ADJUDICATION
See Reinwood v L Brown under Keating Chambers Reported Cases on the employer's right to deduct LADs where a certificate of non-completion had been cancelled.
Interim payment provisions
PC Harrington
Contractors Ltd v Multiplex Constructions (UK) Ltd [2008]
CILL 2544 TCC
A sub-contract on the Wembley Stadium project
contained provisions for interim payments. Following a dispute
between main contractor Multiplex and concrete sub-contractor
Harrington, Multiplex referred the matter to adjudication.
Harrington argued that on the figures which it claimed were
established, it should start the adjudication with £2.3
million in hand and claimed a declaration to that effect.
Refusing the declaration, the court held that the provisions
comprised a scheme for making interim payments, not for
establishing the ultimate position as between the parties.
Pierce Design
Section 111 and Melville Dundas revisited:
the Pierce Design case by Peter Sheridan and Dominic
Helps, Shadbolt & Co, Construction Law Journal 2008 Vol.24
No.2 p.95
The regular Construction Act review concentrates on
the application of Melville Dundas by
the TCC in Pierce Design International v
Johnston (Lucy Garrett and Richard Coplin) on the
issue of withholding of sums payable without a withholding
notice under HGCR Act s.111. The authors suggest means by which
contractors can seek protection against the effect of these
decisions and point out that it benefits them in setting off
losses under sub-contracts; it is not wholly an anti-contractor
decision.
Indemnity costs
Harris Calnan
Construction Co. Ltd v Ridgewood (Kensington) Ltd [2008]
BLR 132 TCC
The court awarded indemnity costs in enforcement
proceedings where the defendant had known or should have known
that it had no defence and no basis for challenging the award
on lack of jurisdiction. The challenger had not reserved its
position on jurisdiction in the adjudication and so would be
taken to have agreed to be bound by the adjudicator's
decision.
See Edenbooth Ltd v Cre8 Developments Ltd under Keating Chambers Reported Cases on the residential occupier exception and natural justice.
Natural justice
Cantillon Ltd v
Urvasco Ltd [2008] CILL 2504 TCC
In a piling dispute referred to adjudication, the
defendant refused to meet a decision against it and the
claimant brought enforcement proceedings. The defendant argued
unsuccessfully that the adjudicator had breached the rules of
natural justice; the court held that if one party argued a
point and the other failed to address it, that was not the
adjudicator's fault. In ascertaining what the dispute
comprised, the claimant was not limited to matters raised
before it crystallised.
Estates Gazette No. 0812
/ 29 Mar 2008
contains the following article:
No place for a weak
hand
by Hamish Lal, Dundas & Wilson LLP
Adjudications are only the first step in the process of
resolving contract disputes. They can be challenged, but any
party that does so must have a strong case.
No written agreement
BSF Consulting Engineers v MacDonald Crosbie [2008]
All ER (D) 171 TCC
In a dispute between the claimant civil engineers and
the defendant contractors for whom they had been working, the
claimants sought to enforce an adjudication award in their
favour. The defendants took the point that the scope of the
works and claimants fees were not expressly agreed and could
only be implied, so that there was no sufficient contract in
writing for s.107 HGCR Act. The court held that the Scheme, and
thus the right to adjudication, could only be implied where
there was a written contract for the purposes of the Act.
Accordingly, leave to defend was granted, since it was arguable
that the adjudicator had no jurisdiction.
ARBITRATION AND DISPUTE RESOLUTION
Arbitration
International Vol.24 No.1 2008
contains the following articles:
Birth of ICSID
case
(Transcript of 17th Annual Workshop of
Institute for Transnational Arbitration)
E-disclosure in
international arbitration
by Robert Smit and Tyler Robinson, Simpson Thacher
& Bartlett
Party appointed expert
witnesses in international arbitration: a protocol at
last
by Doug Jones, Clayton Utz, Melbourne
An umbrella just for
two? BIT obligations observance clauses and the parties to a
contract
by Nick Gallus, Queens University, Canada
Albon v Naza Motor
Trading: necessity for a court to find that there is an
arbitration agreement before determining that it is null and
void
by Nicholas Pengelley
Arbitration Law Monthly
Vol.8 No.4 April 2008
contains the following articles:
Serious
irregularity
on OAO Northern Shipping Co v Remolcadores De
Marin
(deciding the dispute on issues not argued).
