enforceable obligation that D1 and D2 purchased scaffolding from X, which was not subject to limiting conditions precedent and that 'agreed prices' had a different meaning from 'prices to be agreed' such that it did not suggest this was an agreement to agree.

Fiona Trust & Holding Corporation & ors v Yuri Privalov & ors QBD(Comm) Morison J, 20/10/06

Fri, 20 Oct 2006 00:00:00 GMT

C applied for an injunction to restrain two proposed defendants from continuing arbitration proceedings. C alleged that D3 had paid bribes to D1 and D2 and that the chartering of vessels to D3 formed part of a dishonest conspiracy to injure C’s business by unlawful means. It was held that the court, and not the arbitrator, had jurisdiction to determine the issues because the bribery arguments would impeach the whole contract and therefore the dispute did not arise out of the contract. C had established a fully arguable case that it had a right to rescind the charters and their arbitration clauses.

CGU International Insurance Plc & Ors v Astrazeneca Insurance Co Ltd. [2006] EWCA Civ 1340 (16 October 2006)

Mon, 16 Oct 2006 00:00:00 GMT

Applicant applied for permission to appeal against the judge’s refusal of permission to appeal under s.69(8) of the Arbitration Act 1996. The Court of Appeal held that, although it was settled law that the refusal by the judge of permission to appeal under s.69(8) could not be appealed to the Court of Appeal, the Court of Appeal nevertheless had a residual discretion in a case of unfairness in the decision-making process. However, there was no unfairness and no breach of Article 6 of the European Convention of Human Rights in this case, so the application was refused.

Abadi (t/a Atlas Builders & Atlas Construction Ltd) v Al-Anizi [2006] EWCA Civ 1522 (13 October 2006)

Fri, 13 Oct 2006 00:00:00 GMT

D, the appellant, was a medical doctor and businessman who used a number of corporate vehicles for his personal and business activities. C had carried out building and architectural work on behalf of D and sought payment from D. D argued at first instance that one of his corporate vehicles (X) was the proper party to the contract and that he had no personal liability. During the trial D changed his account and alleged that it was actually a different corporate vehicle (Y) which was the party to the contract. The Judge found D to be an uncredible witness and found that he was a party to the contract and therefore had a personal liability. D appealed. The CA found that the Judge had been entitled to make the findings which he had.

Gray & Sons Builders (Bedford) Ltd. v Essential Box Company Ltd. [2006] EWHC 2520 (TCC) (11 October 2006)

Wed, 11 Oct 2006 00:00:00 GMT

D refused to pay sums awarded to C by an adjudicator. C issued an application for summary judgment to enforce the adjudicator’s award. D entered an acknowledgment of service, and raised a number of technical points in correspondence with C. D made an offer and C made a counter offer, but neither were accepted. However, the day before the hearing of the summary judgment application, D filed a skeleton argument indicating that it would not oppose C’s application. HHJ Coulson QC entered judgment for C and ordered D to pay C’s costs on the indemnity basis. He found that D knew or ought to have known that it had no defence to the claim, and that it was unreasonable for D to give the impression throughout that the application was resisted, thereby causing C to incur costs and obliging the Court to make arrangements for the hearing. Where an enforcement application was resisted until just prior to the hearing and then not contested, or contested on arguments bound to fail, then prima facie an order for indemnity costs will be appropriate.

McConnell Dowell Constructors (Aust) PTY Ltd v National Grid Gas PLC [2006] EWHC 2551 (TCC) (3 October 2006)

Tue, 03 Oct 2006 00:00:00 GMT

Application for enforcement of adjudicator's decision. C had been retained by D to construct a gas pipeline pursuant to a written contract which provided for referral of disputes to adjudication. The works were delayed and the party resolved that dispute by entering into a supplemental agreement which detailed sums to be paid by D to C. After completion of the works C maintained that it was entitled to further payment above the amounts in the supplemental agreement and it referred the dispute to adjudication. The adjudicator held that he had jurisdiction to consider the dispute and held that C was entitled to further payment. D contended that the adjudicator did not have jurisdiction because the supplemental agreement did not contain an adjudication clause and was not a construction contract under the terms of the 1996 Act. Enforcing the decision, the judge held that the supplemental agreement was a variation to the main contract and it was within the Adjudicator, not the Court's, jurisdiction to determine whether the disputes had been settled fully by the supplemental agreement.

Ove Arup & Partners International Ltd & anr v Mirant Asia-Pacific Construction (Hong Kong) Ltd & anr [2006] 1 BLR 187 CA (Civ Div) (Date Uncertain)

Sun, 01 Oct 2006 00:00:00 GMT

C’s claim for damages for breach of contracts relating to the construction of a power station and the failure of foundations was rejected by HHJ Toulmin in the TCC. On appeal to the Court of Appeal, it was held that the burden on an appellant in an appeal against a finding of fact in a complicated technical case by a specialist TCC judge was hard to discharge: the more technical and complicated the facts, the harder the burden. The appeal was dismissed.

(1) Perrin (2) Ramage v (1) Northampton Borough Council (2) Shephard (3) Shephard QBD (TCC) Judge Coulson QC, 26/09/06

Tue, 26 Sep 2006 00:00:00 GMT

D2 and D3 were owners of land which incorporated a tree, the roots of which were causing damage to C1 and C2's adjacent property. The tree was subject to a Tree Preservation Order and D1 had refused permission to fell the tree. C1 and C2 sought a declaration of their entitlement to fell the tree on the basis that it was necessary for the prevention or abatement of a nuisance within section 198(6)(b) of the Town and Country Planning Act 1990. D1, D2 and D3 maintained that felling could not be said to be necessary within the terms of the Act in circumstances where other engineering works could be employed to cure the problem. The Judge held, on the trial of a preliminary issue, that the reference to nuisance in the Act was to be read as 'actionable nuisance' and that the Act did not require consideration of the availability of alternative works when considering whether the felling was necessary.

Melville Dundas Ltd v. Hotel Corporation of Edinburgh Limited [2006] CSOH 136

Thu, 07 Sep 2006 00:00:00 GMT

Proof Before Answer - Building Contract

Melville Dundas Ltd v. Hotel Corporation of Edinburgh Limited [2006] CSOH 136

Thu, 07 Sep 2006 00:00:00 GMT

Proof Before Answer - Building Contract

W.F. Price Roofing Limited v. Balfour Beattie Construction Limited

Fri, 04 Aug 2006 00:00:00 GMT

Appeal to Sheriff Principal

Redworth Construction Ltd v Brookdale Healthcare Ltd [2006] EWHC 1994 (TCC) (31 July 2006)

Mon, 31 Jul 2006 00:00:00 GMT

C sought to enforce an adjudicator’s award against D. C and D had contracted on the basis of contract drawings and documents that made specific reference to various JCT clauses but the completion date and date of possession were left blank. The TCC refused to enforce the adjudicator’s decision on the basis that the contract was not a contract in writing within the meaning of section 107 of the Construction Act 1996. Whilst there had been an intention at the outset to enter into a contract on JCT terms, that intention had never been implemented; the JCT form of contract had never been signed or orally agreed; and both parties considered the contract to be informal and the dates of completion to be merely target dates.

