UK: Case Law Update - Issue 4, September 2011


Construction Law Journal Vol. 27 Issue 4 2011

contains the following article:

Pay-when-paid and the Insolvency Exception
by Peter Sheridan.

Construction Law Vol. 22 Issue 4 May 2011
contains the following articles:

Challenges in adjudication
by Shona Frame and Fritha Wheeler-Ozanne, Macroberts.

The Scheme for Construction Contracts
by Fiona Rossetter, Dundas & Wilson.

A measure of success
by Ed Freeman, Clyde & Co
(on Redwing Construction v Wishart Samuel Townend: conditional fees).

Supplementary agreements

Compromise, supplemental and side agreements
by Peter Sheridan, Construction Law Journal, Vol 27 Issue 5 2011.

The article in the regular Construction Act Review slot considers whether further agreements of several different kinds, affect an adjudicator's jurisdiction, since it may not be clear whether, for example, a settlement agreement is a dispute.

The cases reviewed include:

Shepherd v Mecright: Paul Darling QC
Westminster Building v Beckingham: Gaynor Chambers and Simon Hughes QC
L Brown & Sons v Crosby Homes: Simon Hargreaves QC and Alexander Nissen QC
GPS Marine v Ringway Infrastructure: Justin Mort and Samuel Townend

The conclusion summarises the current position of the law on compromise agreements in particular.

Waiver of jurisdiction and writing

Durham County Council v Jeremy Kendall CILL 3017 May 2011 TCC

The result of the case turned on the finding that there was a single binding contract evidenced in writing for the purposes of s.107 HGCR Act, rather than three separate agreements as the defendant argued. However, more important (since such cases are set to become of chiefly historical importance) is the obiter discussion of waiver or jurisdictional objections. The court focussed on the distinction between 'specific' and 'general' reservations and particularly GPS Marine v Ringway (Samuel Townend and Justin Mort).

See CN Associates v Holbeton under Keating Chambers Reported Cases on reservation of position on jurisdiction and conditional leave to defend.

See Redwing Construction v Wishart under Keating Chambers Reported Cases on effect of obiter dicta in previous adjudication and use of slip rule powers.


Journal of International Arbitration Vol. 28 No. 3 June 2011

contains the following articles:

Arbitration agreements and a national law: a question of intent?

Impartiality and the issue of repeat arbitrators
by Raphael de Vietri and Kanaga Dharmananda, Francis Burt Chambers, Perth.

International arbitration and the duty to know the law
by Jeff Waincymer, Monash University.

Nurdin Jivraj v Sadruddin Hashwani: the English Court of Appeal erects a regulatory barrier to appointment of arbitrators in the name of anti-discrimination
by Inae Yang, Tulane University.

International arbitration and Shari'a Law: context, scope and intersections
by Ahmad Al Khamees.

Polimaster v RAE Systems: My place or yours? But not both
by Erica Stein, Hanotiau & van den Berg, Brussels.

Are arbitrators not human? Are they from Mars? Why should arbitrators be a separate species?
by Sarosh Zaiwalla, Zaiwalla & Co. London.

The mediated settlement agreement – the Ecuadorian experience
by Ximena Bustamante Vásconez.

Construction Law Vol. 22 Issue 5 June 2011

contains the following articles:

Cross border mediation
by Jane Fender-Allison, Dundas & Wilson.

Expert shopping: try before you buy?
by Suzanne Seaman and Jane Hughes, Collyer Bristow.

Arbitrators rescue from the Italian Torpedo
by Alexander Whyatt, Clyde & Co
(on party to English arbitration bringing court proceedings in other jurisdictions).

Construction Law Vol. 22 Issue 4 May 2011

contains the following articles:

Part 36 – where are we now?
by David Lloyd Jones, Gateley Wareing.

The scope of a consultant's duty of care
by James Doe, Herbert Smith.

Construction Law Vol. 22 Issue 6 July 2011

contains the following articles:

Choosing your adjudicator
by David Lloyd Jones, Gateley.

Hired guns bite the dust?
by Ian Cocking, Clyde & Co
(on Jones v Kaney).

A cautionary tale
by Rachel Chaplin, Clyde & Co
(on costs consequences of refusing mediation).

Arbitration Law Monthly Vol. 11 No. 6 June/July 2011

contains the following articles:

Undisclosed principal on Novasen v Alimenta
(on the doctrine of an undisclosed principal in a contract).

