Manual of Construction Agreements


Issue 31
April 2020

Note to customers

You may notice some changes to the look and numbering system of the pages of your latest looseleaf release, and the issue may be larger than an average update. We are in the process of standardising the look and feel of Jordan Publishing titles to align with other publications in the LexisNexis portfolio and will be releasing larger chunks of content until the entire looseleaf has been published in this new format. Rest assured, issues will remain comprehensive and up to date during this standardisation process and the cost of any increase in extent as a result of the transition will not be passed on to you.

In this issue we have made update amendments to reflect the recent Court of Appeal judgment in Civil Aviation Authority v R Ltd which held that a claim for legal advice privilege does require the party claiming the privilege to show that the relevant document or communication was created or sent for the dominant purpose of obtaining legal advice. This decision clarifies what was previously an uncertain position on the authorities in this jurisdiction and brings the English courts into line with the established approach of other common law jurisdictions, including Australia, Singapore and Hong Kong. We also look at refinements on the interpretation of contracts: in Manchikalapati v Zurich Insurance plc (t/a Zurich Building Guarantee & Zurich Municipal), the Court of Appeal construed a policy of defects insurance of a new-build property. The Court of Appeal referred to the case of Cornish v Accident Insurance Co Ltd (1889) 23 QBD 453, where it was held that: ‘… in a case of real doubt, the policy ought to be construed most strongly against the insurers; they frame the policy and insert the exceptions. But this principle ought only to be applied for the purpose of removing a doubt, not for the purpose of creating a doubt, or magnifying an ambiguity, when the circumstances of the case raise no real difficulty.’ However, in Manchikalapati, the Court of Appeal said there were ‘real doubts’ and ambiguities such that the court could take ‘assistance from the surrounding provisions of the contract’ and have regard to its obvious commercial purpose.

In the context of the Construction Act, we have looked at Universal Sealants (UK) Ltd (t/a USL Bridgecare) v Sanders Plant and Waste Management Ltd which looked at the definition of ‘construction operations’. The party resisting enforcement argued that the Act did not apply because the delivery of concrete falls within the exception in s 105(2)(d) of the Act. Placing of concrete could fall within the definition of ‘construction operations’. However, there is further an exclusion from the meaning of construction operations in s 105(2). Sub-paragraph (d) excludes from the meaning of construction operations ‘manufacture or delivery to site of—(i) building or engineering components or equipment, (ii) materials, plant or machinery,…except under a contract which also provides for their installation.’ The court held that the word ‘installation’ must connote some work done to the materials after delivery.

In the context of statutory adjudication, we have picked up Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd which looked at breach of natural justice. The adjudicator on being appointed wrote to the parties confirming acceptance of the appointment. Paragraph 14 of the ‘Terms and Conditions of Appointment’ stated: ‘If I require quantity surveying input during the Adjudication I will utilise the resources of […]. This matter is at my absolute discretion and I will not require the consent of the parties.’ However, the court did not think that paragraph 14 communicated an intention to employ QS assistance. The judge ‘inclined’ to the view that even if the assistance provided by the surveyor was merely clerical and administrative, natural justice required (i) that the adjudicator ought to have told the parties that the surveyor had been engaged; and (ii) that while detailed disclosure for comment would not have been necessary, the adjudicator ought to have indicated (in brief, broad terms) just what it was that the surveyor was doing. The case provides a tangible warning to adjudicators. There is a warning too to those who instruct and act as expert witnesses: in Ashley Wilde Group Ltd v BCPL Ltd, the judge explained that Guidance for the Instruction of Experts in Civil Claims 2014 at tells us that: ‘Experts must provide opinions that are independent, regardless of the pressures of litigation. A useful test of independence is that the expert would express the same opinion if given the same instructions by another party. Experts should not take it upon themselves to promote the point of view of the party instructing them or engage in the role of advocates or mediators.’ In Ashley Wilde, one of the experts was originally asked to provide an informal opinion based on instructions, which asked the expert only to look at similarities which were supportive of the client’s case and not differences which might undermine that case. The judge highlighted that the expert should have recognised the difficulties of moving from a role in which he was specifically asked to identify evidence that supported one party’s case, to a role as a court-appointed independent expert with requirements of impartiality and objectivity, if necessary starting the analysis afresh. That would have established compliance with the duties owed to the court.

We have also updated sections dealing with nuisance following the Court of Appeal’s decision in Fearn v The Board of Trustees of the Tate Gallery which looked at the common law cause of action for private nuisance. The latest position can be broken down into the following points: (i) a private nuisance is a violation of real property rights, (ii) private nuisance is can be broken down into different categories, nuisance by encroachment on a neighbour’s land, nuisance by direct physical injury to a neighbour’s land; and nuisance by interference with a neighbour’s quiet enjoyment of his land, (iii) proposition that damage is always an essential requirement of the cause of action for nuisance must be treated with considerable caution, (iv) nuisance may be caused by inaction or omission as well as by some positive activity, and (v) the broad unifying principle in this area of the law is reasonableness between neighbours.


 Hamish Lal B Eng, BA (Oxon), PhD, Partner, Akin Gump Strauss Hauer & Feld, Adjunct Professor, University College Dublin (UCD) Sutherland School of Law Author
 Jane Stubbs LLB Hons, Solicitor of the Senior Courts of England and Wales; Consultant, Addleshaw Goddard Author