Construction cases advent - vote now

We at AG were feeling feeling festive this advent – I took your nominations for the greatest construction cases of the last 25 years and published them in a daily advent calendar in December.

We have collated the entries below. Which is the greatest construction case of all time? 

Please vote with the case name in comments and we will let you know the winner!

Thanks for participating! 

 Day 1 - S&T v Grove Developments [2018] EWCA Civ 2448

Let's start without nuance with the infamous S&T v Grove Developments in which Sir Rupert Jackson in the Court of Appeal (affirming and clarifying Mr Justice Coulson at first instance) confirmed a true value adjudication could follow a smash and grab, but only once payment had been made.

The ISG v Seevic approach officially abandoned, Grove is likely to shape the approach to technical knock-out and true value adjudications for years to come, while creating as many questions as it answered.

Day 2  - City Inn v Shepherd [2010] CSIH 68

Our second candidate for most interesting / impacting construction case of last 25 years comes from Dr Ian Trushell of GCU. City Inn v Shepherd gets his vote.

This Scottish Inner House decision made clear that extensions of time (under JCT) should be assessed on a fair and reasonable basis, which may require pro-rating an award where two delays had a critical impact, neither dominant, regardless of which was first.

English courts departed from that approach following Walter Lilly v Mackay, marking a significant and unusual Scottish / English divide on an important issue.

Day 3 - Skaska Construction v Egger [2004] EWHC 1748 (TCC)

It's an oldie but a goodie, Alan Whaley of Arcadis nominates the case of Skaska Construction v Egger.

Alan highlights Mr Justice Wilcox's criticism of apparent over-reliance on a software modelling approach as causing a sea-change in delay analysis practice.

The effect has been to ground good delay analysis all the more firmly in evidence-based analysis and the application of judgment based on the available facts.

Day 4 - Hutton Construction Ltd v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC)

Our fourth nomination comes from Mathias Cheung of Atkin Chambers. Mathias knows cases like Tigger knows bouncing, so this one's a serious contender.

Mathias suggests Hutton Construction Ltd v Wilson Properties (London) Ltd. One of Mr Justice Coulson's final TCC decisions, this case made it a lot more difficult (practically and procedurally) for responding parties to resist enforcement of adjudicators' awards by seeking substantive Part 8 declarations, partly reversing the floodgates left open by Caledonian Modular Limited v Mar City Developments Limited [2015] EWHC 1855 (TCC).

In particular, Mr Justice Coulson found that the point to be heard must be short and self-contained and have arisen in the adjudication, must require no oral evidence or elaboration beyond what's possible in the short Part 8 hearing, and must be an issue which it would be unconscionable for the Court to ignore.

Day 5 - Bresco v Lonsdale [2020] UKSC 25

Rhona Wallace of Addleshaw Goddard suggested the very recent Bresco v Lonsdale. It needs no introduction – the Supreme Court confirmed that insolvent parties are not blocked from adjudicating, so no longer can the other party assume there will be no final account or other adjudication coming its way. The English courts, with the recent John Doyle v Erith and Styles & Wood v GE CIF Trustees, have now set to work defining the circumstances in which an award will be enforced.

Few cases have had such an immediate impact on disputes practice than this.

Day 6 - Northern Ireland Housing Executive v Healthy Buildings (Ireland) [2017] NIQB 43

Suzanne Murphy of Addleshaw Goddard's suggestion for most impacting construction case gives Northern Ireland its turn in the spotlight. Northern Ireland Housing Executive v Healthy Buildings (Ireland) is a fascinating case where the Northern Irish High Court grappled with whether the NEC3 compensation event mechanism requires in all instances a prospective assessment of the cost impact of compensation events.

Mr Justice Deeny found not and said where the assessment was not made contemporaneously it would be appropriate to look at evidence of what the consultant actually did in that period. The judge refused to "shut his eyes and grope in the dark" when material was available to show what work was actually done and how much it cost.

Legally questionable? Perhaps, but the common sense approach?

Day 7 - SSE v Hochtief [2018] CSIH 26

Andrew Drennan of HKA proposed the Inner House decision in SSE v Hochtief. This case followed the collapse of the headrace tunnel at SSE's Glendoe hydroelectric scheme, and tested the boundary between design and workmanship ("implementation" of design) under an NEC form combined with fitness for purpose wording. The reasonable skill and care limit was restricted to design and not (as the defect was determined by the majority to be here) in its implementation.