Anti-suit injunctions
On Starlight
Shipping Co v Tai Ping Insurance Co.
(on the scope of the court's power to grant
relief).
Stay of juridical
proceedings
on Loon Energy Inc v Integra Mining
(existence of a dispute).
Judicial support for
arbitrations
on Pacific Maritime (Asia) v Holystone
Overseas
(freezing injunctions)
Enforcement of
arbitration awards
on ED & F Sugar v Lendoudis
(enforcement mechanisms).
ADR study
Encouraged, pushed or
forced the order of the day? by Aaron Hudson-Tyreman,
King's College, London, Construction Law Journal (2008)
Vol.24 No.2 p.79
The author provides an interim report on an ongoing
survey of the use of mediation in construction disputes being
carried out at King's College London in co-operation
with the TCC judges. The research considers: in what
circumstances mediation is an efficacious alternative to
litigation, whether and at what stage a court should encourage
mediation and which mediation techniques are particularly
useful. This interim report gives details of response rate and
the questions put; there are statistics given on types of case
mediated and the stages at which particular outcomes were
achieved. The results to date provide evidence of "a
healthy desire by the parties to seek mediation." The
study is due to be concluded in the summer of 2008, after which
a further, more detailed report is promised.
International
Construction Law Review 2008 Vol.25 Part 2
contains the following articles:
Chinese arbitration
requirements a trap for FIDIC ICC arbitration?
by Gotz-Sebastian Hök, Stieglmeier &
Collegen, Berlin
Obtaining the right
international arbitral tribunal: a practitioner's
view
by Christopher Seppala, White & Case, Paris
The power to grant
Mareva injunctions in aid of foreign proceedings: principles,
recent developments, and the Civil Justice (Miscellaneous
Amendments) Bill in Hong Kong
by Henry Suen and Sai On Cheung, City University of
Hong Kong
Governing Law
Braes of Doune Wind
Farm (Scotland) Ltd v Alfred McAlpine Business Services
Ltd [2008] LAWTEL TCC
The applicant employer under an EPC contract applied
for leave to challenge an arbitration award on a point of law.
The contract was under English law and the CIMAR regime, with a
seat in Glasgow for the arbitration. The project was a wind
farm in Scotland. The contractor argued that the English court
had no jurisdiction to hear the application. This argument was
unsuccessful: the parties had agreed to exclusive'
jurisdiction for the English courts. However, on the facts, the
application was unsuccessful and the contractor could enforce
the arbitrator's award.
Journal of International
Arbitration April 2008 Vol. 25 No. 2
contains the following articles:
Arbitration in the Arab world: an interview with Professor Ahmed Sadek El-Kosheri, ICC
The DIAC Rules and the
new UAE Arbitration Law
by Essam Al Tamimi and Emma van Son, Al Tamimi &
Co, Dubai.
Arbitration in Jordan:
from old to new
by Omar Aljazy, Amman.
ICC Arbitration in the
Arab world
by Lara Hammoud and Sami Houerbi, ICC.
Enforcement of foreign
arbitral awards in Maghceb countries
by Ahmed Ouerfel, Tunisia.
How Bilateral Investment
Treaties can protect foreign investors abroad
by Robert Greig, Claudia Annacker and Roland Ziade,
Cleary Gottlieb Steen & Hamilton, Paris.
Arab Arbitration v
International Arbitration? The case for a reconciliation
by Jalal El Ahdab, Orrick Herrington & Sutcliffe
and Ruth Stackpool-Moore, Debevoise and Plimpton.
Towards a reflexive
sociology of the arbitration field in the Arab World
by Abdulhay Sayed, Damascus Law School.
