The Week That Was - 25 February 2022

Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.

Struthers v Davies (t/a Alastair Davies Building)

The Claimants engaged the Defendant to carry out building works at their home which they alleged were defective and incomplete.  The building contract provided that the Architect/Contract Administrator could issue to the Defendant a Notice of Intention to Terminate in certain circumstances and, if the specified default was not remedied in 14 days, the Claimants could terminate the Defendant's employment by issuing a Notice to Terminate.

The Court held that the Notice of Intention issued by the Claimants was invalid as it had not been issued by the Architect/Contract Administrator.  Further, it was not established that a Notice to Terminate had been received by the Defendant.  However, the court held that the Defendant was in repudiatory breach of the building contract and it was accepted by the Defendant that in such circumstances the Termination Notice operated as an acceptance of the repudiatory breach.

A copy of the judgment can be found here. 

£25m tender from Network Rail 

Network Rail has gone out to tender as part of phase four of the South West Rail Resilience Programme. 

The South West Rail Resilience Programme identifies and implements options to improve rail resilience between Dawlish and Teignmouth.  Phase four of the Programme involves cliff resilience works including stabilisations, netting and rock anchors. 

Morgan Sindall are also involved in the Programme and were awarded a £28m contract to build a 209 metre extension of the Parsons Tunnel rockfall shelter. 

To read the full article, please click here. 

Steve Ward Services (UK) Ltd v Davies & Davies Associates Ltd

The Court of Appeal has held that an adjudicator was entitled to his fees after he identified that he lacked jurisdiction and then resigned accordingly. S commenced an adjudication against B concerning construction works that S had completed.  However, the contract was between S and P, not B.  There was also nothing to indicate that P was an agent of B.

The adjudicator asked S and B for an explanation but was not satisfied with their response, and B did not say that B accepted ad-hoc jurisdiction in the absence of being identified in the contract either.  The adjudicator resigned on the basis that he did not have jurisdiction and any decision would be unenforceable because B was not a party to the construction contract.

The Court of Appeal agreed that there was a clear and obvious jurisdictional problem.  Having worked out that the basis on which S had commenced the adjudication was wrong, the adjudicator also had no obligation to consider the likelihood of success.  The adjudicator was entitled to decline jurisdiction and resign; he had reasonable cause to do so.  The adjudicator was also entitled to his fees from S in accordance with the relevant terms and conditions of his appointment.    

A copy of the judgment can be found here. 

£4bn civil engineering frameworks for the UK 

Public sector procurement authority Scape has outlined the timetable for their £4bn civil engineering frameworks.  Notice was submitted on 15 February 2022 and contractors have until 25 March 2022 to answer the Pre-Qualification Questionnaire. 

The frameworks include a £3.5bn framework for England, Wales and Northern Ireland and a separate £750m framework for Scotland and will run for a period of four years from 2023. The frameworks will enable local authorities and public sector organisations to accelerate the delivery of sustainably designed major infrastructure projects with no defined upper limit for project value.  SMEs will sit at the heart of the new frameworks and the successful principal contractor is expected to engage with an extensive supply chain of local businesses.  

Better access for small companies to major public sector contracts is hoped to be one of the benefits of the framework. 

To read the full article, please click here.

Restructuring specialist warns of increase in insolvencies from spring

As government support measures are set to taper off, a senior corporate recovery specialist warns of a "spike from spring" in insolvencies. 

Firms that might have otherwise collapsed in the past two years have survived because of emergency rules preventing creditors from issuing winding up petitions throughout the pandemic. As support is withdrawn, insolvencies are expected to increase but it is unclear whether these will surpass pre-pandemic levels. 

For further information, please click here. 

Thanks to Charlie Underwood, Helen Thomas, Sharona Zovich and Paul Smylie for contributing to this week's edition.

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice.  We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date.  You should seek legal or other professional advice before acting or relying on any of the content