THE SCOPE OF THE DECISION IN MELVILLE DUNDAS

Pierce Design International Ltd v Johnston [2007] EWHC 1691 (TCC), 17 July 2007

In Pierce Design International Ltd v Johnston [2007] EWHC 1691 (TCC), 17 July 2007, Judge Coulson considered the scope of the decision of the House of Lords in Melville Dundas Ltd v George Wimpey (UK) Ltd [2007] UKHL 18; [2007] 1 WLR 1136 (on which see our May 2007 issue, pp. 1–6). He declined to confine the decision to its particular facts and affirmed that clause 27.6.5.1 of the JCT Standard Form of Building Contract (with Contractor’s Design) 1998 edition, the clause which was also in issue in Melville Dundas, did not conflict with s111 of the Housing Grants, Construction and Regeneration Act 1996. However, he held that, as a matter of interpretation, the proviso to this clause operated to deny the defendants the entitlement to rely on this clause for the purpose of defeating the claimant’s claim to payment. In essence he held that, in the absence of a withholding notice, the defendants had ‘unreasonably not paid’ the sums which the claimant sought to recover.