CONTRACT AND PROCUREMENT LAW
International
Construction Law Review 2008 Vol.25 Part 2
contains the following articles:
Construction law: an
overview of recent developments in the Baltics
by Dalia Foigt, Julija Kirkilene (Lithuania), Sigita
Kravale (Latvia), Margus Mugu (Estonia)
FIDIC Design Build
Operate Glitter or Gold?
by Samanthan Landsberry, Clayton Utz, Sydney
Contractors'
liability under the Civil Codes of Algeria, Egypt, Qatar and
the UAE
By Said Hanafi
See Bodill & Sons v Matta under Keating Chambers Reported Cases on the requirements for a trust account for retention monies under a JCT contract.
Construction Law April
2008 Vol. 18 Issue 3
contains the following articles:
Contract Sum disputes
can be avoided
by Michael Phipps, Thurston Consultants.
Routes to dispute
resolution
by Andrew Jones, HBJ Gately Wareing.
Insurance implications
of collateral warranties
by John D. Wright, JD Wright Associates
Sustainability
contracts
by Simon Oats and Tom Douglas, Eversheds.
Public Procurement Law Review (2008) Vol 17 PPLR
Issue 2
contains the following articles:
The revision of the WTO
Agreement on Government Procurement: to what extent might it
contribute to the expansion of current membership?
by Valeria Guimaraes de lima e Silva
The SIBR Program: Small
Businesses and "Individuals" on the Cutting
Edge.
by Damien C Specht; Jenner & Block, Washington
DC
CONSTRUCTION AND ENGINEERING CONTRACT DISPUTES LAW
See London Underground Ltd v Metronet BCV Ltd under Keating Chambers Reported Cases on entitlement to issue a corrective action notice under a PPP project.
See John F Hunt Demolition v ASME Engineering under Keating Chambers Reported Cases on the JCT 98 insurance provisions and settlements under Biggins v Permanite.
See Steria Ltd v Sigma Wireless Communications Ltd under Keating Chambers Reported Cases on time bars/conditions precedent and concurrency.
See Tyco Fire & Integrated Solutions v Rolls Royce under Keating Chambers Reported Cases on contractual requirement for joint names insurance for specified perils.
Economic duress and consideration
Adam Opel GmbH v Mintras Automotive (UK) Ltd [2008] CILL QBD
This non-construction case (it derives from motor manufacturing) examines economic duress in the context of commercial negotiation, referring to DSND Subsea v Petroleum Geo Services ASA (Timothy Elliott QC and Jonathan Lee, Stephen Furst QC and Marcus Taverner QC) and holding a contract to be void by reason of economic duress. In the discussion of the need for consideration, there is criticism of Wiliams v Roffey Bros, although as a Court of Appeal authority it could not be overruled.
Construction Law April
2008 Vol. 29 Issue 3
contains the following articles:
The value of time
by Shaun Tame, Brown Jacobson (on City
Inn v Shepherd Construction)
Finally, a definition
for practical completion
by Hamish Lal and Emily Busby, Dundas &
Wilson.
Knowing assignment a
little better
by Paul Newman, 3 Paper Buildings.
Jaw jaw
by John Sheils, Shadbolt & Co.
See London & Regional (St. George's Court) v Ministry of Defence under Keating Chambers Reported Cases on whether disputed claims had been certified and on no-loss argument.
GENERAL AND PROFESSIONAL NEGLIGENCE
See London Fire and Emergency Planning Authority v Halcrow Gilbert under Keating Chambers Reported Cases on failure of action for negligent design where remedial works not carried out.
Liability for results of fire
Biffa Waste Services
Ltd v Maschinenfabrik Erst Hese [2008] BLM Vol 25 No 4
TCC
Following a fire at a domestic waste plant, Biffa,
who were engaged under a PFI contract to collect and recycle
waste, sued parties engaged in the construction of the plant in
contract and tort. The main points of interest in the tortious
claims are the scope of vicarious liability for the actions of
non-employees and the scope of the non-delegable duty placed
upon an employer who has employed another to discharge his
extra-hazardous obligations. The contractual claims required
consideration of the role of the liquidated damages clause in
limiting liability of the party in breach and the avoidance of
double recovery.
See Kajima UK Engineering v Underwriter Insurance Co under Keating Chambers Reported Cases on the effect of notification of defects on the scope of insurance cover.
