Hillcrest Homes Ltd v Beresford and Curbishley Ltd

JurisdictionEngland & Wales
JudgeJudge Raynor
Judgment Date07 February 2014
Neutral Citation[2014] EWHC 280 (TCC)
Docket NumberCase No: 3MA50102
CourtQueen's Bench Division (Technology and Construction Court)
Date07 February 2014
Between:
Hillcrest Homes Limited
Claimant
and
Beresford and Curbishley Limited
Defendant

[2014] EWHC 280 (TCC).

Before:

His Honour Judge Raynor QC sitting as a judge of the High Court

Case No: 3MA50102

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

MANCHESTER DISTRICT REGISTRY

TECHNOLOGY AND CONSTRUCTION COURT

Manchester Civil Justice Centre

Ms Serena Cheng (instructed by DWF LLP) for the Claimant

Mr Patrick Clarke (instructed by Pinsent Masons LLP) for the Defendant

Hearing dates: 11 and 16 December 2013

Judge Raynor QC

1

The Claimant ("Hillcrest") is a property developer. The Defendant ("B&C") is a building contractor.

2

By a Design and Build Contract in the JCT Standard Form (2005 Edition, Revision 2, 2009) ("the Building Contract") B&C agreed with Hillcrest to undertake the design and construction of a substantial residential property at Sleepy Hollow, Castle Hill, Prestbury in compliance with the contract documents including the Employer's Requirements referred to below.

3

The Structural Engineers, who were appointed by Hillcrest for the purposes of the Development prior to the making of the Building Contract, were Howard Taylor Associates ("HTA").

4

In this action brought under the Part 8 procedure, Hillcrest claim

a. declarations that the decision of the Adjudicator appointed to determine an adjudication commenced by Notice of Adjudication dated 14 November 2012 is unenforceable for reasons stated hereafter; and

b. the Court's final determination that a novation agreement signed by HTA on 26 November 2012 ("the Novation Agreement") is, or is to be treated as, binding upon Hillcrest and B&C; and

c. an order that B&C pay damages for what is alleged to be a breach of contract committed by referring to adjudication disputes which are said to have been outwith the ambit of the adjudication provisions of the Building Contract.

The Factual History

5

By letter dated 8 July 2010, HTA confirmed that their fee for the structural design work in connection with the Development up to Building Regulations application stage would be £4,000, which fee would include all necessary meetings and site visits during the course of the project. That letter was described as a "Fee proposal" in the Employer's Requirements, and it is common ground that that proposal was accepted by Hillcrest and that, as stated, HTA were duly appointed as Structural Engineers for the purposes of the development.

6

The Employer's Requirements were prepared by the Vinden Partnership ("Vinden"), Construction Contract Consultants, in October 2010 and were supplied to B&C.

7

So far as material Section 1.6 of the Employer's Requirements contained the following terms:

1.6 Design Responsibility

1.6.1 The Contractor shall note that the whole of the works fall within his design responsibility, including work originally commissioned by the Employer, and he will be required to obtain all statutory approvals and meet any additional requirements set out in the Employers' Requirements.

1.6.3 The Contractor shall appoint Consultants and specialist sub-contractors as he requires for the design of the works and shall ensure that a collateral warranty in respect of each is provided to the Employer and potential lender/purchaser.

1.6.5 Appointment of Howard Taylor Associates – Structural Engineers

1.6.5.1 The Employer requests and requires that the pre-tender Structural Engineer, Howard Taylor Associates, should be retained and appointed to the successful Building Contractor to continue and complete any necessary design work required….

1.6.5.3 The Structural Engineer shall be novated to the Contractor in accordance with the draft Novation Agreement included in Appendix F. Novation shall occur on execution of the Building Contract

1.6.5.4 The Contractor shall liaise with Howard Taylor Associates and establish the extent of the works being provided. Any works required by the Contractor in addition [to] that provided as part of the Employer's Requirements shall be identified and notified to the Employer."

8

The draft Novation Agreement annexed as Appendix F was (so far as material) in the following terms:

"THIS AGREEMENT

Is made the day of 2010

BETWEEN

(1) [ ] whose registered office is situated at [ ] ("the Employer"); and

(2) [ ] whose registered office is situated at [ ] ("the Contractor"); and

(3) [ ] whose registered office is situate at [ ] ("the Consultant")

WHEREAS

A. The Employer has appointed the Consultant to provide (set out type of services being provided e.g. architectural) services ("the Services") by an agreement dated [ ] ("the Appointment").