Day 8 - Bouygues v Dahl-Jensen 1 All ER (Comm) 1041

Anne Struckmeier of Addleshaw Goddard chose the case of Bouygues v Dahl-Jensen in which the Court of Appeal confirmed that an adjudicator's award would be enforced even if wrong, if the adjudicator has answered the question asked of him.

Day 9 - Ruxley Electronics v Forsyth [1995] UKHL 8

Our 9th case is from Harriet Di Francesco of Keating Chambers nominating Ruxley Electronics v Forsyth. This is such genius from Harriet, that we were willing to overlook that it's several months outside the 25 year window.

In many respects Ruxley v Forsyth is the ultimate construction case. It's the one every law student knows. It's even got its own Wikipedia page, if not a twitter account.

Yes it's the one about the swimming pool not being deep enough, where it was held that a wronged party cannot insist on its full contractual entitlement if do so would be totally out of proportion to the loss suffered.

Day 10 - Fluor v Shanghai Zhenhua Heavy Industry Co [2018] EWHC 490 (TCC)

Number 10 brings us to Michael King of Driver Trett's suggestion. He would like us to get back to good old quantity surveying practice, if we don't mind.

Michael suggests Fluor v Shanghai Zhenhua Heavy Industry Co in which Mr Justice Edwards-Stuart provided various direction on valuation of overheads. For example, he confirmed that while overhead costs could be claimed in a delay or disruption context, a claimant would be required to show that it had been prevented from undertaking other work, or that its staff would otherwise have been profitably employed elsewhere, which would have contributed towards those overheads.

Day 11 - Rochford Construction Ltd v Kilhan Construction Ltd [2020] EWHC 941 (TCC)

Erika Lukaseviciene put forward the English case of Rochford Construction v Kilhan Construction. This case caused controversy recently in the field of payment notices in construction contracts.

Mrs Justice Cockerill commented obiter that while a due date for a contractual payment could be fixed by reference to an invoice or notice, a final date for payment must be pegged to the due date and be a set period of time rather than relating to a mechanism or an event. The Judge considered that tying the final date for payment to service of an invoice, itself tied to a payment certificate is "impractical".

It's not clear what is impractical about such an arrangement. In fact, the need for an invoice is itself driven by practicality, an expediency swiftly being written out of contracts in the wake of this judgment.

Nonetheless, any case that has the NEC reaching for its drafting pen deserves to be considered suitably "impactful" to make our list.

Day 12 - Macob Civil Engineering vs. Morrison Construction [1999] EWHC Technology 254

Day 12 brings us to Thomas Hurst of Addleshaw Goddard, suggesting a real classic - Macob Civil Engineering vs. Morrison Construction.

Thomas explains its claim to classic status: A shopping centre in Wales was the first project that tested adjudication. The dispute arose in in 1999, the year the new 28-day resolution process was introduced.

Morrison argued that the adjudicator had made a technical error during the adjudication. But Justice Dyson in the TCC ruled that whether the adjudicator had made an error relating to either the facts or the law, his decision was binding. Morrison were ordered to comply until such time the dispute was finally determined/settled by legal proceedings, arbitration or by agreement between the parties.

It was a significant case as it showed the courts would support adjudication. Before this case nobody knew what the courts would do about a process which would result in them having less work!

Day 13 -  ISG v Seevic [2014] EWHC 4007

We couldn't leave out the one and only ISG v Seevic. This case has got to be in with a shout for most impactful construction case of the last 25 years.

Mr Justice Edwards-Stuart was sure that since a contractor’s payment entitlement should get assessed only at the times the contract requires, a failure to serve a payment notice resulting in a potential windfall payment should be the end of the matter. To allow a true value adjudication to follow a smash and grab was undermining the point of the notice requirements entirely.

As much maligned as the decision was, it was driven by tight legal logic. There were of course circumstances which made such a result unjust - as Estura found to its cost when Galliford Try found itself with a ￡4m entitlement, but that was perhaps the lack of foresight of the JCT’s drafting.

Regardless, this case turned adjudication practice on its head for several years. Not until Grove v S&T could the courts arrive at an alternative approach, inventing in the process a groundless hierarchy within the Construction Act.