PRACTICE AND PROCEDURE
Pre-action protocol
Orange
Communications Services Ltd v Hoare Lea [2008] BLM Vol.25
No.3 p.6 TCC
In deciding whether proceedings should be stayed for
the TCC Pre-action Protocol process, especially where there are
Part 20 proceedings, the following considerations are relevant:
(i) when it was known that the party was going to be joined
(ii) what information that party had been given and when (iii)
how large a part that party would play (iv) what stay could be
accommodated without jeopardising the overall timetable (v) any
requirement of justice regarding delay of whole timetable and
trial date (vi) whether costs order could compensate (vii)
alternatives to a stay (viii) utility of stay/protocol process.
The court considered authorities on its case management
powers.
Costs on abandonment of item and mediation
Nigel Witham Ltd v Robert Lesley Smith
[2008] TCLR 3 [2008] CILL 2557
[2008] BLM Vol.25 No.3
TCC
The defendant clients were held to be the successful
party in that the claimant designers had had to pay them a
small amount as the net result of an action for fees with a
counterclaim, subject to a 15% reduction in respect of a
counterclaim item which had been abandoned. The judge rejected
the claimants' allegation that the defendants had
refused to mediate, although he doubted whether an early
mediation would have led to a settlement in the case.
See Aldi Stores v WSP Group under Keating Chambers Reported Cases on criteria for striking out where difficulties had not been raised with court in settling main action in complex multi-party proceedings.
Case management and the TCC
The Tower of Babel: what
happens when a building project goes wrong by Mr. Justice
Jackson, Construction Law Journal 2008 Vol.24 No.2 p.87
This is the text of the 2006 Denning lecture
delivered at the end of November 2006. After considering the
range of types of construction dispute, Jackson J considered
the TCC and, after treating its history and development, looked
at the effect of the CPR and the 2nd edition of the
TCC Guide on case management in the court. The lecture ends
with an overview of the (then) current TCC.
Waiver of privilege
Galliford Try
Construction Ltd v Mott MacDonald Ltd [2008] All ER (D) 30
TCC
The defendant engineer succeeded in an application to
remove part of a witness statement by a former director of the
claimant design and build contractor on the ground that it
related to without prejudice discussions and so was privileged.
The claimant contended unsuccessfully that the privilege had
been waived. The court held that much of the case law on
admissibility and without prejudice material had survived; the
CPR had not introduced a completely new regime destroying all
previous authority.
Transfer of proceedings
Collins v
Drumgold [2008] All ER (D) 27 TCC
The court had to consider an application for transfer
of a £300,000 claim from Cambridge County Court to the
TCC after the exchange of a large number of pleadings. The
claim was by a client against the contractor for breach of
contract and/or statutory duty. The court discussed the
criteria which militated in favour of allowing the application
on the facts.
Construction Newsletter
March 2008
contains the following articles:
What you've put
me through
by Paul Newman, 3 Paper Buildings (on the law of
damages)
Qualifications are
key' Construction Skills Certification Scheme
by Katie Graham, Stephenson Harwood
Fixed costs
Amber Construction
Services Ltd v London Interspace HG Ltd [2008] BLR 74
TCC
Where the Solicitors Fees' box on the claim
form had been filled in TBA', the court retained
discretion to allow costs in respect of categories normally
treated as fixed costs.
Relitigation as abuse of process
Taylor Walton v
Laing [2008] BLR 65 CA
Following a dispute between property developers, the
TCC gave judgment against Mr. Laing on the facts. Laing then
issued proceedings against solicitors Taylor Walton, alleging
professional negligence against them, relying on similar facts
to those in the earlier case. The Court of Appeal, reversing
the TCC, allowed Taylor Walton's application to strike
out the claim on the ground that the second action squarely
sought to relitigate the findings of the first judge.
