UK: January To June 2013 Case Review

Last Updated: 30 July 2013
Article by Becky Johnson

Following on from our case law updates for 2012, please see the below selection of cases decided in the first half of 2013 which may be of interest to our clients and contacts in the property and construction sectors:

No right to direct payments

A.J. Building and Plastering Limited v Turner, Munday & Dalling [2013] EWHC 484 (QB)

A.J. Building were sub-contractors hired by Rok (on behalf of Zurich) to complete insurance repairs. Rok failed to pay A.J. Building before going into administration. A.J. Building sought to recover payment directly from the householders, stating that they had a direct contractual obligation to do so as the householders had signed a "Work Authority Mandate".
The judge rejected the claims on the basis that it was understood by all parties involved that Zurich would pay for the repairs. Furthermore, the householders had no discussion or input into the price of the works. The effect of the Mandate was that the insurer (Zurich) was responsible for covering the insured losses, while the householder was responsible for any payment over and above that of the insurance repairs (policy excess and additional works not covered by the policy). These claims, though for small amounts, served as test cases and confirmed that sub-contractors cannot recover where they do not have a direct contractual relationship or other express right to be paid directly.

Duties to third parties for defects

Hunt and others v Optima (Cambridge) Ltd and others [2013] EWHC 681 (TCC)

In this case, parties who had purchased long leasehold interests in flats sought to claim substantial damages for numerous defects from Optima (the developer) and Strutt & Parker ("S&P" who were responsible for providing certificates in respect of the works). The developer was held liable for breach of sale agreements and repairing covenants. The court also had no doubt that S&P owed a duty of care to the residents – the certificates amounted to a negligent misstatement and also a breach of warranty. Consultants therefore need to keep in mind that they may owe duties to third parties, even if they have not entered into a direct contract with them. The issues discussed in respect of the Limitation Act in this case also highlight the need to bring claims swiftly to avoid being time-barred. This case is also a reminder of the importance for consultants to make their own enquiries when certifying that works are satisfactory. It is not advisable to rely on what other members of the construction team have stated.

Net contribution clauses

West v Ian Finlay & Associates [2013] EWHC 868 (TCC)

Net contribution clauses seek to restrict a party's liability to the amount that would be apportioned to them by a court where more than one party is responsible for a loss. Without a net contribution clause the claiming party could sue for 100% of the loss. The defending party would then seek to recover the relevant parts of the loss from the other party responsible – which becomes a problem if that other party is insolvent. This was the position the architect found himself in in this case. After an apparently disastrous residential project, the Wests pursued the architect for damages. He sought to rely on a net contribution clause. Based on the facts of this case, the judge held that this clause did not exclude the architect's liability when the other party at fault was the main contractor. Consultants and their insurers should therefore be careful to ensure that their net contribution clauses are carefully drafted.

Signing as a company or an individual

Hamid v Francis Bradshaw Partnership [2013] EWCA Civ 470

The Court of Appeal confirmed that a contract evidenced by letter had been entered into by an individual, even though he had signed his name above and below the name of a trading company. The individual had not made it clear that he was not intending to contract in his personal capacity, and the fact that the other party to the contract could have made the connection between the signatory and the trading name of the company by using publicly available sources was not relevant. If you intend to contract as a company you must therefore make it clear you are doing so to avoid personal liability.

Take care over absolute obligations

Mueller Europe Ltd v Central Roofing (South Wales) Ltd [2013] EWHC 237

This case highlights the caution required where an employer needs to continue operating its business whilst construction works are in progress at its premises. Birdcage scaffolding was erected so that works could be carried out to a factory roof. Gas heaters caused a significant fire. The roofing contractor was held to be liable and the Mueller was awarded over £21m in respect of the damage caused. Although Mueller was in breach of its obligations under the contract to isolate some of the heaters, the breach of the roofing contractor's responsibility to safely carry out the works at all times was held to be the effective cause. Several of the contractor's breaches related to strict obligations under the contract (i.e. they were not subject to exercising reasonable skill and care) – where a party is in breach of such a term it cannot rely on the other party's contributory negligence. Parties should be careful therefore when agreeing to include absolute obligations to comply, and should in any event take care throughout the works to ensure that both parties are performing their own obligations as to safety.

Privilege does not extend to accountant's advice

R (Prudential plc and another) v Special Commissioner of Income Tax and another [2013] UKSC 1

The Supreme Court in this case refused to permit the doctrine of legal advice privilege to extend to cover tax law advice which is provided by accountants. Therefore it remains that only legal advice given to clients by their lawyers is protected by privilege – advice given by other professions (such as accountants) will not therefore be privileged.

Fall in property values not too remote to recover

John Grimes Partnership Ltd v Gubbins [2013] EWCA Civ 37

A breach of contract by an engineer in this case resulted in delays to a development. The Court of Appeal found that the losses arising out of the reduction in the market value of the development, were recoverable by the developer. The Court confirmed the position that a party entering into a contract will be liable for the losses which were reasonably foreseeable at the time of entering into the contract (although there are some exceptions to this). Here, the reduction in the development value was foreseeable and therefore the engineer was liable. If contracting parties want to exclude liability for particular types of loss it remains the case that they should expressly do so in the contract Otherwise, defendants will have to rely on proving that the type of loss was not reasonably foreseeable at the time the contract was entered into.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions