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July to December 2010, a half-year case review

Plato (427 BC – 347 BC), Dialogues, Phaedo:

“The partisan, when he is engaged in a dispute, cares nothing about the rights of the question, but is anxious only to convince his hearers of his own assertions.”

In July, we reported on the notable decisions from the first half of 2010. The second half of the year has also seen a number of important decisions affecting construction and engineering practitioners:

  • City Inn Ltd v Shepherd Construction Ltd.
  • Chubb Fire Ltd v Vicar Of Spalding.
  • Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission.
  • HKRUK II (CHC) Ltd v Heaney.
  • Atwal and another v Rochester.
  • Giedo van der Garde and another v Force India Formula One Team Ltd.
  • Dhamija and another v Sunningdale Joineries Ltd and others.
  • Cooperative Group Ltd v John Allen Associates Ltd.
  • Oceanbulk Shipping & Trading SA v TMT Asia Limited and others.
  • Indigo Services (UK) Limited v The Colchester Institute Corporation.
  • McGuinness v Norwich and Peterborough Building Society.
  • Nurdin Jivraj v Sadruddin Hashwani

City Inn Ltd v Shepherd Construction Ltd, where the Inner House, Scottish Court of Session, rejected the employer’s grounds of appeal against the Lord Ordinary’s judgment on the operation of an extension of time clause and the impact of various delay events.

The judgment provoked discussion about the Lord Ordinary’s rejection of detailed critical path analysis in favour of a more practical assessment of the impact of delay events, together with an “apportionment” exercise where there was no “dominant cause” of delay. (The case is also interesting for its discussion of a bespoke provision, which City Inn argued barred Shepherd from obtaining any extension of time under the law of waiver).

Chubb Fire Ltd v Vicar Of Spalding, where the Court of Appeal held that if the judge at first instance had properly considered the evidence, he would have been bound to conclude that, even if warned, the church would have installed the extinguisher. Therefore, a failure to warn could not have been causative of the damage. The court’s remarks on intervening events provide an interesting indication as to how the courts might approach this issue.

Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission, where the European Court of Justice (ECJ) upheld a General Court judgment denying the application of legal professional privilege to communications with in-house lawyers, in the context of a competition investigation by the European Commission.

The judgment is a reminder that, due to their economic dependence and the close ties with their employers, in-house lawyers do not enjoy a level of professional independence comparable to that of an external lawyer. The ECJ confirmed the existing position that legal professional privilege does not cover exchanges within a company or corporate group with in-house lawyers.

HKRUK II (CHC) Ltd v Heaney, where the High Court awarded an injunction against a developer who infringed rights of light to a neighbouring commercial property, despite the offending development having been completed. The decision throws into question the accepted view that it is difficult to obtain an injunction in relation to commercial buildings, particularly if the development has already been completed.

Atwal and another v Rochester, where the TCC held that a construction contract was capable of being a personal service contract and was frustrated when the contractor was seriously ill and unable to complete the job.

Giedo v Force India, where the court considered whether the claimants were entitled to restitution or, alternatively, damages for breach of contract where they were unable to prove financial loss. It also considered whether a non-binding pre-contract “gentlemen’s agreement” was admissible for the purposes of interpreting the contract.

Dhamija and another v Sunningdale Joineries Ltd and others, where the TCC confirmed that a quantity surveyor must act with reasonable skill and care when valuing works for the purposes of interim certificates, but refused to go further and imply a positive obligation on the quantity surveyor to not value work that was obviously defective.

Cooperative Group Ltd v John Allen Associates Ltd, where the TCC considered when a professional consultant can rely on specialist advice to discharge its responsibilities under a professional appointment or collateral warranty. The simple question in most situations is whether the professional consultant acted reasonably in relying on the specialist advice.

Ramsey J’s judgment also clarified the extent to which one party can rely on expert evidence produced for a party that is no longer involved in proceedings (for example, where a Part 20 claim is settled during the trial, but the main claim continues).

Oceanbulk Shipping & Trading SA v TMT Asia Limited and others, where the Supreme Court unanimously overturned the Court of Appeal, holding that communications during without prejudice negotiations, which form part of the factual matrix or surrounding circumstances are, in principle, admissible when construing a settlement agreement that results from those negotiations.

Indigo Services (UK) Limited v The Colchester Institute Corporation, where, for the first time, the High Court lifted the automatic suspension that prevents a contracting authority from entering into a contract with its chosen supplier, following the initiation of proceedings by an unsuccessful tenderer. The court treated the application as if it was the disappointed tenderer’s injunction application and applied the standard American Cyanamid test.

McGuinness v Norwich and Peterborough Building Society, where the High Court considered whether the terms of a guarantee created a debt obligation on the part of the guarantor or a liability in damages.

The one that got away

Our last half-yearly review omitted to mention Nurdin Jivraj v Sadruddin Hashwani, a decision which prompted considerable comment, including blogs from Richard Power and Steve Abraham. It has been reported that the decision is being appealed.

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