Ann Wright rounds up the rulings that affect you
Mr. Kelly gets Jewson hot
Why every company should know exactly what it is selling

"Can you believe that a boiler so small could be so efficient?" These words tempted Mr. Kelly into ordering Amptec electric boilers from his building suppliers, Jewson Ltd. He was converting a former convent in Devon into 13 flats. He had checked on possibility of a gas supply. It would take six months and cost £34,000. He could not wait that long.

Jewson had the solution, claiming that Amptec Heating Technology's boilers were "perfect for his requirements". Mr. Kelly ordered £6,000 worth.

However, Mr. Kelly soon found the flats had very low Standard Assessment Procedure (SAP) energy ratings. As a result, the flats could prove difficult to sell. Mr. Kelly argued the low SAP ratings meant that the boilers were not of a satisfactory quality as required by the Sale of Goods Act and withheld payments as damages.

Jewson disagreed, arguing that Amptec had made the representations. The court held that Jewson should have checked Amptec's claims and Jewson lost.

The damages are still to be agreed.

Moral: If you sell it, it's your responsibility to check it's OK.

Case: Jewson Ltd. v Thomas Michael Kelly July 2002. Queen's Bench Division.

Party time again
The rights - and wrongs?s - of one Construction Act ajudication

A J Brenton supplied and fitted electrical equipment to Lords of Princetown Limited, owned by Jack Palmer.

A fall-out on site culminated in a Construction Act adjudication. The adjudicator decided that Palmer was a party to the contract and ordered him to pay Brenton £26,000 plus fees.

Palmer didn't pay up, so Brenton asked the court to enforce the award in a summary judgment, arguing that he had no defence.

Palmer argued that he owed no money as he was not part of the construction contract - it was his company, agreed, but not him personally. Palmer felt the adjudicator got it wrong and didn't have the power to make that award. Palmer claimed it was invalid.

The court took a look back at a couple of cases. In Macob Civil Engineering v Morrison, the judge had said: "If the adjudicator's decision on the issue referred to him is wrong, whether he erred on the facts, law or procedure, it is still a decision."

"In this case," the court said, "even if he got it wrong, the adjudicator was acting within his powers. His award is valid. Mr. Palmer has no defence and must pay up."

Moral: It's the Adjudicator's shout.

He can pick the party.

Case: A J Brenton T/A Manton v Jack Palmer. January 2001. Technology and Construction Court (TCC).

Hart attacks
North-of-the-border scuffle over Notices of Intention

Hart Builders [Hart] was constructing the Caledonian Village development for St. Andrews Ltd. Hart made a payment application but St. Andrews did not pay. Under the Construction Act, a party cannot do this unless he has first issued an effective Notice of Intention to Withhold.

The parties agreed this applied and that St. Andrews had not issued such a Notice. However, St. Andrews were unhappy about the standard of Hart's work and started a court action for damages.

Hart argued that it had been held that if a claimant can show the sum is contractually due, the absence of a withholding notice protects him from attempts to withhold the money.

The court agreed with Hart.

Moral: The road to payment Hell is paved with bad Notices of Intention.

Case: Hart Builders (Edinburgh) Ltd. v St. Andrews Ltd. August 2002. Sheriff's Court - Edinburgh.

Completion practicalities
Skanska and Anglo bust up over possession

Anglo-Amsterdam was developing an office block in South Gyle, Edinburgh for Guardian Assurance to lease to ICL. Skanska was the design and build contractor. Anglo had modified the CD 81 contract to make the definition of 'Practical Completion' tougher than usual. The job was late and Liquidated Damages were hefty at £20,000 per week.

ICL took the keys on February 12, 1996, while Skanska was allowed in to finish its work as long as it complied with ICL's security. Skanska finished on April 25, and Anglo deducted damages to that date.

Skanska countered, arguing ICL was in possession of the building and that there should be no damages after February 12.

Anglo argued ICL was forced into starting as Skanska was in delay. There was no practical completion and that Anglo, as Employer, did not have possession of any part of the building. The Arbitrator agreed.

On appeal, the court found that ICL did have possession. Anglo was deemed to have had possession since February 12 and was ordered to repay £181K of damages.

Moral: Keep the keys until you get the paperwork.

Case: Skanska Construction (Regions) Limited v Anglo-Amsterdam Corporation Limited. June 2002. TCC.