Technotrade Ltd v Larkstore Ltd [2006] EWCA Civ 1079 (27 July 2006)

Thu, 27 Jul 2006 00:00:00 GMT

The Court of Appeal held that a surveyor’s report on the physical condition of sloping development land prepared for the original landowner could be relied upon by a subsequent purchaser of the land (to whom the original landowner’s rights under the report had been assigned) in a claim against that surveyor for breach of contract in respect of damage caused by a landslip that had occurred between the sale of the land and the assignment. What had been assigned was a cause of action and the legal remedies for it; it was not an assignment of loss. The remedy assigned was not limited to remedy for loss suffered at the date of the accrual of the cause of action.

Medlock Products Ltd v SCC Constructions Ltd, Bristol DR, Judge Weeks QC, 13/07/2006

Thu, 13 Jul 2006 00:00:00 GMT

C was the main contractor and D was the sub contractor in relation to a construction project. D had rendered a number of invoices which had not been paid by C and had therefore presemted a petition to wind up C. C applied to restrain the advertisement and/or strike out the petition. C maintained that it was entitled to withhold money owing to poor workmanship. C subsequently maintained that D was seeking to wind up the wrong company on the basis that the company which had entered into the contract with D was a wholly owned subsidiary of C and that C was only a holding company. C continued to allege that the debts were bona fide disputed and/or there were cross claims which exceeded thw amount of the petition debt. The Judge (1) rejected the submission that C was not the contracting party because no point had been taken when the invoices were first sent; and (2) that C's challenges to the debt had no genuine prospect of success which was supported by the fact that no withholding notice had been served as required under the Housing Grants Construction and Regeneration Act 1996. C's application was dismissed.

Maggs (t/a BM Builders) v Marsh & Anor [2006] EWCA Civ 1058 (07 July 2006)

Fri, 07 Jul 2006 00:00:00 GMT

C, a builder, had been contracted by D to carry out refurbishment works to D's house. The facts relating to the contract were such that C had submitted an estimate for the cost of the works with a list attached briefly describing the works. The parties had thereafter agreed orally that the works should proceed and during the course of the works D also gave instructions for additional items of work to be undertaken. C rendered interim invoices with lists attached detailing the work which had been carried out. A final invoice was rendered following completion of the works which D refused to pay on the basis that the extra items invoiced had formed part of the original agreement and had already been paid. The appeal related to whether the Judge at first instance had been correct to refuse to consider the lists of work done which were attached to the interim invoices as an aid in construing the extent to the work which had been included in the contract at the outset (the contract being part oral and part written). D contended that the judge erred in excluding evidence of the parties' subsequent conduct. The CA held that it was wrong for the judge to exclude the evidence because where an agreement was partly oral and partly written, subsequent conduct might be examined to help determine the parties' original intentions.

Hillview Industrial Developments (UK) Ltd v Botes Building Ltd QBD(TCC) HHJ Toulmin QC 07/06

Fri, 07 Jul 2006 00:00:00 GMT

C applied for summary judgment to enforce an adjudicator’s award of £300k for liquidated and ascertained damages against D. D admitted it had no defence to the claim, but applied for an adjournment of the summary judgment hearing on the basis that it had brought separate proceedings against C to recover £200k due under the final account, in respect of which a summary judgment application was pending. HHJ Toulmin refused the application for a stay and enforced the adjudicator’s award on the basis that adjudication under the Construction Act 1996 was intended to resolve construction disputes on a provisional basis by way of prompt payment.

Taylor Woodrow Holdings Ltd & anr v Barnes & Elliott Ltd QBD(TCC) Jackson J, 3/07/06

Mon, 03 Jul 2006 00:00:00 GMT

C applied to the court under section 45 of the Arbitration Act 1996 for the determination of a question of law arising in arbitration proceedings. The question of law was whether C, a construction company, had retained the risk of unforeseen structural works in a contract for the conversion of a derelict hospital. Jackson J held that the Court had a discretion whether to determine any question of law referred under section 45, and was not bound to determine that question. The Court exercised its discretion to determine the question of law on the basis that the facts were not in dispute and such determination would be cost-effective. The Court decided that C did not retain the risk of unforeseen structural works.

TFW Printers Ltd v Interserve Project Services Ltd [2006] EWCA Civ 875 (27 June 2006)

Tue, 27 Jun 2006 00:00:00 GMT

Pursuant to the terms of a JCT Agreement for Minor Building Works C appointed D to carry out various building works to a building owned by C. After practical completion but during the defects liability period, the building suffered flood damage because a downpipe had been removed, but not replaced, by D during the works. C claimed damages for breach of contract and/or negligence. The first instance Judge held that C was not entitled to recover because it was obliged, by Clause 6.3B to insure against certain perils and held that this obligation subsisted for the duration of the defects liability period. On appeal C argued that this obligation ceased at practical completion. The CA held that the C's obligation to insure did cease at practical completion. The CA also held that no assistance was to be derived from JCT Practice Note 22 in interpreting the contract.

Associated British Ports v Hydro Soil Services NV & Ors [2006] EWHC 1187 (TCC) (23 June 2006)

Fri, 23 Jun 2006 00:00:00 GMT

C was a port operator which had entered into a contract with D for strengthening works to a steel sheet pile quay wall prior to dredging. The contract was a lump sum contract based on the ICE conditions of contract. D had sub contracted the design work to H. During the course of the works the sheet piles were damaged and it was common ground that remedial works would be needed to enable the berth to be dredged. C alleged breach of contract on the basis that the works were not fit for purpose and claimed the D was responsible for the remedial works. D defended the claim on the basis that the remedial works were necessitated by an unforeseeable physical condition and that C was liable for the extra cost by virtue of clause 12 of the contract. D also issued a Part 20 claim against H stating that any unfitness for purpose of the works was caused by or contributed to by breach of the design contract. It was held, on the basis of expert evidence, that there was nothing unforeseeable to an experienced contractor about the state of the pile wall and the works were unfit for purpose. On the Part 20 claim it was held that there were faults in the design carried out by H but also that D had executed parts of the work poorly. There was also a side issue in which C alleged that D was in breach of contract in not obtaining a parent company guarantee of its obligations under the contract beyond the end of December 2002. The court held that this was a breach of contract but declined to order specific performance of an obligation to procure a third party to enter into a guarantee.

City Inn Limited v Shepherd Construction Limited [2006] CSOH 94

Tue, 20 Jun 2006 00:00:00 GMT

The pursuers and the defenders were the employer and the contractor, respectively, under a building contract for the construction of a hotel at Finnieston Quay, Glasgow. The pursuers contended that the defenders were not entitled to any extension of time beyond the original contractual completion date of 20 August 1999. The first conclusion of the summons was for declarator that the Completion Date was 20 August 1999. The second and third conclusions were for payment of the total sum of liquidated and ascertained damages that would have been due by the defenders if no extension of time had been granted and the Completion Date was 20 August 1999. Any entitlement that the pursuers have to those sums depends on whether they are correct in stating that no extension of time should have been granted. The defenders lodged a counterclaim that related to the system of piling used in the foundations of the hotel the basis of which the defenders averred was accepted by the pursuers and that the contract was concluded on that basis.