Anti-arbitration injunctions on Claxton Engineering Services v TXM
(on courts' power to restrain participation in arbitration proceedings).

Admissible evidence on Dolphin Tanker v Westport Petroleum
(first decision on Practice Direction 62 on admissibility of evidence for s.69 Arbitration Act challenge).

Interim relief on Telenor East Holding v Altimo Holdings
(on whether court should intervene where a party wishes to preserve contractual status quo pending arbitration outcome).

Declaratory awards on West Tankers v Allianz: a further hearing
(on the enforceability of a declaratory award by judgment).

Global Arbitration Review Vol. 6 Issue 2 2011

contains the following articles:

Revolution and arbitration
(on arbitration in North Africa and Middle East).

Quantum mechanics
by Sebastian Perry
(on the role of damages experts in international arbitration).

It's getting easier in Indonesia
by Nicholas Peacock, Herbert Smith, Singapore (on arbitration in Indonesia)

Arbitration Vol 77 No 3 August 2011

(Journal of the Chartered Institute of Arbitrators)

contains the following articles:

Religious arbitration: a study of legal safeguards
by Farrah Ahmed, Queen's College, Oxford and Senwung Luk, Olthuis Kleer Townsend, Toronto.

The standard of proof in international commercial arbitration
by Michael Bond, Schedler Bond, Washington DC.

The US Arbitration Fairness Bill: Regulation not prohibition
by Amir Weizenbluth, New York University.

Mediation in Mongolia
by Sanja Tseveenjav, Legas, Ulan Bator.

A word on Halsey v Milton Keynes
by Lord Dyson.

Time to think: understanding dispute management
by Derek Roebuck, University of London.

The enforcement of adjudicators' awards under the Housing Grants Construction and Regeneration Act 1996 Part 40
By Kenneth Salmon, Mace & Jones, Manchester.

Russian billionaires revisit Norwich Pharmacal Orders
by Hew Dundas.

When an arbitrator becomes functus officio and the impact of this on settlement of an arbitration
by Masood Ahmed, Birmingham City University.

Building towards compulsory mediation
by Erich Suter, Park Chambers.

Litigate to adjudicate in relation to tenancy deposit protection
by Julian Sidoli de Ceno, Birmingham City University.

All is not well with Irish arbitration: the grey clouds of Galway Bay Council v Samuel Kingston Construction Ltd.
by Tom Wren.

Arbitration Law Monthly, Vol 11 8 September 2011

contains the following articles:

Arbitration in Hong Kong
(on the new Hong Kong Arbitration Ordinance)

(on cross-border mediation).

Interim Relief
(on contracting out of the court's powers).


Construction Law Journal Vol. 27 Issue 4 2011

contains the following articles:

Electronic documents in construction litigation: lessons from experience
by Ronan Champion, Champion Pearce.

Reasonable settlement revisited
by Michael Wheater, Hardwicke.

International Construction Law Review Vol. 28 Part 3 July 2011

contains the following articles:

The evaluation of plant claims in construction
by Franco Mastrandrea.

Early completion and its effect on the contractor's right to an extension of time
by Andrew Stephenson, Clayton Utz, Melbourne.

DAB, DRB, CDB, DB – the Alphabet Soup of Dispute Boards: should this soup be on the menu in the UAE?
by Gordon Jaynes

Defects liability after the contract has been terminated by the contractor
by Wolfgang Breyer, Breyer Rechtsanwälte, Stuttgart.

Licensing of Contractors in Australia

Cook's Construction Pty Ltd v SFS [2011] Con LJ Vol 27 No 5 418 Queensland Court of Appeal.
Under the Queensland statutory licensing scheme for contractors (other Australian statutes have similar regimes), certain categories of work cannot be carried out lawfully except by licensed contractors. The court held that money paid to an unlicensed contractor was recoverable because paid as a result of mistake, the basis of the claim being in restitution.

Nature of lump sum and cost plus contracts

Sykes v Packham [2011] TCLR 6 Court of Appeal
On the facts of the arrangement for small scale internal works, the court held that there was neither a lump sum nor a cost plus contract but an implied agreement to carry out work for a reasonable price, just as would have been the case under the Supply of Goods and Services Act.
Keating 8th edition para. 2-008 was discussed at some length by the CA.