Day 14 - Henry Boot v Alstom [1999] EWHC 263

Michael King of Driver Trett's second submission was Henry Boot v Alstom [1999] and its follow up Court of Appeal decision. An early case that affirmed the importance of contract rates - referred to as “sacrosanct” - in valuing variations in circumstances where it is reasonable to do so, e.g. where work is of a similar character.

Cases that have guided the valuation process are few and far between - and this was an early one in the life of adjudications and so all the more important.

Day 15 - Makdessi v Cavendish Square Holdings BV, ParkingEye Ltd v Beavis [2015] UKSC 67

No list of top construction cases of the last 25 years would be complete without an entry from Makdessi v Cavendish Square Holdings, as nominated by Sarah Fox of 500 Words Ltd and Ignatios Kranidiotis, Supreme Court Advocate.

In Makdessi, the Supreme Court held that in determining whether a contractual provision was penal, the true test was whether it was a secondary obligation which imposed a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation. This has significantly changed the approach to assessing the validity of liquidated damages provisions in contracts. Previously, the question was whether liquidated damages as set represented a "genuine pre-estimate of loss". Makdessi has made it significantly harder to establish liquidated damages as a penalty and has certainly made its mark on construction jurisprudence as a result.

Day 16 - Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2019] A.C.

Our 16th case, volunteered by Rhona Wallace of Addleshaw Goddard is not strictly a construction case. But it is highly relevant to the topic of informal variation (and waiver) which seems to creep into the great majority of adjudication submissions one way or another.

Prior to the decision in Rock, the weight of authority was that No Oral Modification (NOM) clauses were not effective. However, in Rock the Supreme Court held that the equitable doctrine of estoppel could not be so broad as to destroy the advantage of certainty which the parties stipulated when they agreed on terms including a NOM clause. For a variation to apply there had to be some words or conduct unequivocally representing that the variation was valid notwithstanding its informality, and something more would be required for that purpose than the informal promise itself.

What the "more" is has engaged and entertained practitioners and adjudicators ever since.

Day 17 - Bridgeway Construction Ltd v Tolent Construction Ltd  [2000] CILL 1662

Number 17 is a sentimental one for me as it's the first construction case I recall writing about. The infamous Bridgeway v Tolent gave judicial approval for what became known as "Tolent clauses" - clauses seeking to pre-determine which party shall bear the other party's costs of adjudication.

Such clauses were considered an access to justice issue, i.e. where one side could be made to bear the costs of adjudication regardless of success this could make adjudication not worth the effort, especially on smaller value contracts.

While in Yuanda v WW Gear Yuanda (UK) Co Ltd v WW Gear Construction Ltd [2010] EWHC 720 (TCC), Mr Justice Edwards-Stuart refused to enforce an extreme example of such a clause, it took parliament to legislate such clauses out of existence in the revised Construction Act, but even then loose draftsman ship created ambiguities.

Any case that gets a clause named after it and requires us to root around in Hansard to see if its effects lingered must be a contender for top case of the last 25 years....

Day 18 - Walter Lilly v Mackay [2012] EWHX 1773

If our top construction cases list were a fake US election, Walter Lilly v Mackay would be Arnold Vinick three months out.

It has almost everything - concurrent delay, assessment of relevant events and matters, global claims. Concurrent delay? Have a full EOT. Global claims? Yes, but treat with caution. Notification issues? Approach them commercially.

Is this the top construction case of the last 25 years? Or is there a Matt Santos ready to claim victory at the eleventh hour? And which case does that make Baker, Hoynes and Russell?

Day 19 - Abbey Developments v PP Brickwork [2003] EWHC 1987

Number 19 brings us to Abbey Developments v PP Brickwork, as suggested by Sarah Fox.

Another excellent suggestion by Sarah - this case dealt with the topic of omission of work and has shaped behaviour on omissions ever since. It is also topical, the Scottish courts having recently followed its guidance in Van Oord v Dragados.

In short, it is authority that while there is nothing in principle to stop a contract allowing work to be omitted and given to another, for such an act to be legitimate (rather than a breach of contract potentially entitling the innocent party to reimbursement for lost profits) then reasonably clear words would be required. Plenty more than that is said and the judgment invites a read even today.

 Day 20 - homer Burgess v Chirex [1999] ScotCS 264

We have given Anne Struckmeier another of her suggested cases. And that is the 1999 case of Homer Burgess v Chirex, in which Lord MacFadyen gave a far sighted judgment signalling early support for and regulation of adjudication.