Shinedean Ltd v Alldown Demolition (London) Ltd & Anor [2006] EWCA Civ 939 (20 June 2006)

Tue, 20 Jun 2006 00:00:00 GMT

C obtained judgment in default against D for damages arising from a failure to undertake demolition and excavation works properly. D went into voluntary liquidation and its insurer under a public liability and Contractor’s All Risk insurance policy was joined to the proceedings and a claim under the Third Party’s Rights Against Insurers Act 1930 was added. The insurer defended the claim against it on the basis that D was in breach of the obligation to provide information and assistance, and hence the insurer was entitled to decline indemnity. HHJ Havery QC dismissed the insurer’s defence because it had failed to show that it had suffered prejudice as a result of the breach. The Court of Appeal allowed the insurer’s appeal, finding that under the terms of the policy it was not necessary to establish prejudice and that the failure was a breach of a condition precedent entitling the insurer to decline indemnity.

Midland Expressway Ltd v Carillion Construction Ltd & Ors [2006] EWCA Civ 936 (15 June 2006)

Thu, 15 Jun 2006 00:00:00 GMT

The employer, C, contracted D to build the M6 toll road. The contract contained a provision that various sums due were provisional sums. D contended that it was entitled to be paid the provisional sums without adjustment under the terms of the contract, and those sums added to the final contract price. Upholding the decision at first instance, the Court of Appeal held that the provisional sums should be omitted from the final contract price and the true amount added instead, because a provisional sum was a “best guess provision” until the actual value of the work was assessed.

(1) Midland Expressway Ltd & (2) Secretary of State for Transport v CAMBBA, QBD (TCC) Jackson J, 13/06/2006

Tue, 13 Jun 2006 00:00:00 GMT

C1 sought to challenge an adjudicator's decision regarding the absence of a dispute. D was a contractor which had been engaged by C1 to design and build the M6 toll motorway. Following amendments to the plans for the motorway D had presented a claim for the direct costs arising out of the change. D later submitted a second claim for indirect costs arising out of delay events (including the changed plans) and the costs of mitigation measures. D served notice of intention to refer their disputed claims for direct costs for the changed plans to adjudication. C1 sought to include D's entitlement to recover for the indirect costs within the scope of the adjudication and as a consequence D withdrew its claims for indirect costs. The adjudication ruled that there was no dispute as to D's entitlement to indirect costs and ruled on the direct cost claim only. C1 challenged this decision and maintained trhat the indirect costs claim should have been included and dismissed as having no prospect of success. The Judge held that the adjudicator had been right to find that there was no dispute capable of being adjudicated because there was no quantified claim for indirect costs during the adjudication.

Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd [2006] EWHC 1341 (TCC) (05 June 2006)

Mon, 05 Jun 2006 00:00:00 GMT

Jackson J determined a number of preliminary issues relating to various contracts that the defendant subcontractor had entered into with the claimant main contractor to design, fabricate and erect the steelwork at Wembley Stadium. C alleged that D had negligently constructed defective members for a steel arch at the stadium. It was held inter alia that there was no implied term in the subcontract that D should execute the works with such diligence and expedition as was reasonably required to meet the dates of the main contract programme. It was also held that D was in repudiatory breach of the subcontract by stopping work because C was entitled to refuse to make further payments, having referred the payment disputes to adjudication and abided by the adjudicator’s decision. The defence of abatement was not available in relation to the claim for defective design work, and C’s only remedy was a claim for damages for professional negligence.

M Rohde Construction v Markham-David [2006] EWHC 814 (TCC) (20 March 2006)

Sat, 20 May 2006 00:00:00 GMT

Considering an application for summary judgment to enforce an adjudicator’s decision, Jackson J held that a slight delay in the issuing of the adjudicator’s decision was not fatal to that decision. He followed the cases of the TCC in Simon Construction Ltd v Aardvark Developments Ltd [2004] BLR 117 and Barnes & Elliot Ltd v Taylor Woodrow Holdings [2004] BLR 111 rather than the Scottish authorities (Ritchie Brothers (PWC) Ltd v David Phillip (Commercials) Ltd [2005] CSIH 32 and Aardmore Construction Ltd v Taylor Woodrow Construction Ltd [2006] CSOH 3), which have reached the opposite view.

Arnold (HMIT) v G-Con Ltd, CA (Civ Div), 19/05/06

Fri, 19 May 2006 00:00:00 GMT

A taxpayer, D, appealed against a ruling upholding the decision of the Inspector of Taxes, C, not to renew D’s construction industry certificate on account of significant delays in the payment of PAYE and national insurance contributions. D argued that its late payments should be regarded as “minor and technical” for the purposes of the Income and Corporation Taxes Act 1988 s.565(4) and, therefore, should not amount to a reason for refusal of the certificate. It was held that the construction industry certificate was a prize that all sub-contractors were anxious to obtain but Parliament required strict compliance with all of a company’s tax obligations for the certificate to be granted; all breaches had to be taken into account when deciding whether a failure to comply could be deemed “minor and technical”. The fact that G paid its corporation tax on time said nothing about its ability or failure to pay PAYE or national contributions on time.

CGA Brown Ltd v Carr & anor, CA (Civ Div) 16/05/06

Tue, 16 May 2006 00:00:00 GMT

A builder was found to be in breach of its duty to construct an extension to the flat roof of a residential home with reasonable care and skill because, whilst the builder had followed the drawings prepared by the homeowner’s architect, the builder had failed to spot a problem in the architect’s drawings. The builder should have advised the homeowner that the design for the roof extension was defective. The Court of Appeal found that an appreciation of what the plans provided and did not provide was part of the actual work of construction and following those plans.

Mantegazza & Anor v Neil Holland Architects Ltd & Anor [2006] EWHC 2133 (TCC) (11 May 2006)

Thu, 11 May 2006 00:00:00 GMT

C engaged D as architect in connection with the construction of an extension to C's property; D's obligations included administering of the building contract. C raised complaints regarding D's alleged failure to administer the building contract which related to the quality of the brickwork, mortar and pointing; these claims were settled for a sum which was said to relate to "all claims made". Subsequently C made further claims on the basis that the mortar used had been discovered to be unsuitable. D sought to strike out these claims on the basis that they were covered by the compromise agreement. The Judge ruled that the new claims were not within the compromise agreement because this related only to "all claims made" and did not cover all claims present and future. The Judge held that the agreement could not be construed to mean all claims that might have been discovered with reasonable diligence and held that the substance of the new claims was different to those which had been compromised.

Co-Operative Group (CWS) Ltd v Stansell Ltd & Anor [2006] EWCA Civ 538 (09 May 2006)

Tue, 09 May 2006 00:00:00 GMT

D had been employed on a JCT standard form contract to construct a warehouse for an industrial and provident society, X. Clause 18 of the building contract provided that neither party could assign without the other’s written consent. X had ceased to exist after resolving to transfer the whole of its property and all of its engagements to C pursuant to s.51(1) of the Industrial and Provident Societies Act 1965. C had resolved to fulfil all X’s engagements, but did not inform D of that fact. It was held that s. 51(1) vested the benefit of the building contract in C notwithstanding the prohibition against assignment without consent in clause 18 of the JCT contract. S.51 was wide enough to achieve that result and its evident purpose was to enable one society to transfer its engagements and its property to another society simply by passing a special resolution to that effect.

