Building Law Monthly

In Barr v Biffa Waste Services Ltd [2012] EWCA Civ 312, [2012] All ER (D) 141 (Mar) the Court of Appeal allowed the claimants’ appeal from the decision of Mr Justice Coulson (on which see our December 2011/January 2012 issue pp11-12). In doing so, the Court of Appeal affirmed that the case should have been decided in accordance with orthodox legal principles which have long governed the law of nuisance. Given the errors of law made by Coulson J, it was not possible for the Court of Appeal to draw any final conclusion from his analysis of the individual claims and so the case was remitted to ‘an appropriate forum to complete that assessment’. This conclusion is an unfortunate one in so far as it will require the parties to incur still further costs in the resolution of their dispute. However, the Court of Appeal expressed the hope that the parties might be able to bring the proceedings to a close ‘as speedily and economically as possible’, possibly by way of mediation.

The Court of Appeal in Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445, [2012] 2 All ER 476 held that, in the case of a contract for the sale of land, the obligation of the purchaser to pay a deposit by a particular time will generally be a term of fundamental importance to the contract so that any breach will entitle the vendor to treat the contract as at an end. However, the same cannot be said of a failure to comply with a time of the essence notice. Where such a notice is served following the breach of an innominate term or a warranty a failure to comply with the notice will not, of itself, amount to a repudiatory breach of contract.

In Jet2.com Ltd v Blackpool Airport Ltd [2012] EWCA Civ 417, [2012] All ER (D) 24 (Apr) the Court of Appeal dismissed an appeal from the decision of Judge Mackie (on which see our October 2011 issue, pp11-12) and, in doing so, considered the nature of the obligation that is assumed by a party who agrees to use best endeavours. In relation to the enforceability of such an obligation, it was held that it should usually be held to be enforceable unless the object intended to be procured by the endeavours is too vague to be itself a matter of legal obligation or the parties have provided no criteria on the basis of which it is possible to assess whether best endeavours have been, or can be, used. In relation to the extent of the obligation that is assumed, it operates to qualify the pursuit of self-interest and the extent to which it permits a party to have regard to its own financial interests will depend very much on the nature and terms of the contract in question.

In Baht v Masshouse Developments Ltd [2012] All ER (D) 168 (Mar) Mr George Bompas QC, sitting as a Deputy Judge of the High Court, held that the defendant developers had committed a repudiatory breach of contract in failing to arrange for a development to be completed ‘with all due diligence’ and that the claimant purchasers of apartments in the development were, as a consequence, entitled to recover the deposits which they had paid for the properties in question. On the facts he concluded that this was not a case of ‘mere delay’ in the completion of the works but was a case in which the defendant, by its failure to take forward the project during 2009, had signalled an intention on its part not to be bound by the contracts.

In Higginson Securities (Developments) Ltd v Hodson [2012] EWHC 1052 (TCC), [2012] All ER (D) 151 (Apr) Mr Justice Akenhead held that potential parties to litigation embarking on the Pre-Action Protocol for Construction and Engineering Disputes must always remember to consider it in the context of the overriding objective. They must not use it as a weapon or a tactic, and they must both seek to cooperate during its implementation. Where the value of a claim is low, it is important that the parties proceed reasonably expeditiously, do not drag the process out and they must keep costs to a reasonable minimum.

In United Marine Aggregates Ltd v G M Welding & Engineering Ltd [2012] EWHC 779 (TCC), [2012] All ER (D) 81 (Apr) Mr Justice Ramsay held that, when deciding whether a defendant has exercised reasonable care, the task of the court is not to apply an absolute standard. Rather, the court must have regard to the particular circumstances of the case and the context in which the parties were operating. Conduct that is reasonable in one context may be unreasonable in another.

In Working Environments Ltd v Greencoat Construction Ltd [2012] EWHC 1039 (TCC), [2012] All ER (D) 23 (May) Mr Justice Akenhead held that it is not necessary to wait until a valuation falls due for payment before there can be a dispute about an interim valuation of work. A dispute about an interim valuation can arise immediately there is a dispute between the parties about that valuation and it can be referred to adjudication. He also held that the substance of the decision of the adjudicator could be enforced despite the fact that the adjudicator had considered two matters over which he had no jurisdiction. On the facts it was held to be possible to sever these two items and enforce the rest of the decision.

In Highlands and Islands Airports Ltd v Shetland Islands Council [2012] CSOH 12, 2012 Scot (D) 13/2 Lord Menzies held that an adjudicator had breached the principles of natural justice when he sought confirmation of his view on a point of law from senior counsel and did not inform the parties of the steps that he had taken, nor give to them an opportunity to comment on the point of law concerned. The point of law was held to be of considerable potential importance to the parties and so it could not be said that the breach of natural justice had been peripheral or irrelevant. Lord Menzies also held that it was not possible to sever and enforce the part of the award which was not affected by the breach of natural justice because the dispute which the parties had referred to adjudication was a single dispute and so had to stand or fall as a whole. Finally, Lord Menzies rejected the submission that the defendant had approbated the decision of the adjudicator and so he held that the pursuer was not entitled to enforce the decision of the adjudicator.