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January to March 2016 case review for construction practitioners

Charles Dickens, Oliver Twist:

“‘If the law supposes that,’ said Mr. Bumble, squeezing his hat emphatically in both hands, ‘the law is a ass – a idiot. If that’s the eye of the law, the law is a bachelor; and the worst I wish the law is, that his eye may be opened by experience – by experience.'”

During the first three months of 2016, we have seen a number of interesting decisions affecting construction and engineering practitioners.

Notable adjudication cases from January to March 2016

In Brown v Complete Buildings Solutions Ltd, the Court of Appeal dismissed an appeal against adjudication enforcement, confirming that the second adjudication did not concern the “same or substantially the same” dispute.

In Deluxe Art & Theme Ltd v Beck Interiors Ltd, Coulson J held that under paragraph 8(1) of the Scheme for Construction Contracts 1998, an adjudicator cannot adjudicate on more than one dispute at the same time without the parties’ consent.

In John Sisk & Son Ltd v Duro Felguera UK Ltd, Edwards-Stuart J held that the adjudicator had not breached the rules of natural justice and had not wrongfully delegated parts of his decision-making role to a third party. The court also dealt with allegations of predetermination.

In Penten Group Ltd v Spartafield Ltd, Coulson J declared that the parties were bound by the first adjudicator’s decision, which meant their contract was governed by the terms of a letter of intent. The court also made it clear that, in an ordinary case, a dispute about contract terms and a dispute about claims under those terms are all part of one dispute.

In RMC Building & Civil Engineering Ltd v UK Construction Ltd, Edwards-Stuart J enforced an adjudicator’s decision and refused a stay of enforcement as no manifest injustice would be caused to the paying party.

Other notable cases from January to March 2016

In Airport Industrial GP Ltd v Heathrow Airport Ltd, Morgan J in the Chancery Division ordered specific performance of contractual obligations to carry out building works before the date specified in the contract for the works to be completed.

In Burgess v Lejonvarn, Alexander Nissen QC (sitting as a deputy High Court judge), found a professional consultant owed a duty of care in tort for gratuitous services she had performed for her friends.

In C&S Associates UK Ltd v Enterprise Insurance Company plc, Males J in the Commercial Court allowed a party to terminate a contract even though it had not initially raised the grounds it subsequently terminated on.

In Cofely Ltd v Bingham, Hamblen J in the Commercial Court granted an application to remove an arbitrator (under section 24 of the Arbitration Act 1996), finding grounds that raised the real possibility of apparent bias.

In Commercial Management (Investments) Ltd v Mitchell Design and Construct Ltd, Edwards-Stuart J considered the degree to which standard terms of business can be negotiated or dissected while remaining subject to UCTA’s reasonableness requirement.

In Grove Developments Ltd v Balfour Beatty Regional Construction Ltd, Stuart-Smith J held that the contractor had no contractual right to make an interim application while the works were ongoing but after an agreed payment schedule had expired.

In J Murphy & Sons Ltd v Beckton Energy Ltd, Carr J held that, despite not following the employer’s claims procedure, the employer was entitled to recover liquidated damages from the contractor under a contract based on the FIDIC Yellow Book.

In Jawaby Property Investment Ltd v The Interiors Group Ltd, Carr J held that a building contractor’s valuation did not constitute a valid interim application in accordance with the building contract.

In Kier Construction Ltd v WM Saunders Partnership LLP, Lord Woolman in the Outer House of the Court of Session ordered a professional consultant to provide a collateral warranty in favour of the employer on a construction project.

In Larkfleet Ltd v Allison Homes Eastern Ltd, Fraser J held that a contractor had accepted responsibility for an employer’s liability under an NHBC new home warranty, with the cause of action accruing when the contractor refused or failed to accept that responsibility.

In Lukoil Mid-East Ltd v Barclays Bank plc, Stuart-Smith J granted summary judgment, finding that the claimant’s request for payment under an on demand bond was valid.

In Manor Asset Ltd v Demolition Services Ltd, Edwards-Stuart J found an implied term in a building contract’s payment provisions that allowed it to comply with the Construction Act 1996.

In Mohamud v WM Morrison Supermarkets plc, the Supreme Court held a supermarket vicariously liable for an employee’s unprovoked violent assault on a customer. It also affirmed the “close connection” test.

In Narandas-Girdhar v Bradstock, the Court of Appeal approved the test for admissibility of deleted words as an aid to construction.

In South Lanarkshire Council v Coface SA, Lord Drummond Young in the Inner House of the Court of Session upheld a first instance finding that a beneficiary’s request for payment under an on demand performance bond was valid.

Further information

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