REUTERS | David Bebber

July to December 2012, a half year case review

Edmund Burke, Speech on concilliation with America, 1775:

“It is not, what a lawyer tells me I may do; but what humanity, reason, and justice, tell me I ought to do.”

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

  • Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd.
  • Ampurius v Telford Homes.
  • Beck Interiors Ltd v UK Flooring Contractors.
  • Berent v Family Mosaic Housing and another.
  • BY Development Ltd and others v Covent Garden Market Authority.
  • Cleightonhills v Bembridge Marine Ltd and others.
  • Freetown v Assethold Ltd.
  • Hannon v Hillingdon Homes Ltd.
  • Jackson v Dear and another.
  • JB Leadbitter & Co Ltd v Hygrove Holdings Ltd.
  • Lidl UK GmbH v RG Carter Colchester Ltd.
  • Mir Steel UK Ltd v Morris.
  • National Merchant Buying Society Ltd v Bellamy and another.
  • PC Harrington Contractors Ltd v Systech International Ltd.
  • Rust Consulting Ltd v PB Ltd (formerly Kennedy & Donkin Ltd).
  • Simmons v Castle.
  • Squibb Group Ltd v Vertase FLI Ltd.
  • Stannard (t/a Wyvern Tyres) v Gore.
  • Vertase FLI Ltd v Squibb Group Ltd.
  • Walter Lilly & Co Ltd v Mackay and another.
  • Wuhan Guoyu Logistics Group Co Ltd v Emporiki Bank of Greece SA.

In Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd, HHJ Keyser QC in the TCC held that the project manager had breached its duty to exercise reasonable skill and care in procuring an executed building contract. As such, it was liable to the employer for losses arising on a project where the entire works were carried out under a series of letters of intent.

In Ampurius v Telford Homes, the High Court looked at two relatively common phrases in construction contracts, “reasonable endeavours” and a promise to carry out works “with due diligence”.

In Beck Interiors Ltd v UK Flooring Contractors, 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 Berent v Family Mosaic Housing and another, the Court of Appeal confirmed that in tree root damage cases, the claimant has to show that damage was reasonably foreseeable and that there were reasonable steps that should have been taken to eliminate or minimise the risk.

In BY Development Ltd and others v Covent Garden Market Authority, Coulson J in the TCC rejected the claimants’ application to adduce expert evidence at the trial of a public procurement dispute under the Public Contracts Regulations 2006. Expert evidence will not generally be admissible or relevant, unless it is required to provide technical explanations or, unusually, where such evidence is relevant and necessary to allow the court to reach a conclusion on manifest error.

In Cleightonhills v Bembridge Marine Ltd and others, Akenhead J in the TCC held that several third parties did not breach their duty of care in tort and there was, on the facts, no duty to warn of the inadequate design of the structure.

In Freetown v Assethold Ltd, the Court of Appeal overturned the High Court’s judgment and held that section 7 of the Interpretation Act 1978 applies to the postal service provisions in section 15(1) of the Party Wall etc. Act 1996. This means that the 14-day time limit for making an appeal against the award runs from the date of deemed receipt of the award, not the date of posting the award.

In Hannon v Hillingdon Homes Ltd, the High Court held that a bannister is part of the structure for the purposes of the Defective Premises Act 1972. Therefore, the landlord was liable to a third party injured in a fall caused by the tenant’s removal of the bannister.

In Jackson v Dear and another, the High Court considered the proper test for implied terms, reconciling the Court of Appeal’s approach in Mediterranean Salvage and Towage Ltd v Seamar Trading and Commerce Inc [2009] EWCA Civ 531, with the Privy Council’s test in Attorney General of Belize and others v Belize Telecom Ltd and another [2009] UKPC 11.

In JB Leadbitter & Co Ltd v Hygrove Holdings Ltd, HHJ Havelock-Allan QC in the TCC held that an escrow agreement (which was a construction contract) included a pay-when-paid clause contrary to section 113 of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996) and awarded summary judgment.

In Lidl UK GmbH v RG Carter Colchester Ltd, Edwards-Stuart J in the TCC severed an adjudicator’s decision, refusing to enforce that part the adjudicator had no jurisdiction to decide. The court also rejected the contractor’s challenge to the enforcement proceedings, alleging a breach of the rules of natural justice and declined to grant it declaratory relief under CPR Part 8.

In Mir Steel UK Ltd v Morris, the Court of Appeal explained how a modern court should apply the well-known rule of interpretation set out in Canada Steamship Lines Ltd v The King [1952] UKPC 1. This affects exclusion clauses capable of restricting liability for negligence or other fault-based liability.

In National Merchant Buying Society Ltd v Bellamy and another, the High Court held that an all monies, continuing guarantee given when there was a (subsequently varied) existing specific obligation between the creditor and the underlying obligor, would not be discharged by that subsequent variation.

In PC Harrington Contractors Ltd v Systech International Ltd, the Master of the Rolls, Lord Dyson, in the Court of Appeal held that the adjudicator was not entitled to his fees because his decision was unenforceable due to a breach of the rules of natural justice.

In Rust Consulting Ltd v PB Ltd (formerly Kennedy & Donkin Ltd), the Court of Appeal overturned two High Court decisions on the interpretation of the scope of an indemnity and the right of the indemnifier to dispute a claim that it settled on behalf of the indemnified party.

In Simmons v Castle, the Court of Appeal held that the level of general damages in certain types of tort claims would be increased by 10%. It subsequently confirmed that the increase will not be available to those claimants who enter into a conditional fee agreement (CFA) before 1 April 2013. Also, the increase in damages will apply in contract claims as well as tort claims.

In Squibb Group Ltd v Vertase FLI Ltd, Coulson J in the TCC enforced an adjudicator’s decision, rejecting the paying party’s attempt to set-off sums identified in a withholding notice issued after the adjudicator’s decision.

In Stannard (t/a Wyvern Tyres) v Gore, the Court of Appeal held that there is no special modification of the rule under Rylands v Fletcher for cases involving the escape of fire. It was an essential requirement of the rule that the defendant had brought some exceptionally dangerous “thing” onto its land, which escaped causing damage. Here the “thing” (the tyres) did not escape, only the fire fuelled by the tyres escaped. Therefore, a claim based on Rylands v Fletcher failed.

In Vertase FLI Ltd v Squibb Group Ltd, Edwards-Stuart J in the TCC refused to enforce an adjudicator’s decision, finding that the adjudicator had considered the same issue in a previous adjudication.

In Walter Lilly & Co Ltd v Mackay and another, Akenhead J in the TCC considered a contractor’s claims relating to causation, extension of time, defects and a global claim for loss and expense (including delay and disruption, and head office overheads and profit).

In Wuhan Guoyu Logistics Group Co Ltd v Emporiki Bank of Greece SA, the Court of Appeal decided that a document labelled as a payment guarantee was actually a performance bond on the basis of its commercial context.

For details of other notable decisions from 2012, see:

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