Monthly Archives: October 2015

REUTERS | Mohamed Nureldin Abdallah
October 31, 2015

October 2015 digest: seven year itch!

Ernest Hemingway:

“For a long time now I have tried simply to write the best I can. Sometimes I have good luck and write better than I can.”

Practical Law Construction turned seven this month. Over the last seven years, just like Ernest, we have done the best we can to keep our subscribers abreast of developments in the world of construction law. After seven years, we hope you feel that you can’t live without us. Certainly, we couldn’t exist without you!

As we are clearly wedded to our subscribers, according to Wikipedia, after seven years the traditional wedding anniversary gift in the UK is woollen (wool or copper in the USA). Apparently the Chicago Public Library suggests a modern gift list of desk sets or pen and pencil sets. That may seem apt for a team that writes for a living!

Continue reading →

REUTERS | Yuya Shino
October 30, 2015

It means what it says on the tin: contract interpretation in a post-Arnold v Britton world

For a number of years it seemed as if the law had gone soft in its old age. It began by telling us that, when construing the terms of a contract, we shouldn’t allow the literal words to mask the true objective intention. As Lord Steyn said (in Sirius International v FAI):

“[T]he tyrant Temures promised the garrison of Sebastia that no blood would be shed if they surrendered to him. They surrendered. He shed no blood. He buried them all alive. This is literalism. If possible it should be resisted in the interpretative process.”

And before we knew it, by relying on such decisions as Chartbrook v Persimmon and then Rainy Sky v Kookmin, some were saying that the law now allowed you to read in to the contract whatever made the most commercial sense.

Traditionalists therefore rejoiced at the perceived return to orthodoxy provided by Arnold v Britton. Continue reading →

REUTERS | Toby Melville
October 29, 2015

Is the winding-up route a dead letter for non-payment?

The intention behind the 1996 construction legislation was clear with regard to payment obligations: there should no longer be any room for groundless refusal to pay. The system of notices that the legislation introduced was designed to ensure that if no notice to pay less was given by the end of the prescribed period, then the time for payment had arrived. If the payment due could properly be regarded as an undisputed debt, then there seemed to be no reason why a statutory demand should not be served. If payment was still not forthcoming, then presentation of a winding-up petition was the next step.

This procedure did not find favour. Instead, we have seen adjudication and adjudication enforcement proceedings as the preferred route to getting paid.

It was with this in mind that I read with interest the Court of Appeal’s judgment in Wilson and Sharp Investments Ltd v Harbour View Developments Ltd. Continue reading →

REUTERS | Lucas Jackson
October 27, 2015

What to reasonably expect from your adjudicator’s decision (part 3)

Deciding the dispute

Earlier this year, I wrote about the proposed Hong Kong Security of Payment Legislation.

Recently I have been fortunate enough to travel to this vibrant city to talk to some budding adjudicators about decision writing. Part of my workshop was about the process that an adjudicator might follow in reaching his decision. I thought this topic might be suitable for the third and final part of my series of blogs on what you can reasonably expect from your adjudicator’s decision. Continue reading →

REUTERS | Thomas Peter
October 21, 2015

Supervising the engineer under a FIDIC contract

Beware of clauses which seek to limit the engineer’s authority as they may be more trouble than they’re worth.

Under most of the FIDIC forms, and a number of other construction and engineering contracts, many of the key obligations fall on someone who is not a party to the contract. In the case of FIDIC, this person is the engineer. In other contracts, this person is commonly a project manager, development manager or construction manager.

Enshrined in most legal systems is the principle that contracting parties cannot impose obligations on a non-party. However construction contracts do, and have done for generations. Construction law provides a framework for this by using various concepts such as agency and duties and standards of conduct which are imposed by the law of tort in England and Wales. In Gulf legal systems such as the UAE, rules concerning “wrongful acts” and also concepts of third party supervision recognised in the Civil Codes achieve the same aim. Of course, the engineer’s obligations most naturally derive from the terms of the contract between the employer and engineer. Continue reading →

REUTERS | Anindito Mukherjee
October 20, 2015

Why didn’t the contractor just adjudicate its payment dispute?

One thing that puzzled me when I was reading Gloster LJ’s judgment in Wilson and Sharp Investments v Harbour View Developments is why the contractor repeatedly threatened winding up proceedings, rather than taking the employer’s lack of payment to adjudication.

We all know how that scenario should have played out and, who knows, it may have prevented yet another construction casualty.

If you are unfamiliar with the case, read on. Continue reading →

REUTERS | Thomas Peter
October 16, 2015

Estoppel by convention: a shield or a sword?

Earlier this year, Akenhead J handed down judgment in Mears Ltd v Shoreline Housing Partnership Ltd, the last in a trilogy of cases of the same name dealing with, among other things, the nature and scope of estoppel by convention.

The case makes essential reading for the construction practitioner, not least because of its discussion of the familiar, but thorny, principle that an estoppel by convention cannot found an independent cause of action. In other words, it is to be used “as a shield and not as a sword”. Continue reading →

REUTERS | Yves Herman
October 14, 2015

Litigating with a kilt on

Last time we looked at the key differences between English and Scots law when dealing with a contract that is subject to Scots Law.

This time we turn our attention to advising on a dispute that is governed by the Scottish courts. You won’t find many court practitioners or advocates wearing a kilt in the Scottish courts (not least because it is far too cold for that most of the time!), but you may well be bamboozled by the different terminology and rules.

Let’s demystify some of them.

Continue reading →

REUTERS | John Javellana
October 13, 2015

When property developments go wrong

Last year, I wrote about Bank of Ireland v Faithful & Gould which, to the best of my knowledge, was the first time the TCC had considered the role of a project monitoring surveyor (PMS). That case did rather turn on its facts though, and most of us probably learnt more about vesting certificates, than the role of the PMS.

However, fear not, because Edwards-Stuart J has produced a monster judgment in Lloyds Bank v McBains Cooper, which has some real gems when it comes to what surveyors should, and most definitely shouldn’t, do when acting as a PMS. Continue reading →

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