Decoma UK Ltd (Formerly Conix UK Ltd) v Hayden Drysis International Ltd, CA (Civ Div), 04/04/06

Tue, 04 Apr 2006 00:00:00 GMT

The parties entered into a bespoke contract whereby D was to design, build and install a waterborne paint spraying system at C’s premises. C alleged that the equipment was never completed and was defective, but nevertheless took over the system and began using it. C brought proceedings for breach of contract, and preliminary issues arose as to whether the defendant could rely on terms in the contract to exclude or limit any liability. It was held that the first instance judge was wrong to find that C had a claim for damages and not a claim under the provisions of the contract. However, the contractual provisions had to be met before a claim under the contract could be made. The plain meaning of the contract was that D was liable for the demonstrable costs and charges if C corrected the faults and submitted invoices to D. Therefore, C cold only make a claim under the contract if remedial work had been carried out.

ERDC Group Ltd. v Brunel University [2006] EWHC 687 (TCC) (29 March 2006)

Wed, 29 Mar 2006 00:00:00 GMT

C claimed payment for the construction of a new sports facility at D’s premises. D counterclaimed for unfinished and defective work. C had tendered for the works on a JCT standard form of contract. However, D decided to appoint C to undertake the works under letters of intent, as the execution of certain documents was to be deferred until after the grant of planning permission. After completetion of the main elements of the work, D refused to sign the contractual documents, insisting that it would only continue if the work done be valued on a quantum meruit basis. D then left the site wihtout completing the works. Finding for D, the TCC held that the letters of intent demonstarted a clear intention to enter into legal relations. The work carried out prior to the expiry of the last letter of intent should be assessed in accordance with JCT valuation rules, and not on a quantum meruit basis. The work carried out after the expiry of the letters of intent had not materially differed from those originally contemplated and, therefore, it would not be appropriate to switch from an assessment based on C’s rates to one based enitely on C’s costs. Although D did not have a counterclaim in the classic sense, as there was no contract, an adjustment was appropriate in respect of some of the works to reflect the sums paid by B to bring those works up to standard.

William Verry Ltd v North West London Communal Mikvah, HC (QBD) (TCC), 14/03/06

Tue, 14 Mar 2006 00:00:00 GMT

C, a building contractor, was engaged to construct a mikvah by D. Following completion of construction, C commenced adjudication proceedings in respect of the final account. An award for a substantial sum of money was made by the adjudicator, which D failed to pay. C issued proceedings to enforce the adjudicator’s award by way of summary judgment under CPR 24. Prior to the hearing, it became apparent that D was an unincorporated association and thus had no legal personae. C issued an application to join the trustees of D as defendants. The TCC allowed the application to join the trustees as defendants, but dismissed the application for summary judgment on the basis that the issue of who precisely was a party to the construction contract and who was responsible for paying the adjudicator’s award should be determined at a full trial. Costs were reserved.

Weissfisch v Julius, [2006] EWCA Civ 218 (08 March 2006)

Wed, 08 Mar 2006 00:00:00 GMT

The parties had entered into a contract which expressly provided that any dispute should be resolved by an arbitrator under arbitration that would be governed by Swiss law and have its seat in Switzerland. A dispute arose, and the appointed arbitrator proposed to hold a hearing into his own jurisdiction. The appellant alleged that the provision relating to arbitration had been procured by fraud, and applied for an interim injunction to restrain the arbitrator from holding a hearing into his own jurisdiction or from continuing to act as arbitrator. The Court of Appeal dismissed the appeal against the decision of the judge at first instance refusing the application, holding that there was nothing untoward in the arbitrator considering his own jurisdiction once it was put in issue, and that his decision would not be final as the courts in Switzerland exercised an appropriate supervisory jurisdiction over arbitration. The consequence of the express arbitration agreement, in accordance with the law of international arbitration (recognized by the Arbitration Act 1996), was that any issues as to the validity of provisions of that agreement fell to be resolved in Switzerland under Swiss law.

Musselborough and Fisherow Co-Operative Society Limited v Mowlem Scotland Limited [2006] CSOH 39

Tue, 07 Mar 2006 00:00:00 GMT

Civil Proof - Breach of Building Contract:

Kier Regional Ltd (t/a Wallis) v City & General (Holborn) Ltd [2006] EWHC 848 (TCC) (06 March 2006)

Mon, 06 Mar 2006 00:00:00 GMT

D resisted enforcement of an adjudicator’s award on the basis of breach of natural justice, in that the adjudicator had wrongly ignored two expert reports. The adjudicator had found that the two reports contained new evidence not available to the parties at the time the dispute had crystallized. Jackson J granted C summary judgment, finding that, although there was considerable force in the contention that the adjudicator should have taken the experts’ reports into account, at worst the adjudicator had made an error of law which would not invalidate his decision. He noted per curiam that it was unclear whether Buxton Building Contractors Ltd v Governers of Durand Primary School [2004] 1 BLR 374 was correctly decided, and that in light of Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA 1358 certain passages in the judgment must be regarded as incorrect.

Haward & Ors v. Fawcetts (a firm) & Ors [2006] UKHL 9 (1 March 2006)

Wed, 01 Mar 2006 00:00:00 GMT

This was a case concerned with solicitors’ negligence, but the findings on what constitutes “knowledge” for the purposes of section 14A of the Limitation Act 1980 are likely to have wide application in the law of negligence of construction professionals. Their Lordships held that “knowledge” meant knowing with sufficient confidence to justify embarking on the preliminaries to the issue of a claim; and that knowledge that damage was “attributable” in whole or in part to the defendant’s acts or omissions within section 14A(8)(a) of the Limitation Act 1980 meant: (1) knowledge in broad terms of the facts on which the complaint was based; and (2) knowledge that there was a real possibility that the defendant’s acts or omissions had been a cause of the damage. The burden of proof was on the claimant.

Kanoria & Ors v Guinness [2006] EWCA Civ 222 (21 February 2006)

Tue, 21 Feb 2006 00:00:00 GMT

This case concerned an agreement for the provision of software personnel in the UK which were subject to Indian law and an arbitration clause. Arbitration proceedings were commenced by the appellant in India, but the respondent notified the arbitrator that he was ill and unable to answer the claim, although he made some written submissions. An arbitration award was made in the respondent’s absence at a hearing where additional allegations (of male fides) were made against the respondent. The appellant sought to enforce the award in the UK under the Arbitration Act 1996. Permission to enforce was granted, but was subsequently set aside on the basis of the respondent’s incapacity. The Court of Appeal dismissed the appeal against the decision to set aside, finding that it was clear from Section 103(2) of the Arbitration Act 1996 that a party to an arbitration was unable to present his case if he was never informed of the case that he was required to meet.

