REUTERS | David Bebber

January to June 2011, a half-year case review

Solon (630-555 BC), Diogenes Laertius, Lives of the Emminent Philosphers:

“Laws are like spiders’ webs: if some poor creature comes up against them, it is caught; but a bigger one can break through and get away.”

The first half of 2011 has seen a number of important decisions affecting construction and engineering practitioners.

Notable decisions include:

  • Axa Sun Life Services plc v Campbell Martin Ltd.
  • BDW Trading Ltd (t/a Barratt North London) v JM Rowe (Investments) Ltd.
  • Brent London Borough Council v Risk Management Partners Ltd.
  • Carillion JM Ltd v Phi Group Ltd.
  • Conarken Group Ltd v Network Rail.
  • Extra MSA Services Cobham Ltd v Accor UK Economy Hotels Ltd.
  • Farstad Supply AS v Enviroco Ltd.
  • Fernhill Properties (Northern Ireland) Ltd v Mulgrew.
  • Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd.
  • Jenson and another v Faux.
  • Jones v Kaney.
  • Luton Borough Council and others v Secretary of State for Education.
  • Meritz Fire and Marine Insurance Co Ltd v Jan de Nul NV.
  • Mouchel Ltd v Van Oord (UK) Ltd.
  • Profile Projects Ltd v Elmwood (Glasgow) Ltd.
  • Robinson v Jones.
  • Simon Carves Ltd v Ensus UK Ltd.
  • Williams and others v Redcard Ltd and others.

Axa Sun Life Services plc v Campbell Martin Ltd, where the Court of Appeal considered whether an entire agreement clause was effective to exclude claims for misrepresentation, breach of collateral warranty and/or implied terms. The court also considered UCTA’s application to entire agreement statements, set-off clauses and conclusive evidence clauses.

BDW Trading Ltd (t/a Barratt North London) v JM Rowe (Investments) Ltd, where the Court of Appeal considered the extent to which the parties had excluded or modified the presumption that a party cannot rely on its own breach.

Brent London Borough Council v Risk Management Partners Ltd, where the Supreme Court clarified the extent to which local authorities can co-operate in order to obtain services cost-effectively, without falling foul of the procurement rules (the Teckal exemption applied to the award of contracts by London local authorities for primary insurance services).

Carillion JM Ltd v Phi Group Ltd, where the TCC considered the meaning of “same damage” and “just and equitable” contribution under the Civil Liability (Contribution) Act 1978 and held that a specialist design and build sub-contractor was liable for the same damage as a professional consultant engineer during pre-construction works, but that once work began, the sub-contractor had greater responsibility for the damages caused.

Conarken Group Ltd v Network Rail, where the Court of Appeal considered the recoverability of economic loss resulting from negligent damage to property.

Extra MSA Services Cobham Ltd v Accor UK Economy Hotels Ltd, where the High Court held that a developer’s right to terminate an agreement for lease to construct a hotel was conditional on the developer not having brought about its right to terminate by its own breaches of any clause in the agreement.

Farstad Supply AS v Enviroco Ltd, where the Supreme Court upheld the Court of Appeal’s decision on the meaning of “subsidiary”.

Fernhill Properties (Northern Ireland) Ltd v Mulgrew, where the Northern Irish High Court held that a 15% interest rate in a contract was an unenforceable penalty.

Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd, where the High Court held that the sequence of e-mail negotiations and related documents could be pieced together in such a way that it was arguable a guarantee existed.

Jenson and another v Faux, where the Court of Appeal confirmed that section 1 of the Defective Premises Act 1972 (DPA 1972) only applies to new dwellings and not to substantial works that remodelled and significantly extended parts of a house.

Jones v Kaney, where the Supreme Court held that an expert’s immunity from suit should be abolished.

Luton Borough Council and others v Secretary of State for Education, where the High Court (in judicial review proceedings) held the government’s decision to end the Building Schools for the Future (BSF) programme was an abuse of power.

Meritz Fire and Marine Insurance Co Ltd v Jan de Nul NV, where the High Court ruled that advance payment guarantees were performance bonds on the grounds they were irrevocable and unconditional, triggered by a demand on presentation of certain documents and subject to the ICC’s Uniform Rules for Demand Guarantees.

Mouchel Ltd v Van Oord (UK) Ltd, where the TCC held a third party sub-contractor liable for the same damage as a professional consultant, in relation to the defects in the offshore elements of a power station’s cooling system. The TCC considered the meaning of “same damage” and “just and equitable” contribution under the Civil Liability (Contribution) Act 1978.

Profile Projects Ltd v Elmwood (Glasgow) Ltd, where the Scottish Court of Session distinguished Yuanda v WW Gear and followed the earlier decision of Bridgeway v Tolent. The court also held that, if parts of an adjudication clause failed, not all of the adjudication provisions of the Scheme for Construction Contracts (Scotland) 1998 were implied into the parties’ contract.

Robinson v Jones, where the Court of Appeal upheld the first instance decision that, while the builder could hold concurrent duties in contract and tort to the homeowner not to cause economic loss, on the facts, the parties had excluded the tortious duty in their contract.

Simon Carves Ltd v Ensus UK Ltd, where the TCC granted an injunction restraining a beneficiary from seeking payment under an on demand bond. The judgment concerns the relatively rare situation where the party seeking payment was allegedly in breach of the terms of the underlying contract for which the bond was provided as security.

Williams v Redcard Ltd, where the Court of Appeal held that a document had been properly executed by a company under section 44 of the Companies Act 2006 where it had been signed once by each of two authorised signatories of the company, although each was also a party to the agreement in a personal capacity and the document was not expressed to be signed “by or on behalf of” the company.

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