Human Rights

Although the Human Rights Act does not come into force until 2 October 2000, in Scotland the European Convention has already been partially introduced. In Country Properties Ltd v The Scottish Minister, a Listed Building Consent application was successfully challenged since the reporter (in the judicial sense) was paid by the Executive and was not, in the circumstances of the case, independent and impartial as required by Article 6 (the right to a fair trial). The fact that there was a right of appeal to the Court of Session was not enough since that right was limited and there could be no full review of the evidence.

Concern has been expressed that Adjudication is contrary to Article 6. However Adjudication only provides an interim remedy. Any dispute can still, in contrast to the situation here, be aired in full through litigation or arbitration.


In Whiteways Contractors (Sussex) Ltd v Impresa Castelli Construction UK Ltd, HHJ Bowsher QC found that in making an invitation to the Adjudicator to decide on jurisdiction, both parties gave the Adjudicator the power to decide that issue.

Interestingly in his judgment, he also said that he saw no reason why a distinction should be made between set off and abatement for the purposes of the HGCRA. An Adjudicator can make abatements in valuing a claim referred to him, whether or not the abatement had been raised in a notice of intention to withhold. However, he could not look at abatements outside the dispute referred unless the matter in dispute had been specifically included in a section 111 notice.

Griffin & Tomlinson v Midas Homes Ltd provides a warning on the need for care when drafting a Notice of Adjudication. Here HHJ LLoyd QC ruled that a Notice, which referred to various earlier invoices and letters failed to describe, in accordance with the provisions of the Scheme, precisely which disputes had been referred. Only one dispute out of a series had been suitably defined. Thus only that part of the Adjudicator's decision was enforceable and the referring party was liable for the fees and expenses incurred in respect of the remainder of the decision, which was outside of the Adjudicator's jurisdiction since it had been improperly referred.

In R G Carter Ltd v Edmund Nuttall Ltd, Carter sought an injunction claiming that the appointment of the adjudicator was not valid because, Nuttall had not identified the subcontract documentation, another individual was named as the adjudicator and the parties had not attempted to resolve their disputes by mediation before starting adjudication proceedings.

HHJ Thornton QC rejected these grounds and refused to grant the injunction, noting that it was common ground that a contract existed incorporating DOM/1. A distinction should be made between "internal jurisdictional disputes" (as to the scope of the dispute referred) and "threshold jurisdictional disputes" (going to the ability at the outset to commence adjudication proceedings). The time to bring the internal jurisdictional disputes to court was in enforcement proceedings. The identification of an individual adjudicator was plainly made under the old DOM/1 Clause 24 regime, not the new (1998 reissue) Clause 38A adjudication clause. Significantly the mediation precondition undermined the right of either party to refer a dispute to adjudication "at any time" and therefore was not compliant with the Act.

Health & Safety

The HSC is seeking views on proposed changes to the 1994 CDM Regulations. According to the HSE the revised code "is intended to focus the duty holders on managing health and safety while avoiding unnecessary bureaucracy." The new Code focuses on assessing competence and resources, preparing health and safety plans and giving advice on the health and safety file. The consultation period runs until 30 November. We have a copy of the draft Code, or alternatively copies can be obtained from the HSE.

TCC Cases

In October 2000 a new judge, HHJ Seymour QC, joins the TCC. He has already been sitting. One of his first decisions was Cox v Sloane where he applied the Ruxley principles in assessing damages in a case where the Defendant surveyor/consultants accepted that a bungalow would have to be rebuilt because the foundations were inadequate as a result of inadequate inspection of the site.

The starting point for assessing damages was the cost of cure. Only if that were an unreasonable sum would damages be assessed on the difference in value. Regard should be given to the loss truly suffered. Here the Defendant had broken his promise. Thus he could not complain if the Claimants' interests were preferred. On the facts here, the cost to rebuild would not provide compensation for distress, but would provide the Claimants with the bungalow that they should have had, having regard not only to the capital value but also the amenity value that that bungalow would have had to the Claimants if it had been properly built. The fact that the Claimants had a disabled son emphasised that amenity value.

In Weldon Plant Ltd v Commission for New Towns, HHJ LLoyd QC held that where a variation under clause 51 of the ICE Conditions was made, the valuation of that variation should be carried out with the aim of restoring the party to the financial position it would have been in but for that variation. Such a valuation would include consideration of a claim for overheads and profits.

In Stent Foundations v M J Gleeson, Stent brought a claim for cost of repairs and loss of hire costs in respect of a mobile crane. Gleeson's standard terms provided that the sub-contractor "shall be responsible for and indemnify the contractor against any claims in respect of plant or tools of the sub-contractor which may be lost or damaged by fire or any other cause." HHJ Bowsher QC held that this clause was designed to cover Gleeson in respect of claims from third parties and not negligence, the cause of the damage here. In cases of doubt the words will be construed against the party (ie Gleeson) who made the stipulation.

Other Cases of Interest

In Frans Maas (UK) Ltd v Habib Bank, Christopher Belay QC held that the words "we claim the sum of X, P having failed to meet their contractual obligations to us" did not comply with the specific guarantee requirements that any claim should confirm that the principal had "failed to pay you under their contractual obligations".

In Manchester & District Housing Association v Fearnly Construction and Dunbar Bank, the first Defendant went into liquidation. It had contracted with the Claimant to construct and then sell the completed building to the Claimant. Mr Garnett QC sitting in the Chancery Division agreed that the Claimant was entitled to damages for the cost of completing the building together with specific performance of the contract (ie conveyance of the land with the incomplete building), and an abatement of the price equal to the cost of completing the building work. Such a remedy was the closest thing that could be achieved to enabling the contract to be completed in light of the Defendant's default.

In Barking & Dagenham LBC v Terrapin Construction Ltd, the CA applied the Crown Estates & Mowlem decision to rule that a certificate under clause 30.8.1 of the JCT with Contractor's Design (1981) contract provided conclusive evidence as to the quality of materials and standard of workmanship in respect of all the claims that had been made (including failure to meet statutory requirements) except claims based upon an alleged failure of design.

In John Mowlem Construction plc v Secretary of State for Defence, the parties had entered into an amended form of the GCWorks1 contract, which provided for a fixed six-month time limit for the resolution of disputes by arbitration. The Defendant argued that due to the complexities of the dispute in question, it could not be resolved within the 6-month time limit provided for by Condition 60. Thus there could be no valid reference to arbitration since the dispute could not be resolved according to the provisions of Section 33 of the Arbitration Act 1996 which require an Arbitrator to give each party a reasonable opportunity of putting its case and responding to the case made against it.

Mr Justice Steel rejected this argument stating that it would be absurd commercially if an agreed clause limiting the time set for an arbitration could result in some references being declared invalid. Here the Court took the practical approach and extended the agreed timetable, but only so far as was necessary to avoid a substantial injustice.

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