John Roberts Architects v Parkcare Homes (No 2) Ltd, CA, 09/02/06

Thu, 09 Feb 2006 00:00:00 GMT

C and D were parties to a construction contract which incorporated the CIC Model Adjudication Procedure, 3rd edition. They had also concluded a contract based on the RIBA Conditions of Engagement for the Appointment of an Architect, clause 9.2 of which deleted clause 29 of the Model Adjudication Procedure and provided instead for the adjudicator to have power to direct the payment of legal costs and expenses as part of the Adjudicator's decision. D had referred a dispute to adjudication but abandoned it after substantial steps had been taken by C responding to the referral. C applied for, and the Adjudicator awarded, its costs up to the date of the discontinuance. The Judge at first instance held that there was no jurisdiction entitling him to do so because there was no substantive decision reached. The CA held, on a proper interpretation of the adjudication agreement, that clause 29 did not limit the Adjudicator's power to award legal costs solely to circumstances where he had reached a substantive decision.

Dalkia Utilities Services Plc v Celtech International Ltd, HC(QBD-Comm), 27/01/06

Fri, 27 Jan 2006 00:00:00 GMT

C designed, constructed and operated energy plants and had agreed to provide energy services at D's new paper mill for a period of 15 years. Pursuant to the agreement C was to charge D an annual charge (comprising of a finance element aswell as the operational costs) which was payable in 12 monthly instalments. Clause 14.4 of the contract enabled C to terminate the contract if D was in material breach of its obligation to pay charges. D failed to pay 3 separate monthly instalments because it did not have the money to be able to do so. The Court held that this constituted a material breach. Furthermore, the contract also provided that D could pay a termination sum and in exchange would be able to retain the paper mill. The Court also considered whether amendments to the contract had the effect (as suggested by D) of only requiring payment of interest and rejected the contention as commercially nonsensical and C was entitled to recover a termination sum.

Michael John Construction Ltd v Golledge & Ors [2006] EWHC 71 (TCC) (27 January 2006)

Fri, 27 Jan 2006 00:00:00 GMT

C sought to enforce two decisions by an adjudicator against 4 defendants who had, at various times, been trustee of an unincorporated association (“the Club”). The Club had purported to employ C to construct a sports complex. HHJ Coulson rejected Ds’ argument that the adjudicator had had no jurisdiction to reach either decision on the grounds that the proper defendants were each and every member of the Club. HHJ Coulson enforced the decisions against the 4 defendants on the basis that a trustee who has entered into a contract will generally be personally liable under that contract. His personal liability will be unlimited, subject to any contractual limitations on his liability (of which there were none in this case). It was also held that the second decision was not invalid for having determined two disputes, because it was in fact only one dispute, albeit there were a number of issues.

Scheldebouw BV v St. James Homes (Grosvenor Dock) Ltd [2006] EWHC 89 (TCC) (16 January 2006)

Mon, 16 Jan 2006 00:00:00 GMT

This was a trial of various preliminary issues, including whether the employer was entitled under the contract to appoint itself as the construction manager. Mr Justice Jackson held that a construction manager has a duty to be independent, honest, fair and impartial, and that he must perform his functions with reasonable skill and care to reach a decision which is fair and right, rather than a decision which favours the employer. This duty is not diluted by the presence of other professionals on the project. It was found that the employer was not entitled under the contract to appoint himself as the construction manager in the absence of an express term to that effect (which would be unusual).

United Utilities Water Plc v Environment Agency for England & Wales, HC(QBD) 13/01/06

Fri, 13 Jan 2006 00:00:00 GMT

C was a water and sewerage undertaker which operated waste water treatment plants, one of which treated effluent from a brewery and another treated effluent from a milk processing plant. Case regarding the application of the Pollution Prevention and Control (England and Wales) Regulations 2000. The Court held :- (1) the 2000 Regulations were intended to apply to waste water treatment activities and also applied to sludge; (2) the distances between the waste water treatment plants and the brewery and milk processing plants did not satisfy the requirement that installations were on the same site and the 2000 Regulations did not apply in relation to those processes on the facts.

Ardmore Construction Ltd v Taylor Woodrow Construction Ltd, [2006] CSOH 3

Thu, 12 Jan 2006 00:00:00 GMT

D engaged C under a contract for the carrying out of ground works. A dispute over various heads of claim was referred to adjudication, including an overtime claim based solely on a letter from D which was alleged by C to have been an instruction to accelerate. The adjudicator ordered D to make payments to C under each head of claim, finding in respect of the overtime claim that D had verbally instructed overtime or acquiesced in C working overtime. C issued proceedings in Scotland’s Court of Session to enforce the adjudicator’s award. D resisted enforcement in respect of the claim for overtime on the basis of breach of natural justice, arguing that no submissions had been made by C to the effect that D had issued any verbal instructions or acquiesced in the working of overtime. The Court of Session, who heard evidence from the adjudicator, refused to enforce the part of the adjudicator’s decision relating to overtime. Lord Clarke stressed that if an adjudicator behaves in a manner which involves a disregard for fair play, and the consequences have a substantial and material affect on his decision, the court should be prepared to intervene.

Ardmore Constructions Limited v Taylow Woodrow Construction Limited

Thu, 12 Jan 2006 00:00:00 GMT

Commercial/Construction

Plymouth & South West Co-Operative Society Ltd v Architecture, Structure & Management Ltd [2006] EWHC 5 (TCC) (10 January 2006)

Tue, 10 Jan 2006 00:00:00 GMT

C engaged D, a firm of architects, to design and manage the refurbishment of a department store. The refurbishment project considerably overran C’s budget as a result, C alleged, of D’s failure to perform its services with reasonable care and skill. HHJ Thornton QC gave judgment for C, finding that, at the commencement of the works, the design was insufficiently developed, and that D should have advised C to have the works carried out in two separate phases. It was also found that D failed to give adequate or proper advice as to the appropriate form of contract or procurement method, or as to the cost consequences of commencing the works with an insufficiently developed design.

Bernuth Lines Ltd v High Seas Shipping Ltd [2005] EWHC 3020 (Comm) (21 December 2005)

Wed, 21 Dec 2005 00:00:00 GMT

It was held that a notice of arbitration sent by D by email was validly served because it was received at the email address held out by C as C’s only email address, notwithstanding the relevant managerial staff had not received it. Clarke J held that a notice or document required to be served under an arbitration agreement could be given by any recognized means of communication (whether post, fax or email); if emailed, the notice had to be dispatched to the correct email address of the intended recipient and must not be rejected by the system. It was for the sender to show that receipt had occurred.

City of Westminster v Fountain & Colonnade Management Ltd [2005] EWCA Civ 1607 (20 December 2005)

Tue, 20 Dec 2005 00:00:00 GMT

D occupied a building which was accessed by a service road. Both the building and the road were constructed on a raft above a railway platform. D was party to an agreement with C whereby, in accordance with s.38 of the Highways Act 1980, C had agreed that it would undertake to maintain the road. In 2002 works were undertaken to the road which had involved the replacement of joints and plinths. C's argument, on appeal, that the works undertaken amounted to improvement works rather than maintenance / repair was rejected. The CA held that the joints were an incidental benefit to the highway and in light of the expert evidence the only appropriate solution (once damage had occurred) was to replace the joints. The distinction between repairs and improvements in relation to leasehold premises did not apply to liabilities arising by virtue of s.38 of the Highways Act 1980.

