REUTERS | Nigel Roddis

October to December 2016 case review for construction practitioners

Oscar Wilde, The Ballad of Reading Gaol:

“I know not whether Laws be right, or whether Laws be wrong; All that we know who lie in gaol is that the wall is strong;”

We have seen a number of interesting decisions affecting construction and engineering practitioners during the fourth quarter of 2016.

Adjudication cases from October to December 2016

In Amey Birmingham Highways Ltd v Birmingham City Council, HHJ Raeside QC granted declaratory relief finding that the adjudicator’s decision was wrong, as a matter of law, and was not binding on either party.

In Amey Wye Valley Ltd v The County of Herefordshire District Council, Fraser J enforced an adjudicator’s decision in full, rejected an application to sever part of it and declined to grant a number of declarations.

In Dacy Building Services Ltd v IDM Properties LLP, Jefford J declined to grant summary judgment to enforce the adjudicator’s decision, finding that the factual dispute regarding the parties’ alleged oral contract was too complex for CPR 24.

In Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd, Jefford J granted summary judgment to enforce the fourth adjudicator’s decision, finding that he had jurisdiction to reach his decision.

In Kilker Projects Ltd v Purton (t/a Richwood Interiors), Ms Finola O’Farrell (sitting as a deputy High Court judge) held that a party can refer to a second adjudicator the question of the value of its final account.

In LXB RP (Crown Road) Ltd v Squibb Group Ltd, Stuart-Smith J enforced an adjudicator’s decision, finding there were no grounds for a stay or to order the judgment sum to be paid into court or an escrow account.

In Niken Construction Ltd v Trigram Carver Street LtdHHJ David Grant J enforced the third adjudicator’s decision and, in the process, rejected all of the arguments opposing enforcement. The court also declined to consolidate the contractor’s enforcement proceedings with the employer’s main action.

In Octoesse LLP v Trak Special Projects Ltd, Jefford J declined to grant the declaratory relief sought, finding that the employer was not entitled to deduct liquidated damages, which meant the adjudicator’s decision was enforceable. The court also held that the claims consultant’s costs were recoverable.

Other notable cases from October to December 2016

In Amey LG Ltd v Cumbria County Council, HHJ Stephen Davies’ decided a complex dispute concerning a highways maintenance contract (and the appropriate costs order, which included proportionality issues under CPR 44.2).

In Arcadis Consulting (UK) Ltd v AMEC (BSC) Ltd, Coulson J held that the parties entered into a simple contract based on a letter of intent, which did not incorporate any of the terms and conditions contended for and did not include any cap on liability.

In Balfour Beatty Regional Construction Ltd v Grove Developments Ltd, the Court of Appeal upheld Stuart-Smith J’s first instance decision that the contractor had no contractual right to make or be paid for an interim application made while the works were ongoing (and after an agreed payment schedule had expired).

In Connect Plus (M25) Ltd v Highways England Company Ltd, Coulson J refused to strike out a claim arising from an expert’s determination on the grounds that the court had no jurisdiction to consider it and declined to order a stay because there was no breach of the parties’ contractual dispute resolution procedure.

In Dixon and others v Radley House Partnership (a firm) and others, on an application for permission to amend a defence to plead limitation, Stuart-Smith J held that the claimants had paid the correct court fee when they issued their damages claim.

In Dooba Developments Ltd v McLagan Investments Ltd, the Chancery Division interpreted a buyer’s right to rescind a conditional contract containing ambiguous drafting.

In Essar Oilfields Services Ltd v Norscot Rig Management PVT Ltd, the Commercial Court held that a third party funder’s fees were recoverable as costs of an ICC arbitration.

In Fluor Ltd v Shanghai Zhenhua Heavy Industries Ltd, Edwards-Stuart J held that a supplier was liable to a contractor for the cost of additional testing and repairs caused by weld defects.

In Grand China Logistics Holding (Group) Co Ltd v Spar Shipping AS, the Court of Appeal held that an obligation to make prompt payment was not a condition of a charterparty.

In Harlequin Property (SVG) Ltd and another Wilkins KennedyCoulson J awarded a developer damages for negligent advice concerning the construction of a luxury resort in the Caribbean. He also considered costs and other consequential issues.

In Jamadar v Bradford Teaching Hospitals NHS Foundation Trust, the Court of Appeal held that a party was limited to recovering only court fees because it failed to file a costs budget.

In Lloyds Bank plc v McBains Cooper, Edwards-Stuart J commented on the scope of a project monitor’s duty to advise a funder on a development project, together with the quantum of losses arising from a breach of that duty.

In National Infrastructure Development Co Ltd v Banco Santander SA, the Commercial Court considered whether the fraud exception applied to demands under standby letters of credit.

In Scottish Power UK plc v BP Exploration Operating Company Ltd, the Court of Appeal gave guidance on the correct way to apply the contract interpretation presumption that the parties should not be taken as intending to give up rights or claims that the general law gives them.

In Spartafield Ltd v Penten Group Ltd, Alexander Nissen QC (sitting as a deputy High Court judge) held that the parties’ contract was governed by a JCT ICD 2011 and not a letter of intent (as the first adjudicator had decided).

In Star Polaris LLC v HHIC-Phil Inc, the Commercial Court considered the meaning of “consequential or special losses” in the context of a limitation of liability clause, and whether this must mean losses that fall within the second limb of the Hadley v Baxendale rule.

In The RBS Rights Issue Litigation, the Chancery Division held that, for the purposes of legal advice privilege, the meaning of client is narrowly defined (following Three Rivers District Council and others), which meant the bank’s claim that certain documents were privileged on the basis that they were lawyers’ working papers failed.

In Wells v Devani, the Court of Appeal held that an implied term cannot be used to fill a gap in an incomplete contract.

In Willmott Dixon Construction Ltd v Robert West Consulting, Coulson J considered whether the claimant owed a non-delegable duty in relation to underpinning works carried out by a sub-contractor, and rejected the defendant’s application to amend a statement of case.

Further information

For details of the year’s previous judgments, see our January to March, April to June and July to September case reviews. Public procurement decisions are detailed in the Public procurement case tracker.

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