Monthly Archives: February 2016

REUTERS | Max Whittaker
February 29, 2016

February 2016 digest: payment, adjudication and Brexit

The Old Farmer’s Almanac:

“Groundhog found fog. New snows and blue toes. Fine and dandy for Valentine candy. Snow spittin’; if you’re not mitten-smitten, you’ll be frostbitten! By jing-y feels spring-y.”

Although February is the shortest month, it often feels like one of the longest with its seemingly endless cold, grey days. Spring will (hopefully) soon be here and, while we look forward to warmer days, we can read about events later in the year, such as the EU referendum (or Brexit) in June.

After a quiet January, the TCC handed down several interesting judgments this month, including two dealing with payment. One looked at what happens when a payment schedule expires but the work is on-going (and PC has not been achieved), which both Brenna Conroy and Jonathan Cope discussed. The other considered non-compliant payment terms and the need to imply a term (but not from the Scheme for Construction Contracts 1998). Continue reading →

REUTERS | David Bebber
February 24, 2016

Is the civil courts structure review the end for the TCC?

It’s just possible that, what with keeping up on the recent spate of adjudication enforcement decisions, and wondering whether Brexit would mean that English clubs can’t compete in Europe, you might have missed the fact that Briggs LJ is in the middle of conducting a comprehensive review of the civil courts structure (and the interim report is available online).

If you were diligent enough to have spotted this, you might nevertheless have thought it was mainly about introducing an “online court” for relatively modest claims and so not something a successful construction practitioner like yourself needed to worry about. However, hidden away on pages 100-102 (in the section on “The Future of the Divisions”) is the suggestion that the final report will consider the merger of the various Rolls Building divisions into one section, thereby potentially removing the Technology and Construction Court (TCC) as a distinct unit in the manner we currently know it. Continue reading →

REUTERS | Bob Strong
February 24, 2016

What lies beneath: a reminder of some key implied terms in construction contracts

Parties are often so concerned about getting the express terms of the contract right that they forget about implied terms.

Following the Supreme Court decision in Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd, this blog looks at some of the key statutory and common law terms which may be implied into construction contracts. It concludes with some practical tips to bear in mind when navigating this tricky field. Continue reading →

REUTERS | Kim Kyung-Hoon
February 23, 2016

Beware, you may not be entitled to interim payments right up until practical completion

Unlike some meetings held during the course of construction projects, pre-start meetings can be quite refreshing. There is normally an air of positivity and of everyone wanting to work together to make the project a success (the bitterness of disputes has not yet set in).

I want you to imagine that such a pre-start meeting is taking place for a 12-month project, with Jack representing the main contractor and Jill the employer. They have agreed that there will be periodic monthly payments and, thanks to the Construction Act 1996’s complicated payment provisions, they have agreed a payment schedule recording for each of the 12 months the dates when Jack’s applications for payment can made, the due date for payment and when Jill’s payment notice and any pay less notice should be served.

I now want you to imagine that you walk into the meeting at this point and say:

“What if Jack is delayed by an event that entitles him to an extension of time, or possibly his own risk event. Will the monthly payments continue past the dates agreed in your schedule?”

I’m willing to take a guess that 9 times out of 10, both Jack and Jill would say, “of course, the monthly payments will continue up to completion of the works”. However, while that be may Jack and Jill’s view, Stuart-Smith J’s judgment in Grove Developments v Balfour Beatty has shown us that this won’t necessarily be the case under the Construction Act 1996. Continue reading →

REUTERS | Mark Blinch
February 19, 2016

Has the same dispute again been referred to adjudication?

In two recent decisions, the Court of Appeal has reconsidered the question of whether the dispute in successive adjudications is “the same or substantially the same” dispute. The answer to the question is important because paragraph 9(2) of the Scheme for Construction Contracts 1998 provides that if the second dispute is the same or substantially the same as the previous dispute, the adjudicator must resign. Therefore, the issue has arisen in a number of reported cases. Continue reading →

REUTERS | Juan Carlos Ulate
February 17, 2016

Practical guidance on unsigned deeds and agreements to be formalised

This post considers two independent, albeit related, issues:

  • What if a deed has been signed and executed by only one party?
  • In what circumstances will there be a valid contract where the parties envisage execution of a further document in respect of the terms of an agreement, which document is not in fact subsequently executed?

Continue reading →

REUTERS | Mike Blake
February 16, 2016

“Who are ya?” (or meetings with the adjudicator)

I found the judgment in John Sisk v Duro Felguera an interesting read, particularly the adjudicator’s use of a third party (Mr Hutchinson) to assist him in the adjudication. It made me think about how I’d have dealt with the situation, if I had been in the adjudicator’s position and had wanted to use the services of a third party. (Incidentally, it also reminded me of the “phoning a friend” case a few years ago, although the outcome then was entirely different.) Continue reading →

REUTERS | Carlos Barria
February 11, 2016

Special foundations and the Party Wall Act: the end of the “banker’s bunker”?

On 25 January 2016, the Evening Standard carried an article headed, “City boss in ‘Wild West’ mega-basement battle“. This described the latest round in the long running battle between Mr and Mrs Fairholme and two sets of their neighbours, resulting from the construction of a new basement beneath their substantial semi-detached house in Kensington. The angry neighbours are the owner-occupiers of the other semi-detached house, and the owners of flats in a nearby block that shares a garden wall with the Fairholmes.

This note describes an earlier part of the confrontation, resolved in the County Court at Central London in September last year. It turned on whether the method of construction of the walls and floor of the new basement contravened the Party Wall etc. Act 1996 (PWA 1996). Continue reading →

REUTERS | Toru Hanai
February 9, 2016

With friends like these… Burgess v Lejonvarn: a parable for construction professionals

A friend phones you for legal advice. He is in the middle of home extension works and while they started off well, the works are now running well behind schedule and the standard of workmanship is shoddy. What do you do? Hang up in a panic or confidently recite Supreme Court judgments and reassure them that you are happy to help out and advise them for free. They are a friend after all.

I found myself in a not too dissimilar position shortly before Christmas. My mother called about a wood-burning stove she had installed in her living room. It had been fitted poorly and was leaking onto the carpet. Before I knew it, I found myself reeling off the various causes of action she could bring in contract, tort and (more exotically) unjust enrichment, citing the pertinent provisions of relevant legislation with bombast and aplomb. Had I read Burgess v Lejonvarn at that stage I would have exercised a little more caution. Continue reading →

REUTERS | Vasily Fedosenko
February 9, 2016

Pay less notices under the Construction Act 1996

As I predicted in my blog post two weeks ago, the TCC has now been addressed on the argument that an out of time payment notice can stand as a valid pay less notice under the provisions of the Construction Act 1996.

In Grove Developments Ltd v Balfour Beatty Regional Construction Ltd, Grove sought (in the alternative), a declaration that:

“…if the last date for service of a Pay Less Notice was earlier than 15 September 2015, GDL’s Payment Certificate constituted a valid Pay Less Notice.”

As I discussed previously, this submission was endorsed by Akenhead J’s finding in Henia v Beck. Continue reading →

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