REUTERS | Mike Segar

July to December 2011, a half-year case review

Charles Dickens, Oliver Twist:

“‘If the law supposes that,’ said Mr Bumble… ‘the law is a ass – a idiot.'”:

The second half of 2011 has seen a number of important decisions affecting construction and engineering practitioners, including:

  • Bibby Financial Services v Magson.
  • Carillion Utility v SP Power Systems.
  • Costello v MacDonald.
  • Daventry District Council v Daventry & District Housing.
  • Fenice Investments v Jerram Falkus.
  • Green v Eadie.
  • Hackney Empire v Aviva Insurance UK.
  • Harrison v Shepherd Homes.
  • Howard-Jones v Tate.
  • ICDL GCC Foundation v The European Computer Driving Licence Foundation.
  • Jivraj v Hashwani.
  • Meritz Fire and Marine Insurance v Jan De Nul.
  • NAP Anglia v Sun-Land Development.
  • Omni Laboratories v Eden Energy.
  • Partner Projects v Corinthian.
  • PHD Modular v Seele GmbH.
  • Rainy Sky v Kookmin Bank.
  • Re Kaupthing Singer and Friedlander.
  • Systech International v PC Harrington Contractors.

Bibby Financial Services v Magson, where the High Court had to determine whether guarantees and warranties in the form of deeds had been delivered by individuals.

Carillion Utility v SP Power Systems, where the Outer House of the Scottish Court of Session upheld a challenge on the basis of a breach of the rules of natural justice, where the adjudicator had used his own knowledge and experience, but declined to sever the adjudicator’s decision.

Costello v MacDonald, where the Court of Appeal held that individuals who were not a party to a building contract were not liable to the contractor to make monetary restitution for unjust enrichment, where one of the contracting parties had failed to pay the contractor the sums due. The court held that to do otherwise would undermine the parties’ contractual arrangements.

Daventry District Council v Daventry & District Housing, where the Court of Appeal granted rectification on the basis of an objective interpretation of the parties’ intentions.

Fenice Investments v Jerram Falkus, where the TCC held that the successful party in an adjudication (Fenice) was entitled to recover the balance of the adjudicator’s fees from the losing party (Falkus), when Falkus failed to pay them.

Green v Eadie, where the TCC considered the limitation period for a misrepresentation claim under section 2(1) of the Misrepresentation Act 1967 and, separately, the date on which the cause of action accrued.

Hackney Empire v Aviva Insurance UK, where the TCC gave judgment on liability against a surety (bondsman) in relation to a claim for liquidated damages due from an insolvent contractor, holding that a side agreement and advance payments on account of a loss and expense claim did not discharge the surety’s liability under the bond.

Harrison v Shepherd Homes, where the TCC found a developer liable to home owners for defects in foundations across an entire residential development. The wide-ranging judgment considered a number of legal issues including the developer’s liability under sales contracts, consumer protection regulation, the Defective Premises Act 1972 and NHBC Buildmark cover.

Howard-Jones v Tate, where the Court of Appeal considered the distinction between the rescission of a contract and its discharge by breach.

ICDL GCC Foundation v The European Computer Driving Licence Foundation, where the High Court of Ireland ruled on the meaning of “gross negligence” in a clause limiting liability under a commercial contract.

Jivraj v Hashwani, where the Supreme Court unanimously found that arbitrators are not employees within the ambit of the Employment Equality (Religion or Belief) Regulations 2003 (SI 2003/1660).

Meritz Fire and Marine Insurance v Jan De Nul, where the Court of Appeal confirmed the High Court’s ruling that advance payment guarantees are performance bonds and not contracts of surety.

NAP Anglia v Sun-Land Development, where the TCC held that the adjudicator did not breach the rules of natural justice, but ordered a partial stay of execution of the judgment sum due to the claimant’s financial position.

Omni Laboratories v Eden Energy, where the TCC confirmed that it is inappropriate for parties to make significant applications for specific disclosure and to strike out parts of witness statements, at the pre-trial review (PTR).

Partner Projects v Corinthian, where the TCC held that the adjudicator had jurisdiction to award interest on the sums claimed. The court declined to order a stay of execution of the judgment sum due to the claimant’s financial position.

PHD Modular v Seele GmbH, where the TCC considered the extent to which it is necessary to show that proceedings are contemplated or likely when making an application for pre-action disclosure under Civil Procedure Rule 31.16.

Rainy Sky v Kookmin Bank, where the Supreme Court ruled on a question of contract interpretation, including the important question of when, if at all, the court can consider arguments based on business common sense.

Re Kaupthing Singer and Friedlander, where the Supreme Court considered the combined effect of the rule against double proof and the rule in Cherry v Boultbee (1839) 4 My & Cr 442, and whether the Court of Appeal decision in Re SSSL Realisations (2002) Ltd [2006] EWCA Civ 7 was correct.

Systech International v PC Harrington Contractors, where the TCC confirmed that an adjudicator’s role is not limited to writing the decision, but extends to other matters. If the adjudicator’s decision is unenforceable because of a breach of the rules of natural justice, that does not mean there is a total failure of consideration. The adjudicator is still entitled to be paid his fees.

For details of the notable decisions from the first half of the year, see Blog post, January to June 2011, a half-year case review.

Leave a Reply

Your email address will not be published. Required fields are marked *