In particular, Lord MacFadyen in the judgment makes clear that the court should be able to apply its mind to and freshly hear at enforcement an adjudicator's decision as to his or her jurisdiction (whether a factual or legal point).

He recognises the need to balance quick resolution of disputes, as the process intended, and judicial scrutiny of the procedural aspects. He says: "In coming to that conclusion, I bear in mind that the policy of the legislation is to prevent payment being delayed by lengthy dispute resolution procedures. I bear in mind, too, that the item-by-item approach to whether disputes are within the adjudicator's jurisdiction [necessary due to the drafting of Section 104(5) of the Construction Act] may make jurisdictional disputes quite common. These considerations do not, however, in my opinion justify allowing decisions which are truly beyond the powers of the adjudicator to take effect and be enforced as if they were within his powers". And so it has proved since!

Day 21 - Triple Point v PTT [2019] EWCA Civ 230

It's time to talk Triple Point, as per Ignatios Kranidiotis's suggestion. No list of top construction cases could exclude Triple Point v PTT. We have perhaps found our Matt Santos.

Triple Point upset the orthodoxy on liquidated damages, followed even by the trial judge Mrs Justice Jefford, which was that liquidated damages apply up to a termination, general damages beyond.

Sir Rupert Jackson in the Court of Appeal disagreed and on a construction of the relevant clause found that it did not apply to a situation in which completion never occurred, and so general damages replaced LDs. In so finding, he was clear that he was not re-inventing the judicial wheel. In fact, recent cases had ignored or insufficiently considered an earlier House of Lords decision (Glanzstoff) which he felt bound to follow.

It is a difficult issue - this decision removes the certainty of LDs which both parties signed up to and probably implemented pre-termination. On the other hand, LDs may not accurately capture termination-type losses.

Whatever one's views on the merits, the case has generated voluminous articles and upset the status quo, and so merits serious consideration for top case.

Day 22 - Carillion v Blyth & Blyth [2001] ScotCS 90

Anne Struckmeier's third and final submission for top construction case concerned a leisure development at Fountainbridge, Edinburgh.

Lord Eassie caused a stir by telling everyone they'd had their law (or at least their drafting) wrong on novation for ages, thanks very much.

In short, Lord Eassie held that a particular novation agreement had the effect of assigning to Carillion a claim that otherwise the employer could have enforced, but in those circumstances only the employer's loss was recoverable, not loss suffered by Carillion as a result of the breach. This caused considerable concern in the industry, and led to a rethink of standard novation drafting.

A case with a big practical impact, thus deserving of a shot at top spot.

Day 23 - Midlothian Council v Blyth & Blyth [2019] CSOH 29

It would be remiss in thinking of impactful construction cases to leave out the infamous Midlothian Council v Blyth & Blyth. We have found our John Hoynes.

Lord Doherty (applying Gordon's Trustees) caused huge upset to the assumed position on prescription of claims band in particular the proper interpretation of Section 11(3) of the Prescription and Limitation (Scotland) Act 1973 by which the 5 year period for prescription may be postponed where the innocent party is not aware it has suffered loss.

Lord Doherty held that loss was suffered as soon as the Council accepted and acted upon allegedly negligent advice, since the development was "fated to be defective" and the expenditure involved in constructing the development was wasted. The Council's awareness that it was incurring an expenditure was enough for the purposes of Section 11(3) - even though it only knew it to be wasted with the benefit of the hindsight.

This case and others like it all but stripped Section 11(3) of any usefulness, and others have been attempting to row back from this position since.

Certainly an impactful, if contentious, decision.

Day 24 -Ampleforth Abbey Trust v Turner & Townsend [2012] EWHC 2137

It seems fitting to end with an ode to the humble contract, as proffered by Sarah Fox.

In this case, the judge considered it negligent for a project manager to rely on multiple letters of intent, rather than a formal building contract which would have properly protected the employer's interests (including by way of liquidated damages provisions).

It was held that the project manager had failed to appreciate the importance of a formal, signed contract. Mr Justice Keyser QC said:

"The execution of a contract is to be seen not as a mere aspiration but rather as fundamental. It is the contract that defines the rights, duties and remedies of the parties and that regulates their relationships. ... [the] elaborate nature [of standard forms] reflects the complexities of the projects to which they relate and attempts to address the many and varied problems that can arise both during the execution of the works and afterwards."

Well done for making it to the end - now time to vote thanks