Wrongful repudiation damages
Golden Strait
Corporation v Nippon Kisen Kubishika Kaisha [2007] 2 WLR
891, [2008] BLM Vol 25 No 4 HL
The issue for the House of Lords was the assessment
of damages for wrongful repudiation during the currency of a
long-term contract and whether such an assessment should take
account of events after the acceptance of the repudiation. Prof
Gunther Treitel has been critical of the decision to move away
from the date of the repudiation for assessment of quantum, a
movement he regards as likely to impair commercial certainty
and without compelling reasons to do so. See Law Quarterly
Review Vol 123 Jan 2007.
Subsequent conduct in contract interpretation
Wholesale Distributors Ltd v Gibbons Holdings Ltd [2007] BLM Vol 25 No 4 New Zealand SC
A majority of the Supreme Court of New Zealand departed, on the case before them, from the rule of English contract law that a court cannot have regard to conduct subsequent to contract formation in interpreting the contract. It is believed that English courts have not yet gone so far down this road as the NZ court.
Interest on late payments
Ruttle Plant Hire
Ltd v Secretary of State for Environment, Food and Rural
Affairs [2008] All ER (D) 191 TCC
The claimant provided plant, materials and labour to
the government in controlling a swine fever outbreak. The
dispute concerned interest payable on sums owed following a
re-invoicing. The court had to interpret the provisions of the
Late Payment of Commercial Debts (Interest) Act 1998 as to what
could be claimed, specifically as to what constituted
reasonableness of a particular rate.
KEATING CHAMBERS REPORTED CASES
Aldi Stores Ltd v
WSP Group plc [2008] CILL 2549 CA
Already reported in BLR, the appellant had secured a
judgment against its design and build contractor. It did not
pursue claims against the respondent professionals who had
given it warranties in respect of their work on the
development. Another owner on the site pursued the respondents
and others and those claims were settled at the start of the
trial. The appellant was unable to enforce against the
contractor or its insurers and so now brought claims against
the respondents. The action was struck out as an abuse of
process by the TCC but was reinstated on appeal. In doing so,
the Court of Appeal gave guidance as to the practice to be
followed in similar situations in future.
David Thomas QC
Bodill & Sons
(Contractors) Ltd v Mattu [2008] CILL 2553 TCC
The court held that an account set up by the client
for retention monies under JCT 98 did not meet the requirements
of making clear to the bank that it was a trust account or
subject to a trust. A reasonable period for setting up such an
account is two to three weeks and it should be designated as a
trust account. The contractor accordingly was entitled to
undertakings that the client would now do this.
Abdul Jinadu
London Fire and
Emergency Planning Authority v Halcrow Gilbert Associates
Ltd [2008] Con LJ 24 No.2 103 TCC
The client authority claimed in contract and tort for
the cost of repair of the fire damage, investigation,
replacement of equipment and use of alternative facilities,
following uncontrolled fires at its training centre, The Fire
House. The defendants were respectively the engineers who
designed the ductwork at The Fire House (Halcrow) and the
building services contractor (Lorne Stewart) and the claims
concerned breach of duty in performance of services in pre-fire
work on The Fire House and in remedial schemes. The court
reviewed the law on expert evidence in finding that a witness
for the claimant had been unable to give impartial evidence
because of a conflict of interest. In the result, Halcrow was
largely exonerated from allegations of breach of its design
duty, except in its duty to review design in the light of
experience of the fire. Lorne Stewart had breached its
obligations to rectify defects in its work but liability under
the contract had not been triggered, since the client had not
undertaken the remedial works. The court was not satisfied that
it intended to reinstate The Fire House. The claims failed.
Finola O'Farrell QC, Marcus Taverner QC
Steria Ltd v Sigma
Wireless Communications Ltd [2008] BLR 79 TCC
Already reported in CILL, this report concentrates on
the time bar/condition precedent aspects of the case, which
derives from the provision for a new computerised system for
the fire and ambulance services in the Republic of Ireland.
