REUTERS | Yves Herman
REUTERS | Yves Herman

In recent months, we haven’t seen many challenges to adjudicator’s decisions based on allegations that the adjudicator breached the rules of natural justice, and so it came as a bit of a surprise last week to see two handed-down by the same judge on the same day!

Jefford J has dealt with these cases in her customary detailed manner,  leaving no stone unturned. My thoughts on RGB P&C Ltd v Victory House General Partner Ltd and JJ Rhatigan & Co (UK) Ltd v Rosemary Lodge Developments Ltd are as follows. Continue reading

REUTERS |

Build UK, a leading representative organisation for the construction industry, has published a non-binding recommendation on which contract terms its members should (as a minimum) refrain from using. The recommendation “seeks to form a new common ground between clients and the supply chain on contractual practice in the construction sector” with the key objectives being “to promote collaboration, encourage a fairer allocation of risk through the supply chain, and deliver better project outcomes”.

In this blog I look at each of Build UK’s recommendations and consider whether they represent a departure from current market practice, or a consolidation of the examples of best practice that we are already seeing clients and contractors adopting in the current market. Continue reading

REUTERS | Ilya Naymushin

Burning a Bridge

It is unusual for a court of first instance to decline to follow obiter dicta of the appellate courts. This tendency is particularly marked where that appellate court is the House of Lords, and even more so when the obiter dictum in question is not in direct conflict with any other statement of the law on the point at the appellate level.

However, in his recent decision in Thomas v Taylor Wimpey Developments Ltd and others [2019] EWHC 1134 (TCC), HHJ Keyser QC departed from the norm by concluding that the second of Lord Bridge’s qualifications, in Murphy v Brentwood DC [1991] AC 398, to the general principle that a builder does not owe a duty in tort in respect of latent defects in a building absent an assumption of responsibility, “does not represent the law”.  Continue reading

REUTERS | Bobby Yip

The Hong Kong High Court judgment in Maeda and China State v Bauer, handed down on 9 April 2019, deals with two issues that arise regularly in practice but are rarely the subject of judicial consideration.

The issues, in short, are:

  • Will a notice be valid where it has been given on the basis of one ground of dispute under the contract but the claimant succeeds on a different ground? (Notices Issue).
  • If work is to be valued using fair and reasonable rates, should the valuation be based on market rate or cost? (Valuation Issue).

Continue reading

REUTERS | Lucy Nicholson

It is common practice for parties in the construction industry to undertake work under a letter of intent before the contract is formally executed. This practice ensures that design can be undertaken, materials can be procured, the site can be prepared and, ultimately, work can begin notwithstanding ongoing contractual negotiations.

However, letters of intent often form the basis of disputes and their contractual status can be unclear. For example, letters of intent have been:

Uncertainty, and with it disagreement, is plainly likely when contractors perform work in anticipation of a final contract that is never formally executed. That was the case in RTS Flexible Systems v Molkerei, where the employer sent a letter of intent containing a draft contract. It also contained a “subject to contract” clause which stipulated that the terms within the letter of intent would not be binding unless executed by both parties, which it was not. The Supreme Court held that the parties had nevertheless entered into a binding agreement: on the evidence, the parties had agreed to waive the “subject to contract” requirement.

The recent case of Anchor 2020 v Midas Construction Ltd raised similar issues to RTS but will be of particular importance to the construction industry, not least because the contract in question was a JCT Design and Build Contract, 2011 Edition. Continue reading

REUTERS | Kim Hong-Ji

You often cut a lonely figure when acting as an adjudicator. It’s not like being part of a three-party arbitral tribunal, where you have someone to discuss issues with. I suspect it is the same for a judge. Sometimes it feels like the world is against you, no matter how hard you try. At least, I suspect that is how Fraser J felt on Thursday, 21 March, when he received the Post Office’s recusal application, asking him to recuse himself from the Post Office group litigation.

If you aren’t familiar with this case, then read on. Continue reading

REUTERS | Tim Wimborne

As construction disputes lawyers, we see our fair share of settlement agreements. And not just the traditional full and final settlements, but also one page final account settlements, and “line in the sand” agreements in which the parties seek to renegotiate elements of the contract while it is in progress. These “line in the sand” agreements seem to feature disproportionately in court judgments, and in this blog I will look at the reasons why this might be the case. Continue reading

REUTERS | David Gray

There is a robust policy of enforcing adjudicators’ decisions, and in not allowing that policy to be undermined simply because a party alleges fraud. However:

“Where, exceptionally, it is properly arguable on credible evidence that an adjudication decision was itself procured by fraud that was reasonably discovered after the adjudication, the court is unlikely to grant summary judgment.”

So said Pepperall J in PBS Energo AS v Bester Generacion UK Ltd, which proved to be one such exceptional case.

PBS had obtained an adjudicator’s decision in its favour for £1.7 million plus interest, but Bester successfully resisted enforcement on the basis of PBS’ fraud in procuring the adjudicator’s decision. Continue reading

REUTERS | Eric Gaillard

Fraud, glorious fraud?

Once adjudication had found its feet in the early noughties, there was said to be only two ways for a responding party to avoid the consequences of an adjudicator’s decision. The first was to demonstrate that the adjudicator did not have the necessary jurisdiction, and the second was to demonstrate that they had made a material breach of the rules of natural justice. But then some inventive team of lawyers, no doubt reeling at the perceived injustice of coming second in an adjudication, came up with a third option: fraud. It might be taking it a little far, but I have visions of that team sat around singing the opening song from Oliver! (but replacing “food” with “fraud”) when they realised that fraud could be added to their arsenal of weapons to avoid enforcement!

The fact that fraud has taken some time to develop as a means of resisting enforcement is demonstrated by the fact that the first edition of Coulson on Construction Adjudication, published in 2007, made no reference to it. The first mention of fraud was in the second edition (published in 2011), and this commentary has steadily grown in the third and fourth editions.

TCC enforcement cases involving fraud now seem to come along quite frequently. For example, last month Matt blogged about Alexander Nissen QC’s judgment in BM Services Inc Ltd v Greyline Builders Ltd. I make no apology for the fact that I’m going to discuss another fraud case this week, namely Jefford J’s judgment in Grandlane Developments Ltd v Skymist Holdings Ltd, because this is such an important area. Continue reading

REUTERS | Peter Cziborra

Imagine the scene: you are the responding party to an adjudication and right at the outset you spot that the adjudicator has been incorrectly appointed and does not have jurisdiction. You try to call a halt to the proceedings. The claimant refuses. Surely you can get an injunction? Why go to all the trouble, expense and effort of an adjudication, for which you won’t be able to recover your costs, only to incur further legal costs at enforcement proceedings, at which you are eventually vindicated? Wouldn’t it make more sense to call time on the adjudication and start again?

In Billingford Holdings Ltd & BFL Trade Ltd v SMC Building Solutions Ltd and another, Fraser J refused to grant an injunction. This blog post considers whether this approach can be reconciled with section 37 of the Senior Courts Act 1981, which provides that the court may grant an injunction in all cases in which it appears to the court to be just and convenient to do so and the overriding objective of saving expense. Continue reading