REUTERS | Paulo Whitaker

January to June 2012, a half year case review

Sir Edward Coke, Institutes: Commentary upon Littleton:

“Reason is the life of the law, nay the common law itself is nothing else but reason…  The law, which is the perfection of reason.”

The first half of 2012 has seen a number of important decisions affecting construction and engineering practitioners:

  • ACD (Landscape Architects) Ltd v Overall.
  • Air Transworld Ltd v Bombardier Inc.
  • Barbudev v Eurocom Cable Management Bulgaria EOOD.
  • Barr v Biffa Waste Services Ltd.
  • Chandler v Cape plc.
  • Compass Group UK and Ireland Ltd (trading as Medirest) v Mid Essex Hospital Services NHS Trust.
  • Employers’ Liability Insurance “Trigger” Litigation.
  • Freetown Ltd v Assethold Ltd.
  • Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd.
  • Highlands and Islands Authority Ltd v Shetland Islands Council.
  • Jet2.com Ltd v Blackpool Airport Ltd.
  • Leander Construction Ltd v Mulalley and Company.
  • Mason and others v Mills & Reeve.
  • Milton Keynes Borough Council v Nulty.
  • Point West London Ltd v Mivan Ltd.
  • Progress Bulk Carriers Ltd v Tube City IMS LLC.
  • R (Gresty and another) v Knowsley Metropolitan Borough Council.
  • Shepherd Construction Ltd v Pinsent Masons LLP.
  • Sweett (UK) Ltd v Michael Wight Homes Ltd.
  • Walter Lilly & Company Ltd v Mackay.
  • West Country Renovations Ltd v McDowell.
  • Working Environments Ltd v Greencoat Construction Ltd.
  • WW Gear Construction Ltd v McGee Group Ltd.

In ACD (Landscape Architects) Ltd v Overall, Akenhead J in the TCC considered the extent to which expert evidence is necessary to plead professional negligence. He commented that a party pleading professional negligence may serve a statement of case containing a statement of truth without having first obtained expert evidence. Further, in some cases, obtaining expert evidence at a very early stage may be disproportionate in terms of costs.

In Air Transworld Ltd v Bombardier Inc, the Commercial Court distinguished well established authorities to rule that an exclusion clause that did not expressly refer to the word “conditions” was nevertheless successful to exclude the conditions implied into a sale of goods under the Sale of Goods Act 1979.

In Barbudev v Eurocom Cable Management Bulgaria EOOD, the Court of Appeal confirmed that a side letter was an unenforceable agreement to agree, but found that the side letter clearly evidenced a (failed) intention to create legal relations.

In Barr v Biffa Waste Services Ltd, the Court of Appeal held, among other things, that it is not a defence to a claim for common law private nuisance to show that waste disposal activities giving rise to a nuisance were carried out in accordance with a landfill permit and without negligence.

In Chandler v Cape plc, the Court of Appeal held that a parent company owed a direct duty of care to the employee of a subsidiary who had contracted asbestosis through exposure to asbestos dust.

In Compass Group UK and Ireland Ltd (trading as Medirest) v Mid Essex Hospital Services NHS Trust, the High Court found that a duty to act in good faith contained in an outsourcing agreement was breached. The court favoured a broad interpretation of the contractual duty because the parties had entered a long-term contract, the performance of which required continuous and detailed co-operation between the parties at a number of levels if it was to work smoothly.

In Employers’ Liability Insurance “Trigger” Litigation, the Supreme Court held that mesothelioma is “sustained” or “contracted” at the moment when the employee is wrongfully exposed to asbestos, not at the time the disease manifests itself.

In Freetown Ltd v Assethold Ltd, the High Court held that the 14-day time for appeal under section 10(17) of the Party Wall etc. Act 1996 (PWA 1996) starts to run from service of the party wall award which, if served by post, means when the award is posted, not when it is received by the parties.

In Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd, the Court of Appeal confirmed that an enforceable guarantee can be created by a series of e-mails authenticated by the online signature of the guarantor.

In Highlands and Islands Authority Ltd v Shetland Islands Council, Lord Menzies in the Outer House of the Court of Session held that an adjudicator breached the rules of natural justice by asking counsel for confirmation of a legal point. The court refused to sever the adjudicator’s decision. The court also held that serving a notice of intention to serve an arbitration notice did not constitute approbation of the adjudicator’s decision.

In Jet2.com Ltd v Blackpool Airport Ltd, the Court of Appeal considered the legal effect of clauses calling for the exercise of “best endeavours” and “all reasonable endeavours”.

In Leander Construction Ltd v Mulalley and Company, Coulson J in the TCC set out the law on implied terms requiring a party to proceed regularly and diligently with the works. The court also gave obiter comments on section 108A of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996) (as amended) and the form of a withholding notice. The judgment also demonstrates the tactical use that parties may make of a declaratory relief application under CPR Part 8.

In Mason and others v Mills & Reeve, the Court of Appeal held that it was not unreasonable for the defendant to refuse to mediate.

In Milton Keynes Borough Council v Nulty, Edwards-Stuart J in the TCC considered how a party discharges its burden of proof in claims where there is no single clear factual cause of the damage.

In Point West London Ltd v Mivan Ltd, Ramsey J in the TCC refused to grant the claimant’s application for a declaration, finding that the parties’ settlement agreement covered both the outstanding payment issues and also the patent defects in the contractor’s works.

In Progress Bulk Carriers Ltd v Tube City IMS LLC, the Commercial Court held that a party’s lawful but unethical actions, following its own repudiatory breach, could be economic duress.

In R (Gresty and another) v Knowsley Metropolitan Borough Council, the Administrative Court refused homeowners permission to apply for judicial review against a local authority. The homeowners alleged that the local authority had breached Article 8 of the European Convention on Human Rights (the right to respect for private and family life) by failing to spot defective construction works when carrying out its building control function under the Building Regulations.

In Shepherd Construction Ltd v Pinsent Masons LLP, Akenhead J in the TCC struck out parts of a main contractor’s claim, which alleged that its series of instructions to the defendant solicitors created a single contract that required the solicitors to keep previous advice under review.

In Sweett (UK) Ltd v Michael Wight Homes Ltd, the Exeter County Court at Plymouth held that a professional consultant, acting as a employer’s agent, did not have an absolute obligation to procure a performance bond from the contractor in favour of the employer.

In Walter Lilly & Company Ltd v Mackay, Akenhead J in the TCC held that legal professional or legal advice privilege does not attach to documents generated by a claims consultant.

In West Country Renovations Ltd v McDowell, Akenhead J in the TCC issued guidance that claims valued at less than £250,000 should be issued in county courts or high courts outside London that have designated TCC judges. Such claims should not routinely be issued in the TCC in the High Court in London. The guidance also provides a non-exhaustive list of exceptions to this rule (including adjudication enforcement and Part 8 claims).

In Working Environments Ltd v Greencoat Construction Ltd, Akenhead J in the TCC held that not all the issues referred to the adjudicator had crystallised into a dispute at the time of the referring party’s notice of adjudication. He severed those elements from the adjudicator’s decision, enforcing the remainder.

In WW Gear Construction Ltd v McGee Group Ltd, Edwards-Stuart J in the TCC refused to grant a declaration about the meaning of a contract clause in circumstances where an adjudication was ongoing and the parties had not agreed to stay the adjudication pending the outcome of the application for a declaration.

If you are interested in seeing what’s in store for the next six months, see Articles:

For details of the notable decisions from 2011, see Blog posts:

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