Construction Law Journal Vol 27 Issue 5 2011

contains the following articles:

Contract Works Insurance: loss scenarios and the impact of policy exclusions
by Patrick Mead, Carter Newell, Brisbane.

Getting back into shape – toning up fitness for purpose
by Pamela Jack, Minter Ellison, Sydney.

Reasonably foreseeable uncertainty
by Nicholas Brown, Pinsent Masons.

'Time' in 'the Noughties'
by Roger Gibson, Gibson Consultancy.

The issue also includes the valedictory speeches for His Honour Judge Toulmin on his retirement from the TCC.

Mealey's International Arbitration Reports

contain the following articles:

April 2011
Vienna perspective 2011
by Christian Dorda and Veit öhlberger, Dorda, Brugger Jords, Vienna
(on recent Austrian Supreme Court decisions on arbitration).

The 2011 French arbitration reforms in comparative perspective
by Pierrs Heitzmann and Johanna Schwartz Miralles, Jones Day, Paris.

The scope of the legality requirement in relation to investments: recent case law
by Michael Polkinghorne, Kristen Young and Eugenia Levine, White & Case.

May 2011

A primer on taking of evidence abroad
by The Hon William Bassler and Christian Stueben, Fordham University.

June 2011

The final piece in the puzzle? West Tankers revisited
by Edward Poulton, Laura Carlisle and Sunil Mawkin, Baker & McKenzie.

Delay analysis

De Beers UK LTd v Atos Origin IT Services UK Ltd [2011] BLR 274 TCC

In this IT case, the court had to consider the principles applicable to concurrent delay. The judgment was handed down some six months after City Inn v Shepherd Construction in the Inner House of the Court of Session, but without citing it. The approach taken seems to have been a straightforward application of Henry Boot v Malmaison Hotel and thus "at odds with the apportionment approach developed in City Inn". The other point worthy of comment is the link between contractual mechanisms and repudiatory conduct: "The failure on the part of Atos to have engaged the notice provisions requiring payment fatally undermined its argument that non-payment by De Beers was a repudiatory breach" (note from Con LR).


Construction Law Journal Vol. 27 Issue 4 2011

contains the following articles:

Nuclear Decommissioning Contracts: the legal and commercial issues
by Hamish Lal, Jones Day.

Construction Law Vol. 22 Issue 5 June 2011

contains the following articles:

Don't blame JCT for contract size
by Michael Phipps, Thurston Consultants.

Bribery Act 2010 and the construction industry
by Valerie Surgenor, Macroberts.

OFT fine setting powers curbed
by Alan Davis, Pinsent Masons.

Practical completion pitfalls
by Simon Colegate, Wragge & Co.

Long tail liability – a dilemma for insurers
by John Wright, JD Risk Associates.

Construction Law Vol. 22 Issue 4 May 2011

contains the following articles:

Supplemental provisions need a rewrite
by Michael Phipps, Thurston Consultants
(on JCT Minor Works promotion of collaborative approaches).

Win the war, but don't lose the battle
by James Pratt, Pinsent Masons.

Professional indemnity – pitfalls for the unwary
by John Wright, JD Risk Consultants.

Construction Newsletter May/June 2011

contains the following article:

Time to complete
by Chris Hoar, Foot Anstey
(on concept of time under construction contracts).

Construction Law Vol. 22 Issue 6 July 2011

contains the following articles:

No need for casting in stone by Michael Phipps, Thurston Consultants
(on unwritten instructions to contractors).

Transparency in public sector procurement
by Will Buckby and Sabrina Ashoor, Beale & Co.

Is procedures guidance adequate?
by Vijay Bange, Trowers & Hamlins.

Who owns the float?
by Shona Frame, Macroberts.

Concurrent liability – the reliance factor
by John Wright, JD Risk Associates.

International Construction Law Review Vol. 28 Part 3 July 2011

contains the following articles:

Some legal aspects of BIM in establishing a collaborative relationship (on Building Information Modelling)
by Monika Chao-Duivis, Delft University of Technology.

DBOM contracts in Australia
by Andrew Chew and Geoff Wood, Baker & McKenzie, Sydney.

Alliance contracts and fiduciary duties: trust and confidence in relationship contracting
by Trevor Thomas, Clayton Utz, Melbourne.