However, the case also contains important discussion of
concurrent delay, apparently endorsing the approach in
Malmaison (Finola O'Farrell
QC) and in Keating 8th edition and the
prevention principle analysis of Jackson J in
Multiplex Constructions v Honeywell Control Systems
(No.2) (David Thomas QC and Marc
Rowlands)
Simon Hargreaves
Tyco Fire and
Integrated Solutions (UK) Ltd v Rolls Royce Motor Cars Ltd
[2008] All ER (D) 16 CA
The Court of Appeal reversed the finding of the TCC
noted in March 2008 and reported in BLR. The claimant
contractor agreed to provide a fire protection system under a
design and build contract at the premises of the defendant
client. The contract required the client to take out joint
names insurance in respect of specified perils, which was not
done. When water from the mains flooded the client's
premises, the client obtained damages in adjudication. The
first instance court, applying CRS v Taylor
Young, held that the parties had provided
contractually for dealing with damage caused by specified
perils, so that the joint names insurance was the fund to which
both parties should have been able to look. The CA
distinguished the CRS case, upholding
the employer's appeal.
David Thomas QC, Krista Lee
Edenbooth Ltd v Cre8
Developments Ltd [2008] All ER (D) 20 TCC
The claimant succeeded in getting enforcement of an
adjudication decision when the defendant failed to pay. The
defendant was a company which engaged the claimant to do work
to the adjoining houses of two of the directors of the company.
The defendant argued that it was a residential
occupier' under s.106(1)(a) of the HGCR Act and
therefore not subject to the adjudication regime by reason of
the exception. The court rejected this argument. The
defendant's argument that the speed with which it was
required to produce information in adjudication was contrary to
natural justice was also rejected.
James Thompson
London Underground
Ltd v Metronet BCV Ltd [2008] All ER (D) 208 TCC
The client successfully sought a ruling that it was
entitled to issue corrective action notices' under a
PPP contract for upgrading the London Underground. The
defendant contractors had argued that the issue of such notices
was limited to certain specified failures which did not cover
the client's actions.
Finola O'Farrell QC
John F Hunt
Demolition Ltd v ASME Engineering Ltd [2008] BLR 115
TCC
Already reported in Con LR. The case concerns the
preliminary hearing of two unrelated questions: namely, the
relationship between the insurance provisions in the JCT
Contract (1998 edition) and the existence of common law duties
of care and the question of reasonableness of a settlement
under the Biggins v Permanite
principle.
Jonathan Selby
Kajima UK Engineering Ltd v Underwriter
Insurance Co Ltd [2008] CILL 2567 TCC
The defendant insurance company had provided the
claimant main contractor with indemnity insurance during the
performance of a design and build contract for a block of
flats. Notification by the claimant was only effective in
respect of defects and damage to the works, during the period
of cover. The scope did not extend to defects revealed by later
investigations, since they could not be connected to those
within the period of cover.
Adrian Williamson QC
Reinwood Ltd v L
Brown & Sons Ltd [2008] UKHL 12; [2008] 08 EG 156
(CS)
The House of Lords considered the issue of whether
the cancellation of the certificate of non-completion under
Clause 24 (of the JCT 98) by the grant of an extension of time
had the effect that the employer could no longer justify a LAD
deduction. Upholding the decision of the Court of Appeal, the
House of Lords held that the employer's right to deduct
LADs was not lost by the grant of the extension of time even if
its effect was to cancel the certificate of non-completion. The
cancellation of the non-completion certificate did not have
retrospective effect and the employer was therefore entitled to
rely on that certificate.
John Marrin QC, Stephen Furst QC
London &
Regional (St. George's Court) Ltd v Ministry of
Defence [2008] EWHC 526 LAWTEL TCC
The case concerned preliminary issues in a dispute arising
from the refurbishment of offices owned by the Crown Estate and
let to the claimant, who had sub-let to the defendant
government ministry. The claimant had undertaken to do the
works and issues arose as to whether variations required by the
defendant had been certified by the claimant's
consultants as a binding determination of the
defendant's liability and whether the claimant had
suffered any recoverable loss and/or was entitled to pursue the
claim.
Paul Darling QC
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.
For further information on how our members can assist you, please contact the Senior Clerks, John Munton and Nick Child, in the first instance, on +44 (0) 20 7544 2600. They and their teams of Clerks will be pleased to advise you on the member of Keating Chambers appropriate to your requirements.
© KEATING CHAMBERS
