Construction update May 2012

West Country Renovations Ltd v McDowell & Anor (Rev 1) [2012] EWHC 307 (TCC) (23 February 2012)

This case offers helpful guidance on the listing of TCC cases.  The case involved a small builder claiming just over £100,000 in respect of a final account for work on a flat in London. 

Head of the TCC, Akenhead J noted the submissions

“Politely but forcefully, Counsel made the following points as to why their clients would prefer to stay in the High Court:

(a) The TCC in the High Court was a victim of is own success, in that its case management practices and ability to secure reasonably early trial dates for a 3 day trial for a case such as this was well known and established. There was uncertainty as to whether the County Court could as readily accommodate a trial for a 3 day case this year or sufficient time and early appointments for procedural applications as the TCC could.

(b) The Claimant was a small builder to whom this case and its outcome was very important. The Defendants were also anxious to have this dispute resolved efficiently

(c) There was a good chance that the case would settle and any transfer to the County Court would not particularly assist that process.”

The judge ordered transfer. He issued the following guidance

“(1) Generally, claims which are for less than £250,000 should be commenced in County Courts or other High Court centres outside London which have TCC designated judges.

(2) However, a non-exclusive list of exceptions is as follows:

(a) Cases involving adjudications, including enforcements and arbitrations may be started in the High Court, irrespective of the financial amount involved; this is justified by the need to build up a body of case law which is consistent in these important areas of construction law business.

(b) International cases of any value will ordinarily be accepted. These will involve cases between non-resident (in the UK) parties or cases involving foreign projects or developments. This is explicable on the basis that for such cases, London is, commonly if not invariably, the first port of call in such cases, overseas parties will expect a TCC High Court judge to hear the case and the judges here are experienced in international work.

(c) Cases involving new or difficult points of law in TCC business or which have issues of technical complexity suitable for a High Court judge.

(d) Any test case or case which will be joined with others which will be treated as test cases. Examples could be a fire supposedly caused by a washing machine, car or lorry where the value of the claim is a five- or six-figure sum but it may be joined with others in which similar points are being taken.

(e) Public procurement cases. As the TCC in London has built up an expertise and experience over the last 4 years, it is sensible if the judges in the TCC deal with this interesting, important and developing area of law and practice.

(f) Part 8 and other claims for declarations.

(g) Claims which cannot readily be dealt with effectively in a County Court or Civil Justice centre by a designated TCC judge.”

(h) Complex nuisance claims brought by a number of parties, even where the sums claimed are small.

(i) Claims for injunctions.

If there is any other good reason (even if not mentioned above) why any proceedings instituted in the TCC in London should remain in the High Court, the Court will retain the case.”

Whether this will affect the issue levels in regional TCC centres will remain to be seen.

Partner Projects Ltd v Corinthian Nominees Ltd [2011] EWHC 2989 (TCC) (23 November 2011)

This case concerned an application to enforce an adjudicator’s decision. It is of interest because it addresses the question of interest due on uncertified money.

This has been a point that has exercised the courts before. It arises from the fact that the JCT standard contract provides for interest to be paid where certified monies are not paid, but there is no such express provision where monies are not certified.

In Carillion v Devonport The Court of Appeal rejected a view that the Scheme for Construction Contracts (para 20(c) ) allowed interest to be awarded.  They did however decide that there had been an ad hoc agreement to give the adjudicator jurisdiction to award interest.

In practice there are some answers to this problem for example finance charges or damages.  Claims are sometimes made under the Late Payment legislation.

In Partner Projects interest was a fairly big issue because the adjudicator had already decided in a previous adjudication that the contract had been repudiated in 2006; so there was interest for at least 5 years.

Edwards –Stuart J decided that what the adjudicator had done was  “opened up, reviewed and revised the architect's certificates and to substitute for the sums actually certified the sum that he considered should have been certified.”  He also held  that the adjudicator had power to do  so under clause  41A5.5.8 of the contract which provides “having regard to any term of this Contract relating to the payment of interest, deciding the circumstances in which or the period for which a simple rate of interest shall be paid”

There is of course a wider answer to the point which the judge also raised, that being that the adjudicator’s decision whether right or wrong on a point of law within his jurisdiction is to be enforced .

The case also provided a convenient rehearsal the current law on whether to stay the enforcement of a judgement based on an adjudicator’s decision.

ACD (Landscape Architects) Ltd v Overall & Anor [2011] EWHC 3362 (TCC) (15 December 2011)

Matters often ebb and flow in the law.  Recently we saw a counterclaim struck out because there was no expert support for the Defendant’s position and in the absence of such evidence,  a limited pleading of breach (see Pantelli Associates).

In ACD a similar application was made and in answer to it a witness statement was served referring to a draft expert’s report and to its contents. Although there was an express reservation of the privilege that had attached to the report, the Judge held that it had been  “deployed” and so privilege had been lost and the report had to be disclosed.

The strike out application was withdrawn , but on terms that the court should decide the costs of it, which it did in January ACD (Landscape Architects) Ltd v Overall & Anor [2012] EWHC 100 (TCC) (27 January 2012). Subject to succeeding in the case overall, the Claimant would get his costs. The likelihood is that they would exceed the sum for which the claim was commenced (just over £10,000).  In giving Judgement, Akenhead J discussed Pantelli Associates and indicated that striking out would only be appropriate in extreme cases and that the more likely course would be to give a party an opportunity to produce supporting expert evidence.

Walter Lilly & Company Ltd v Mackay & Anor [2012] EWHC 649 (TCC) (15 March 2012)

This was another case dealing with questions of privilege. Here, the correspondence between a claims consultant, even though it employed barristers, and its client, did not attract legal professional or legal advice privilege. The correspondence was thus disclosable. It appears that the correspondence arose before litigation was contemplated and so the possibility of litigation privilege could not apply.

Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd & Anor [2012] EWCA Civ 265 (09 March 2012)

We have looked at this case previously. The question for the court being whether an authorised exchange of e-mails could amount to a sufficient “note or memorandum” to satisfy the requirement of the Statute of Frauds 1677.

As Tomlinson LJ said, the Commercial Court  “held that an enforceable contract of guarantee may indeed be found in a properly authenticated series of documents.” He recorded some comments on what the judge there had said  “His decision is said to have been unorthodox and contrary to the understanding of commercial men. It is said to have caused alarm.”

Whether that was the case or not, the Court of Appeal upheld the Judge’s view that e-mails from the authorised broker for a party could confirm that party’s  guarantee.

This is important in circumstances where the language used in e-mail often tends to be less strict than in a correspondence by letters.