Book review of Hudson's Building and Engineering Contracts
12th Edition, Atkin Chambers
Review by Philip Bruner.


Scope of Defective Premises Act

Jenson v Faux [2011] CILL 3025 and [2011] TCLR T77 Court of Appeal

The CA held that the Defective Premises Act 1972 only applies to the provision of a new dwelling and not to the refurbishment or modification of an existing dwelling. On the facts of this case, the works in question did not amount to the provision of a new dwelling. The test is whether a "wholly different' identity results, which could happen by conversion, but had not done so here. The claimants were entitled to rely on the Act and the CA allowed the defendant's appeal in striking out this claim.

Negligence in latent defects inspections

Liberty Syndicate Management Ltd v Campagna Ltd [2011] Con LJ Vol. 27 Issue 4 p.275 TCC

The claimants were underwriters of a latent defects insurance scheme for residential properties in the UK and Ireland. Campagna, the defendants provided technical audit inspections for them. Following a large number of policy claims in Ireland, Liberty sued Campagna, alleging breach of contract through negligent inspections. The TCC distinguished the role of a technical auditor from that of a building surveyor and building control officer, although it encompassed some of the duties of each. A technical auditor could not be expected to identify every defect, nor to call for opening up of works without reasonable cause. However, especially in Ireland, there had been lapses from the acceptable standard in failure to identify errors in construction.

Expert witness immunity

Jones v Kaney [2011] BLR 283, 135 Con LR 1 Supreme Court

Already noted in March 2011 issue. The Supreme Court held by a 5-2 majority that the long-established immunity suit for negligence of expert witnesses should be removed. Lord Phillips concluded his examination of the policy arguments with the finding that "the immunity from suit for breach of duty that expert witnesses have enjoyed in relation to their participation in legal proceedings should be abolished. I emphasise that this conclusion does not extend to the absolute privilege that they enjoy in respect of claims in defamation".


See Redwing Construction Ltd v Wishart under Keating Chambers Reported Cases on recoverability of Conditional Fee Agreement and After the Event Insurance costs in adjudication enforcement proceedings.

The Commercial Litigation Journal May/June 2011 No. 37

contains the following articles:

Confidentiality: silence is golden
by Alan Watts and Anna Bateman, Herbert Smith.

Bribery Act: more or less guilty
by Matthew Leverton, Harbottle & Lewis.

Costs: giving up gracefully
by Dick Warner, Class Legal.

Procedure: making your mind up
by Jonathan Payne, Ely Place Chambers and Richard McKeown
(on Edwards-Tubb v Wetherspoon – expert reports).

Expert evidence: nowhere to hide
by Gary Lawrenson, Osborne Clarke
(on Jones v Kaney).

Competition law: (not) breaking the bank
by Kai Struckmann and Genevra Forwood, White & Case, Brussels (on EC imposed fines).

Arbitration: turning the tanker around
by Richard Power and Louise Trotter
(on West Tankers).

Confidentiality and hearings in public

The following cases have been reported on principles relating to public hearings in litigation and confidential material:

Ambrosiadou v Coward [2011] Times Law Reports 21 April Court of Appeal.

Should be possible to protect confidential information without resorting to private hearing.

North Shore Ventures v Anstead Holdings [2011] Times Law Reports 22 April

Interpretation of Practice Direction 39A and City of Moscow case.

Law Society Annual Report

The Law Society's Annual Statistics Report for 2010 showed that the number of solicitors holding practising certificates is now 117,862. This represents an increase of 115% on the 1990 figure of 54,734.

Annual admissions have increased by 127% from 3729 in 1990 to 8408 in 2010.

Since 2000, the number of firms of solicitors has increased by 7%. The number of firms with more than 80 partners has increased by 50%.

Since 1990, the number of solicitors working in commerce and industry has gone from 4% of holders of practising certificates to almost 11%.

Lloyd's Maritime and Commercial Law Quarterly

Part 3 August 2011

contains the following articles:

Forum non satis: Spiliada and an inconvenient truth
by Adrian Briggs, University of Oxford.

The continued obscurity of economic duress
by Carmine Conte, Keble College, Oxford.

Indemnities, exclusions and contribution
by Wayne Courtney, University of Sydney.

The 1906 Act, common law and contract clauses – all in harmony?
by Lord Mance.

An international Convention on offshore hydrocarbon leaks?
by Judge Steven Rares, Australian Capital Territory.