Alfred McaLpine Capital Projects Ltd v Siac Construction (UK) Ltd & Ors [2005] EWHC 3139 (TCC) (19 December 2005)

Mon, 19 Dec 2005 00:00:00 GMT

C was the main contractor for substantial works to an office building and claimed damages from D, one of its subcontractors. During the Pre-Action stages, various other parties had been advised of the possibility of claims for contribution or indemnity being made and at the first CMC D was required to issue any Part 20 claims by 30/11/05. Directions for trial were given. At the second CMC C sought permissions to join one of the Part 20 Defendants as a Defendant to the main action. The Judge gave directions in relation to the situations where there is a conflict between not depriving a party of the benefits of the Protocol and ensuring that an existing timetable be maintained. The following considerations are relevant in that situation (1) when it was known that the party in question was going to be joined; (2) what information about the action and the underlying dispute was given to that party before joinder and when it was given; (3) how large a part the new party played in the action as a whole; (4) what stage, if any, could be accommodated in the proceedings against the new party without jeopardising the overall timetable; (5) whether justice required that the whole timetable should be put back and a new trial date fixed; (6) whether the new party could be compensated for in costs for any non compliance with the Protocol; and (7) whether there was any way (other than a stay) within the parameters of the existing timetable by which the new party could be put in the same position that it would occupy if the Protocol had been followed.

Covington Marine Corp & Ors v Xiamen Shipbuilding Industry Co Ltd [2005] EWHC 2912 (Comm) (16 December 2005)

Fri, 16 Dec 2005 00:00:00 GMT

C appealed an Arbitration Award on the basis that the Arbitrators' conclusions had been wrong in law. C and D were parties to shipbuilding contracts which included a term which provided for automatic rescission of the contracts in the event that certain conditions subsequent were not met, namely (i) agreement on the supplier of a main engine within a fixed period; and (ii) provision of a letter of guarantee in respect of a refund of pre-contract payments to D in the event that the contracts were rescinded. Langley J held that the Arbitrators had erred in law on the facts in concluding that there was no agreement in relation to the main engine and also held that on a proper construction of the term D had waived the fixed period for the provision of the letter of guarantee. The award was varied.

Henry Boot Construction Ltd. v Alstom Combined Cycles Ltd. [2005] EWCA Civ 814 (16 June 2005)

Fri, 16 Dec 2005 00:00:00 GMT

Contractor submitted final account for civil engineering works in stages; provisional interim certificates were issued by the engineer. The employer disputed valuation in engineer’s final certificate. The employer contended the contractor’s claims under the final certificate were statute-barred at the date of final certificate. The dispute was submitted to arbitration: arbitrator decided that almost all the claims were statute-barred. Contractor appealed. The appeal was allowed in part: the right to payment arose not when the work was done but when a final certificate was issued; time did not start to run from interim certificates.

Covington Marine Corp. & ors v Xiamen Shipbuilding Industry Co. Ltd, QBD (Commercial Court), Langley J, 7 and 8 December 2005

Fri, 16 Dec 2005 00:00:00 GMT

Arbitration appeal by C under Sections 69(2) and (3) of the Arbitration Act 1996 in respect of four shipbuilding contracts. Arbitrators found that no final agreement was reached between C and D. C appealed; D contended there was no permissible ground of appeal against the arbitrator’s decision because it was a question of fact, not law. Langley J found that the question of whether an agreement was concluded was a question of law or mixed fact and law, but a court should be reluctant to differ from the decision of the arbitrators unless their decision was “plainly untenable”. However, he held that the arbitrators were wrong to conclude there was no agreement and their conclusions were wrong in law.

Full Metal Jacket Ltd v Gowlain Building Group Ltd, CA, 9/12/05

Fri, 09 Dec 2005 00:00:00 GMT

Court of Appeal found that the judge had correctly held that a contract to provide a new roof required the work to be carried out in accordance with a detailed drawing of the roof provided for the purposes of obtaining a quotation for the work.

Midland Expressway Ltd v Carillion Construction Ltd & Ors (No. 2) [2005] EWHC 2963 (TCC) (24 November 2005)

Thu, 24 Nov 2005 00:00:00 GMT

C was granted the right to design, construct and operate the proposed M6 toll road by the DTI under a PFI agreement. C engaged D, a joint venture, to construct the road under a PFI building contract. The DTI issued a formal variation order under the PFI agreement. D made applications for interim payments in respect of the variation, but only partial payment was made. D commenced adjudication proceedings under the Housing Grants, Construction and Regeneration Act 1996 in relation to the quantification of its claim in relation to the variation. C applied for declarations and injunctions against D on the basis that it was not entitled to proceed to adjudication. Finding for D, the TCC held that an adjudication provision in the building contract contravened section 108 of the 1996 Act, and that an adjudication under the scheme provided in the 1996 Act was the appropriate procedure and could be pursued notwithstanding the dispute resolution procedure under the building contract had not yet been fully operated.

Shawton Engineering Ltd v DGP International Ltd (t/a Design Group Partnership) & Anor [2005] EWCA Civ 1359 (18 November 2005)

Fri, 18 Nov 2005 00:00:00 GMT

Appeal by C (main contractor) against dismissal of claim for damages against D (subcontractor) for repudiatory breach of contract in failing to complete subcontract design work within a reasonable time. It was found that substantial variations to the sub-contract had rendered fixed dates for completion inoperable, therefore the obligation was to complete within a reasonable time. Where time was not of the essence and D was making an effort to perform the contract, it was intrinsically difficult for C to establish a fundamental breach. What was a reasonable time had to be judged at the time when the question arose in light of all relevant circumstances. Appeal dismissed.

Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358 (16 November 2005)

Wed, 16 Nov 2005 00:00:00 GMT

D sought permission to appeal against decision enforcing adjudicator’s decision on basis that the adjudicator’s decision was outside his jurisdiction, breached rules of natural justice, gave inadequate reasons and that the adjudicator had no jurisdiction to award interest. Permission to appeal was refused on all grounds except that of interest. Court of Appeal held that the courts should enforce an adjudicator’s decision unless it was plain that he had not decided the question referred to him or that the manner in which he acted was obviously unfair. The courts should not encourage the approach adopted by D, which was to try to find some argument however tenuous to resist payment. On interest, the Court of Appeal held that the judge was wrong to find that the adjudicator had a free-standing power to award interest where there was no contractual provision for interest; however, it was found that the parties had agreed that the question of interest was within the adjudicator’s scope, therefore D’s appeal was dismissed.

Captiva Estates Ltd v Rybard Ltd (In administration), HC(QBD)(TCC), 11/11/05

Fri, 11 Nov 2005 00:00:00 GMT

C engaged D to construct 28 flats on a site owned by C. The contract contained an option for D to take leases in respect of 7 of the 28 flats. C referred a dispute to adjudication: D commenced proceedings for a declaration that the contract was not subject to the right to adjudicate by virtue of Paragraph 6 of the Construction Contract Exclusion Order 1998 (S1 1998 No. 648), which excluded development agreements from the definition of construction contracts. HHJ Wilcox QC found that the granting of an option was a relevant interest in land for the purposes of the 1998 Order, and that the contract was therefore excluded from the Construction Act.

