Case notes

Brickie crushes Abbey
Abbey employed labour-only bricklaying contractor PP Brickwork (PP) on a housing project in Herne Bay. A variation clause in the subcontract, worth £484,000, said that Abbey could alter the number of homes, change the construction project or suspend the contract and re-tender, without PP being able to claim. Abbey could determine [end employment under] the subcontract if a specified default continued for seven days after a notice.

Abbey made a series of complaints between June and September. By October Abbey said it was considering ending the deal because PP had insufficient labour.

On December 12, Abbey's contract manager complained he was having to deal with gangs of bricklayers rather than one site foreman. He gave PP seven days. However, the next day Abbey's chief QS told PP that its contract would be determined and PP would be liable for any additional costs in employing another subcontractor.

PP claimed and in adjudication won £59,727, adjudicator's costs and interest.

When PP tried to enforce the award, Abbey sought a declaration that it had behaved correctly. The court held that Abbey had determined the contract too quickly and that the variations did not cover it.

Moral: A wide variation clause doesn't mean that anything goes

Case: Abbey Developments versus PP Brickwork. Technology and Construction Courts, July 4, 2003

Wet Woolies
Woolworths was moving store due to the redevelopment of a shopping centre in Aylesbury. It had 16 weeks to fit-out the new unit before vacating the existing one.

The concrete sub-floor of its new unit was partly original and partly new, with a channel running through the unit. Woolworths used a 50mm Isocrete K over the sub-floor, filling in the channel. Two months after the screed had been laid, Woolworth's flooring contractor applied a smooth layer of Arditex and glued down Amtico strip flooring. Although the adhesive was known to break down in the presence of water, it did not use a waterproof membrane.

Henry Boot Management, carrying out the general conversion work on the shopping centre, had access to areas next to the new unit, including an adjacent unit separated only by an internal wall.

Within a week Woolworths' new floor failed due to damp. It blamed Henry Boot for allowing water to flood from the adjacent unit, causing ponding.

After extensive expert evidence the court held that although Henry Boot had been negligent, Woolworths had failed to either use a waterproof membrane or adhesive and had also left parts of the roof open. Woolworths' £123K claim failed.

Moral: Poor specs leave you liable

Case: Woolworths versus Henry Boot Management. Technology & Construction Court August 5, 2003.

Lovell gets its Legg over
In 2002 Mr Legg wanted to refurbish his Maida Vale home. Architect Nigel Bird recommended the JCT Minor Works contract form, MW 98. Lovell tendered £231,995, and, although it recommended other forms of contract, accepted the MW 98, but with fortnightly payments. The job was due to finish on November 29 with damages of £1,220 per week.

In October, Lovell notified Nigel Bird of delays. When Nigel Bird told Legg this meant five weeks, Legg sacked the firm.

The new contract administrator signed off a valuation on December 5 making it payable on December 19. On December 20, Lovell called Legg to chase payment. Legg alleged Lovell was demanding money with menaces.

Lovell gave notices of suspension and default. Legg claimed he had terminated Lovell's employment due to threats and intimidation. In the subsequent adjudication Lovell was awarded £85,373.

Legg claimed the adjudication was invalid under the Consumer Contracts Regulations 1999. The court disagreed. The regulations say that clauses that a consumer would not necessarily know about should be explained to them. But Legg had offered the MW 98 with the benefit of professional advice.

Moral: The customer ain't always right

Case: Lovell Projects versus Legg and Carver, July 2003

The steel ties that bind
Spanish steel-processing group Gonvarri's foreign trade director, Antonio Garcia wanted to buy steel to process at its Moroccan subsidiary Maroc. On April 25, 2000 Garcia faxed Ignacio Escario, the Spanish agent for Guernsey firm Midland, to get a quote for 10,275T steel in 'big coils'. Midland was sourcing the coils from ZAP in the Ukraine, which could provide them cheaply but had a limited range.

Midland quoted, and on May 11 Garcia faxed Escario with Maroc's requirements for sizes, weights and specification. But ZAP could only supply coils 2mm thick and 1,000 mm wide, not the 1.9mm x 995mm required by Maroc.

After discussions, Maroc faxed Escario with revised requirements. Escario called Garcia on May 22 and agreed the details of Maroc's fax with him and then faxed Midland to prepare formal confirmation.

Midland chased Garcia on June 20 for the formal OK. He faxed Midland that Maroc did not agree with the contract, citing damaged steel as the excuse. World steel prices had fallen.

Midland contended that the contract had been agreed on May 22 and it wanted damages. The court agreed with Midland even though there had been further arrangements and formalities to conclude.

Moral: Once a contract, always a contract

Case: Midland Industries v Giovanni Industries Maroc. Queens Bench Division February 7, 2003