Estoppels as Swords
by Michael Barnes QC.

Insurance policies for multiple insureds: the effect of a composite approach to construction?
by Brian Harris,, Nottingham Trent University.

Client money rules and Lehman Brothers
by Harry McVea, University of Bristol.

A construction conundrum?
by David McLauchlan, Victoria University of Wellington.

Performance Bonds

Meritz Fire & Marine Insurance Co. Ltd v Jan de Nul NV [2011] BRL 320 Commercial Court
The main issue in this case was the status of advance payment guarantees. The court held them to be performance bonds. The underlying transactions were between parties in different jurisdictions and did not contain clauses excluding or limiting defences available to a surety; the undertaking was to pay on demand. The instruments were issued by an insurance company, not a bank. Two further issues were decided: whether any material changes to the contracts or the contractor's corporate reorganisation discharged the guarantees and whether the liquidation of the contractor prevented demand for repayment of the advance sums, precluding demand under the guarantees. The court was dismissive of both arguments.

Injunction of performance bond

Simon Carves Ltd v Ensus UK Ltd [2011] BLR 340 [2011] 135 Con LR 96 [2011] CILL 3009 TCC
The court held that fraud is not the sole ground on which a call on an 'on demand' bond can be restrained by injunction. A beneficiary seeking payment in circumstances where the underlying contract clearly and expressly prevents it from doing so is a further ground. If the underlying contract contains such a provision, an interim injunction could be granted restraining the beneficiary, subject to the usual American Cyanamid test.

Performance Bond enforcement

AES-3C Maritza East 1 EOOD v Credit Agricole Corporate and Investment Bank [2011] BLR 249 TCC
The court confirmed that on-demand bonds, under the ICC Uniform Rules for Demand Guarantees, should be enforced by summary judgment, provided an appropriately worded demand had been made. The bonds in the case related to the construction of a power plant in Bulgaria. The first demand was held to have been unsuccessful, in that while it demanded payment of £93 million, it only attached invoices and demands for £27 million. The second demand did not repeat this mistake and so that was valid and enforceable. Because of an adverse judgment in the French courts, granting an injunction the TCC ordered a stay of enforcement pending the discharge of the French injunctions, given that it was an English law contract.


Redwing Construction Ltd v Wishart [2011] TCLR T84 TCC
The detailed facts of this case on adjudication enforcement and the slip rule were noted in 2011 Issue 3. This hearing concerned After the Event insurance and conditional fee agreements. It was held that only 20% of the Conditional Agreement success fee was reasonable on the facts of the case and the nature of adjudication proceedings, given the prospects of success: 'The greater the prospects of success, the lower the reasonable and proportionate percentage will be'. Similar considerations would apply to the ATE insurance, where the premium of £8480 for £20,000 cover was described as 'substantially excessive', again, only 20% was held to be recoverable.
Samuel Townend

CN Associates v Holbeton Ltd [2011] BLR 261 TCC
The defendant Holbeton resisted adjudication enforcement proceedings on the ground that it was not a party to the contract which was the subject of the dispute. The court held that it had effectively reserved its position on jurisdiction and that it could therefore not have agreed to confer on the adjudicator power to decide his own jurisdiction. Summary judgment was therefore refused, although as Holbeton had only just passed the threshold for securing permission to defend, it had to pay the full sum claimed into court as a condition of being granted leave to defend.
Jessica Stephens

Redwing Construction v Wishart [2011] 135 Con LR 119

The defendant was held not to be entitled to resist enforcement of an adjudicator's decision on the ground that the matter in dispute had been decided in a previous adjudication between the parties. The first adjudication had only touched on the matters in dispute in the second by way of obiter dicta remarks, which were not jurisdictionally part of the first adjudication decision. The adjudicator had been entitled to correct an arithmetical error under his slip rule powers and to exercise those powers within two days was reasonable.
Samuel Townend

The articles and papers published by Keating Chambers are for the purpose of raising general awareness of issues and stimulating discussion. The contents must not be relied upon or applied in any given situation. There is no substitute for taking appropriate professional advice.

This material is prepared for Chambers by our Director of Research and Professional Development, Professor Anthony Lavers (LL.B. M.Phil Ph.D. D.Litt MCI.Arb FRICS Barrister) Visiting Professor of Law, Oxford Brookes University.

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