David McLean Contractors Ltd v The Albany Building Ltd [2005] EWHC B5 (TCC) (10 November 2005)

Thu, 10 Nov 2005 00:00:00 GMT

C and D were parties to a JCT Contract which incorporated an entitlement to refer disputes to adjudication. In the event of an adjudication the CIC rules would apply. An adjudicator was appointed to consider whether a withholding notice issued by D was valid and determined that it was. In a second (later) referral, the same adjudicator was asked to consider whether D was entitled to deduct liquidated and ascertained damages from various interim certificates. The adjudicator held that the withholding of those damages was improper and awarded payment to C. On C's application for summary judgment D argued that the adjudicator did not have jurisdiction to determine the second adjudication because the validity of the withholding notices had already been decided. This argument was rejected on the basis that the first adjudication had concerned the narrow issue of the validity of the withholding notice whereas the second adjudication related to a different issue of whether there was an entitlement to deduct damages having regard to those withholding notices. HHJ Gilliland QC also held that the existence of a cross claim for liquidated damages was not a ground upon which to avoid enforcement.

Hackwood Ltd v Areen Design Services Ltd [2005] EWHC 2322 (TCC) (31 October 2005)

Mon, 31 Oct 2005 00:00:00 GMT

Applications under Section 72 of the Arbitration Act 1996. C appointed D to carry out refurbishment works. Works commenced on basis of letter of intent, which referred to the JCT contract. No formal contract was ever executed. C refused D’s applications for extensions of time. D gave notice of arbitration: C submitted that it was not party to any arbitration agreement with D as the terms of the JCT contract were never incorporated. Held that the effect of the letter of intent was to incorporate the terms of the JCT contract into the interim contract apart from those terms inconsistent with the letter, therefore C was party to an arbitration agreement with D.

Protech Projects Construction (Pty) Ltd. v Mohammed Abdulmohsin Al-Kharafi & Sons for General Trading, General Contracting and Industrial Structures WLL [2005] EWHC 2165 (Comm) (14 October 2005)

Fri, 14 Oct 2005 00:00:00 GMT

C sought to set aside a number of Arbitration awards made in favour of D under s68 of Arbitration Act 1996 on grounds of serious irregularity. C relied on 2 grounds. Ground 1 was failure by D to disclose a deed of cession (whereby proceeds of its claims against C were ceded to one of its creditors) which C alleged amounted to a serious irregularity within s 68(2)(g) of the 1996 Act. Ground 1 was rejected on the basis that there was nothing unconscionable or inherently wrong about the cessions, and thenon-disclosure was inadvertent. Ground 2 was that arbitrator failed to address the enforceability of the CFAs when making costs order which led to substantial injustice because C had to pay costs which D would not have been liable for any of the costs and equally K would not have been liable to pay if agreement was unenforceable. This was rejected because the enforceability of the CFAs was a question of law and therefore was not a seriously irregularity within s.68(2)(d).

Emcor Drake & Scull Ltd v Sir Robert McAlpine Ltd, CA, October [2005] 10 CL 80

Sat, 01 Oct 2005 00:00:00 GMT

Appeal by main contractor (A) against determination of a preliminary issue. Respondent sub-contractor (R) was engaged by A to carry out M&E works on a hospital PFI project on basis of letter from A to R confirming that price of £34.25 million was agreed in principle. R commenced work on basis of short form orders from A limited to work up to value of £14 million: no formal sub-contract was ever entered into. Court at first instance held that R was under no obligation to complete the whole of the works. The Court of Appeal, dismissing A’s appeal, held that the first short form order and A’s letter had to be considered together, and they did not evidence an agreement that R would carry out the whole of the works, let alone for the price of £34.25 million. Regard was only to be had to communications between the parties, not to uncommunicated subjective intentions.

LMS International Ltd & Ors v Styrene Packaging and Insulation Ltd & Ors [2005] EWHC 2065 (TCC) (30 September 2005) , Wates Construction Ltd v HGP Greentree Allchurch Evans Ltd, HC (QBD)(TCC), 10/10/05 [2006] BLR 45

Fri, 30 Sep 2005 00:00:00 GMT

These two cases, both decided by HHJ Coulson QC, concerned the principles upon which indemnity costs will be awarded. It was held in both cases that conduct must be unreasonable to a high degree to justify an award of indemnity costs, but it need not involve morally condemnatory conduct. In the former case, it was held that in exceptional circumstances a refusal to mediate might justify an order for indemnity costs, but in that case the failure to mediate was not the result of any unreasonable conduct. The decision to defend was “wrong and misguided”, but the defence was arguable and therefore not lacking in good faith. Indemnity costs were not awarded. In the latter case, it was held that late discontinuance of proceedings did not of itself justify an indemnity costs order, but indemnity costs were awarded from the point when the experts produced a joint statement from which it should have been clear that it was impossible for C to succeed.

Surefire Systems Ltd v Guardian ECL Ltd, QBD (TCC), Jackson J, 10/8/05

Wed, 10 Aug 2005 00:00:00 GMT

An application for leave to appeal against an arbitrator’s award was dismissed where the appellant failed to surmount the substantial hurdles in Section 69 of the Arbitration Act 1996. The legislative intent of Section 69(3) of the Act was to prevent parties seeking to dress up questions of fact as questions of law, and the evidence that was admissible on an application for leave to appeal was strictly limited.

Bryen & Langley Ltd v Boston [2005] EWCA Civ 973 (29 July 2005)

Fri, 29 Jul 2005 00:00:00 GMT

C had sought enforcement of Adjudicator’s decision for payment of final account. Judge had held not enforceable on basis that the C’s contention that JCT contract had been concluded was incorrect. CA granted appeal by C and held that there was a JCT contract in place because tender invitation submitted by B’s quantity surveyor had provided that JCT form would apply and fact that two parties proposed that their agreement should be contained in a formal contract (which was not actually achieved) did not preclude conclusion that they had already informally contractually committed themselves on exactly the same terms. CA also held that Adjudication provision in JCT contract form was not an unfair term for purposes of Unfair Terms in Consumer Contracts Regulations 1999.

Decoma UK Ltd v Haden Drysys International Ltd [2005] EWHC 2948 (TCC) (27 July 2005)

Wed, 27 Jul 2005 00:00:00 GMT

Determination of preliminary issues in relation to C's claim for damages for breach of contract against D arising out of alleged defects in a paint spraying system designed, built and installed by D. D's breaches contract prevented substantial completion being achieved and no final acceptance test of the system was carried out. C took system over and operated it for several years and had also made payment to D notwithstanding provisions in the contract that D would not be entitled to payment. In defence of claim D relied on the general conditions of the contract to limit or exclude its liability for damages which would have effect of restricting C's claim to 5% of original contract price. C argued that D was relying upon its own wrong. C's argument was rejected on the basis that the reasons for delay or the nature of D's breaches of contract were irrelevant to the proper construction of the contract. D was liable for liquidated damages as a consequence of its failure to achieve final acceptance which under the contract were capped at 5%.

Birse Construction Ltd v McCormick (UK) Ltd (Formerly Mccormick (UK) Plc) [2005] EWCA Civ 940 (26 July 2005)

Tue, 26 Jul 2005 00:00:00 GMT

Appeal against decision that claim was statute barred.

