Construction Unit Update – June 2024 top five

Here are our top five for June:

1. Conditions precedent (clauses setting out actions that must be done before rights are acquired) can be a thorny issue in construction disputes. A Court of Appeal judgement on 27 June considered the principles relating to conditions precedent in the context of contracts for the sale of secondhand tanker tonnage. The review of the general principles by the Court of Appeal is helpful, if very long. The judgement considers the rule that a party cannot benefit from its own wrong i.e., A should not benefit if it prevents B from complying with a condition B must meet for recovery of a debt from A. The principle is distilled in this part of the judgement:

In my view, the legal basis of the rule is that it represents the presumed contractual intention of the parties. That is a principled basis for it, because in order for it to apply there must be
(1) an agreement capable of giving rise to a debt rather than damages;
(2) an agreement that the debt will accrue and/or be payable subject to fulfilment of a condition precedent; and (crucially)
(3) an agreement that the obligor* will not do the thing which prevents the condition precedent being fulfilled to prevent the debt accruing and/or becoming payable”

(*the party with the benefit of the condition precedent)

In a construction context, this principle means that if the Employer prevents the Contractor from performing a condition precedent that benefits the Employer (or vice versa), the condition precedent may not be enforced. Link to case.

2. High Speed Two (HAS2) Limited (HS2) and the Environment Agency (EA) were in the Technology and Construction Court in June for an EA application for an interim injunction to prevent HS2 continuing “dry dig” earthworks in areas of “poor” status waterbodies in parts of Warwickshire until EA consent was given or the works were permitted by award of an arbitrator.

HS2 acknowledged that EA consent would probably be needed for the later “wet dig”, as this fell within the definition of category 1 specified work in the High Speed Rail (London – West Midlands) Act 2017. HS2 argued that the “dry dig” was not category 1 specified work and could therefore be done without EA consent. The EA considered the “dry dig” risked affecting the groundwater or the conservation, distribution or use of water resources and so needed EA consent or permission by way of an arbitrator’s award. While the court found that the EA’s interests under the Water Environment (Water Framework Directive) (England and Wales) Regulations 2017/407 (WFD) were an asset capable of protection by injunction by the court under the Arbitration Act 1996, the court did not grant EA an interim injunction. The court held that an interim injunction was not necessary to preserve the EA’s assets; the EA had not established that the “dry digs” were likely to affect the EA’s interests under the WFD. The judge observed that it was extremely unfortunate that these two tax payers funded bodies had been unable to resolve the issues and urged them to resolve the issues by arbitration as soon as possible. Link to case.

3. In June we attended the JCT Construction Industry Parliamentary Reception 2024, celebrating the launch of the JCT 2024 editions of the JCT Building Contracts. Of all the standard form construction contracts, JCT and NEC are the ones we use most. We covered the launch of and changes in the 2024 edition of the JCT Design and Build Contract in a previous edition. This has been followed by the new JCT Minor Works Building Contract and the Contract Administration Packs. The new JCT Intermediate Building Contract is expected on 10 July.

4. Our construction unit is based in our Bristol office. It is four years since the statue of Edward Colston was toppled and dropped in the Bristol dock. The Bristol concert hall originally named after Edward Colston has been renamed Bristol Beacon, which aims to become the UK’s first net zero concert hall by 2030. This is a fitting aim in a city now represented by a Green Party MP. In June, at the invitation of the TheBusinessDesk.com, we attended a talk by Louise Mitchell, outgoing Chief Executive of Bristol Music Trust to hear about the challenges and joys of the major construction project for the modernisation of Bristol Beacon and the very important work of supporting music in schools. Forgive the plug, but if you would like to experience the fantastic acoustics of Bristol Beacon, try one of its forthcoming events. – What’s On | Bristol Beacon 

5. It has been quiet on the construction front during the election period, so we finish with some Davies and Partners Solicitors news. In Gloucester, D&P helped organise the Gloucester 10k which took place on 30 June 2024. Bristol and West AC took the top spot – well done. And the news that has been uppermost in our thoughts, in June we mourned the loss of David Bain, a family law solicitor and wonderful colleague. Our obituary is here: In Memory of David Bain – Davies and Partners Solicitors  

If you have any questions about these or other construction matters, please contact Jan Grimshaw on 07702 846850 or jan.grimshaw@daviesandpartners.com

 

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