Want to avoid costly disputes on your job? Then read Ann’s short-but-sweet summaries of the latest legal cases
Contract or no contract?
The Ricoh Arena is the home of Coventry City Football Club.
It was built between 2003 and 2005 under the JCT Standard Form of Building Contract with Contractor’s Design. The main contractor was Laing O’Rourke. The date for completion of 20 August 2005 was key, as a football match was scheduled for that date. In the event, practical completion was certified on 19 August, allowing the match to take place, but further works continued afterwards.
Haden Young was the M&E installer and designer. However, the subcontract was never signed as the warranties were not agreed. After 20 August, Haden Young and Laing started to argue about the contractual basis for the subcontractor continuing completion work. By 23 September Haden Young had suspended work and Laing said it would employ others to complete it.
However, on 31 October 2005 the two parties signed a further services agreement (FSA) for the work and services Hayden Young delivered after 19 August 2005. Clause 21 of the FSA said it was without prejudice to Haden Young’s contention that there had been no subcontract and Laing’s view that the subcontract did exist.
In December 2006, Haden Young started proceedings to claim quantum meruit for work done up to 19 August 2005 and for alleged breaches of the FSA. Laing, meanwhile, continued to argue that the subcontract existed and counter claimed.
The court was asked to decide whether there had been a subcontract and, if not, was Haden Young prevented from contending that no subcontract had been concluded and, if there was no subcontract, was it entitled to a sum for the works on a quantum meruit basis?
The court found there had been no subcontract and Haden Young was entitled to a quantum meruit payment for works up to 19 August 2005 on the basis of a remuneration still to be assessed.
Moral: No subcontract does not mean no payment.
Case: Haden Young Ltd v Laing O’Rourke Midlands Ltd, TCC May 2008. (CLICK IB 22)
Terms and admonitions
This case was an application to enforce an adjudicator’s award made to T&T Fabrications. It arose out of a contract negotiated between October 2002 and July 2003, which had been concluded in 2003. However the notice of adjudication was not issued until 12 November 2007.
The case arose after Hubbard had installed atrium bridges, staircases and other metalwork at the Victoria Docks development in London. Hubbard had two main arguments against the adjudicator’s award. The first was the relationship between the legal entities of the company T&T Fabrications Ltd and T&T Fabrications (a firm). However, the judge held it was clear the company had given the necessary authority for proceedings to be brought.
The second issue was whether there was a contract between T&T and Hubbard that allowed the adjudication scheme to be implemented under Section 107 of the Construction Act. If not, the adjudicator had no jurisdiction. Following the case of RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd in 2002, all the terms of the contract had to be in writing and not just the main terms. In Hubbard’s case, the judge found it was at least arguable some terms were missing and he could not enforce the award.
He also questioned what the case was doing in court so late in the day with only modest sums in dispute and legal costs out of all proportion. He felt the dispute was about matters that could have been dealt with years ago and before claims consultants got involved.
Moral: For statutory adjudication all contract terms are to be in writing.
Case: T&T Fabrications Ltd and T&T Fabrications (a firm) v Hubbard Architectural Metalwork Ltd, TCC April 2008. (CLICK IB 25)
The price of independence
The difference between an employee and an independent contractor can be quite subtle. Even if that difference can be established, legislation such as the Provision and Use of Work Equipment Regulations 1998 can affect liability for injuries.
Harvey Jennings had been self-employed doing work such as fencing and sheep shearing for years and had done fencing work for the Forestry Commission on a number of occasions.
On 19 January 2004 while delivering material for a fencing job in the Alport Valley near Bamford, Derbyshire, Mr Jennings was injured when his Land Rover went out of control on a steeply sloping field and rolled over. It was his own Land Rover, which he had modified by raising the chassis to fit dumper tyres. It was not licensed for road use and he only used it off-road.
A few months earlier, on 1 September 2003, Mr Jennings had signed a service contract with the Forestry Commission. Clause 2 confirmed that he was an independent contractor and not an employee of the commission.
The job was for 2.1km of fencing, and Mr Jennings was required to provide all materials (except netting) and the materials were to be taken to the fence line by Forestry Commission staff using a helicopter or all-terrain vehicle (ATV). In the event, Mr Jennings chose to use his own Land Rover for transporting some materials, with the acquiescence of the of the commission’s staff.
Mr Jennings sued the Forestry Commission, holding it liable for the accident. As an employee he would have been able to claim for his injuries and the lower court accepted his case. However, the Court of Appeal ruled that as he was an independent contractor the commission had no liability.
He had an alternative claim under the Provision and Use of Work Equipment Regulations 1998 – regulation 3(3) of which imposes an obligation on the person who has control to any extent of work equipment and the way in which work equipment is used at work.
Mr Jennings argued that his contract had required the commission to transport materials, but it had let him do so, it was liable. The Court of Appeal again disagreed. It found the regulations only applied to the extent of the commission’s actual control. In practice, Mr Jennings was working independently and in control of his vehicle.
If he had wanted an ATV or helicopter, the commission would have provided one.
The Court of Appeal overturned the lower court’s decision and Mr Jennings lost.
Moral: Liability for work equipment isn’t easy to define.
Case: Harvey Jennings v The Forestry Commission, Court of Appeal May 2008. (CLICK IB 22)
Ann Wright is an adjudicator and quantity surveyor. Tel: 01675 466 009