John Roberts Architects Ltd v Parkcare Homes (No. 2) Ltd [2005] EWHC 1637 (TCC) (25 July 2005)

Mon, 25 Jul 2005 00:00:00 GMT

D had instituted adjudication proceedings but subsequently abandoned them after both parties had incurred substantial costs. The Adjudicator ordered D to pay (1) the Adjudicator’s fees; and (2) C’s costs. Contract provided Adjudicator could, in his discretion, direct payment of legal costs and expenses "as part of his decision". C sought enforcement of Adjudicator’s order. Judge held that C was not entitled to its costs because (1) contract only provided for payment of legal costs if it was as a part of his decision; (2) the Scheme for Construction Contracts did not provide for recovery of costs; (3) a term could not be implied as a matter of business efficacy; and (4) no promise had been made by D that it would not discontinue the Adjudication.

Lloyd Projects Ltd v Malnick, QBD (TCC), 22/07/2005

Fri, 22 Jul 2005 00:00:00 GMT

D retained C to carry out building works to convert former offices into residential flats. Contract was concluded orally but during performance of contract C wrote to D setting out understanding of contract, to which letter D responded in writing. C applied to enforce Adjudicator’s decision awarding payment by D. Judge held that there was not a written contract for purposes of s 107(2)(b) and the letters did not evidence the material terms of the agreement such that s 107(2)(c) did not apply.

Yorkshire Water Services Ltd. v Taylor Woodrow Construction Northern Ltd & Ors [2005] EWCA Civ 894 (19 July 2005)

Tue, 19 Jul 2005 00:00:00 GMT

C had retained D1 to carry out improvement works to a sewage works to enable Y to comply with revised effluent standards. D1 retained pursuant to design and performance contract. C maintained plant as designed and constructed was defective. D1 succeeded in defence to claim on basis that contractual performance test would have been satisfied had it been carried out. Permission to appeal sought on 19 grounds. Permission was refused because it would not be viable unless C was able to re-open Judge’s findings of fact. C was unable to meet high requirements for permission to appeal on factual grounds.

Sinclair v Woods of Winchester Ltd. [2005] EWHC 1631 (QB) (14 July 2005)

Thu, 14 Jul 2005 00:00:00 GMT

Arbitration Act 1996. C sought (1) removal of arbitrator (s 24); or (2) setting aside of award (s 68). Judge held (1) s68 application could not be entertained because it was made outside time limit under s70(3) and it was not appropriate to extend time where C had been guilty of serious delays throughout arbitration; (2) C had lost right to object under s24 and s68 because C had not objected to conduct of Arbitrator at time (s 73); (3) s68 application also barred because C had not exhausted recourse to arbitrator under s70(2); and (4) in any event criticism of arbitrator’s conduct were unwarranted.

Lesotho Highlands Development Authority v. Impregilo SpA & Ors [2005] UKHL 43 (30 June 2005)

Thu, 30 Jun 2005 00:00:00 GMT

Challenge to Arbitrator's award under s 69(2)(b) of Arbitration Act 1996 on the basis that award was made in excess of jurisdiction. C also challenged the award of interest. Underlying contract had been for the construction of a dam in Lesotho and had provided for payment to contractors in Maloti. The value of Maloti had plummetted between the time when C should have made payment under the contract and the date of the Arbitrator's award and the Arbitrator awarded payment in the currency of the contractors. HL held (1) that the decision to award payment in a different currency constituted an error of law rather than evidence of the tribunal exceedings its powers within the meaning of section 68(2)(b) of the 1996 Act; (2) there were no findings of fact from first instance or CA that C suffered substantial injustice as a result of award of interest which would be a precondition to invoking remedy under s 68 of Act and power to award interest was available under Act unless parties expressly agreed to contrary.

Wimbledon Construction Company 2000 Ltd. v Vago [2005] EWHC 1086 (TCC) (20 May 2005)

Fri, 20 May 2005 00:00:00 GMT

D had sought stay of enforcement of Adjudicator's Decision on basis that alternative Arbitration proceedings had been commenced and there were grounds to be concerned that C's financial position meant C would be unable to repay sum paid under Adjudicator's Decision if Arbitration required it. Judge refused to grant stay of execution following Adjudicator's award because D had failed to show that C was insolvent or that there were reaonable grounds to believe that C would be unable to repay sum if D was successful in Arbitration.

Robertson Group (Construction) Limited v. Amey-Miller (Edinburgh) Joint Venture+ (SECOND) Amey Programme Management Limited + (THIRD) Miller Construction (UK) Limited

Tue, 10 May 2005 00:00:00 GMT

Construction/Debate/Interpretation:

Claire & Co. Ltd. v Thames Water Utilities Ltd. [2005] EWHC 1022 (TCC) (19 April 2005)

Tue, 19 Apr 2005 00:00:00 GMT

Applications by C under sections 33, 34, 67 and 68 of Arbitration Act 1996 in relation to Arbitration carried out under Water Industry Act 1991 to determine what, if any, loss had been suffered by C as a result of D's exercise of statutory functions. Claim was for loss of profit and loss of business. The Arbitrator determined that the loss of profit was £78,390 utilising a profit margin of 22%. C alleged that D's expert had conceded that the appropriate profit margin was 75% and challenged the Arbitrator's decision on the basis that (1) the profit was calculated by reference to a turnover figure which was not in dispute and he therefore exceeded his jurisdiction; and (2) he did not act fairly because D's expert's concession was ignored. Application dismissed because (1) There was no evidence that D's expert had conceded that a profit percentage of 75% would be achieved; (2) if concession was made, the arbitrator was not deprived of jurisdiction because issue as to what was the appropriate profit margin remained; and (3) weight to be attached to each piece of evidence was entirely a matter for the arbitrator; and (4) It was not permissible to use those Section 33 of Act to appeal on a question of fact.

Amec Civil Engineering Ltd v Secretary of State for Transport [2005] EWCA Civ 291 (17 March 2005)

Thu, 17 Mar 2005 00:00:00 GMT

C appealed against dismissal of its application under section 67 of the Arbitration Act 1996 to set aside an award by an engineer appointed under the ICE Conditions of Contract for want of jurisdiction. C claimed that no dispute had arisen and that the engineer had given it no opportunity to make submissions. Appeal dismissed: “dispute or difference” was to be interpreted inclusively and that, in the circumstances, including the imminent expiry of the limitation period, a dispute had arisen. An engineer deciding a dispute under Clause 66(1) acted as certifier not adjudicator or arbitrator, hence he was not obliged to comply with the rules of natural justice applicable to those who acted judicially, although he was required to act independently, honestly and fairly. The engineer was under no obligation to invite submissions from C in the circumstances. The policy of the Arbitration Act 1996 does not encourage second appeals, which generally delay the resolution of disputes by the contractual machinery of arbitration.

Connex South Eastern Ltd v M J Building Services Group Plc [2005] EWCA Civ 193 (01 March 2005)

Tue, 01 Mar 2005 00:00:00 GMT

C appealed against refusal to grant a declaration that, due to D’s delay in giving notice of intention to refer a dispute to adjudication, the notice was an abuse of process. Appeal dismissed: concept of abuse of process was not extended under the Housing Grants, Construction and Regeneration Act 1996 to give an adjudicator the power to strike out or stay an adjudication for abuse of process. There was no time limit for reference to adjudication in the 1996 Act, therefore D’s notice should not be struck out.