B. The Employer has appointed the Contractor under a contract ("the Design and Build Contract") of even date herewith to design and construct certain works as therein described ("the Project").

C. The Employer has agreed to assign to the Contractor by way of novation its entire benefit, rights and interest in and under the Appointment and the Consultant has agreed to enter into this Agreement for the purpose of giving its consent to such assignment

IT IS HEREBY AGREED as follows:

1. Novation

1.1 The Employer as beneficial owner hereby assigns to the Contractor its entire rights, benefits, liabilities and obligations under and pursuant to the Appointment including but without limitation, its accrued rights, benefits, liabilities and obligations subject to Clause 1.4

1.2 The Consultant undertakes to perform the Appointment and to be bound by its terms in every way as if the Contractor were, and had been from the inception, a party to the Appointment in lieu of the Employer. The Contractor agrees that he will not hereafter terminate the Consultant's engagement under the Appointment without prior written consent of the Employer, such consent not to be reasonably withheld or delayed.

1.3 The Contractor undertakes to perform the Appointment and to be bound by its terms in every way as if the Contractor were, and had been from the inception, a party to the Appointment in lieu of the Employer…."

9

There is in fact, although not raised by Hillcrest in the Particulars of Claim, an issue between the parties as to whether it was a term of HTA's appointment with Hillcrest that HTA would when required execute the Novation Agreement. In order to avoid an adjournment of the trial, it was agreed by the parties at the commencement of the trial that I should proceed upon the basis that no such obligation was secured by Hillcrest, although the latter reserved the right to make an application to amend its Particulars of Claim prior to the perfecting of any order following the handing down of the judgment in draft. As will appear, on the basis of my conclusions the issue of whether there was such an obligation is not determinative of the decision as to whether there has been an effective novation.

10

On 5 November 2010 B&C submitted its tender based on the Employer's Requirements.

11

On 17 November 2010 there was a tender review meeting attended by representatives of the parties and Vinden, and the minutes recorded the fact that Hillcrest was "satisfied that all design works [were] to be completed as part of the design teams pre-contract appointment" and that accordingly allowances for fees to be paid to the Consultants (including HTA) by B&C could be removed from its Contract Sum Analysis.

12

Although the Building Contract was not concluded until later, a contract start up meeting took place on 7 February 2011 attended by (among others) Paul Collings of Vinden, representatives of Hillcrest, Paul Adams, an Estimator and Quantity Surveyor acting for B&C, and Michael Taylor, the principal of HTA.

13

The minutes of the meeting included the following:

Action

2.5.5 The design team (Architect, M&E consultant and the Structural Engineer) are to be novated and collateral warranties provided.

PA

2.5.6 TVP to distribute electronic draft novations and collateral warranty details to B&C and the design team for consideration and execution

PC/PA

14

"P A" and "P C" are respectively Mr Adams and Mr Collings.

15

Notwithstanding the start up meeting and the commencement of work on or about 14 February 2011, issues remained to be resolved between Hillcrest and B&C before the Building Contract could be concluded.

16

Further site meetings attended by (among others) the persons named above took place on 24 March 2011 and 28 April 2011, it being recorded in the minutes that B&C were to prepare novations and collateral warranties for HTA (and the other members of the design team).

17

It is common ground between the parties that the Building Contract was made in or before May 2011.

18

The following terms of the Building Contract are material

a) Article 7: Adjudication provided "If any dispute or difference arises under this Contract, either party may refer it to adjudication in accordance with clause 9.2" (which provided that if a dispute or difference arose under the Contract which either party wished to refer to adjudication, the provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1998 applied subject to qualifications which are not material for present purposes)

b) Clause 1.1 defined "Contractor's Persons" and "Employer's Persons" as follows:

"Contractor's Persons:

the Contractor's employees and agents, all other persons employed or engaged on or in connection with the Works or any part of them and any other person properly on the site in connection therewith, excluding the Employer, Employer's Persons and any Statutory Undertaker

Employer's Persons:

all persons employed, engaged or authorised by the Employer, excluding the Contractor, Contractor's Persons, and any Statutory Undertaker but including any such third party as is referred to in clause 3.15.2."

c) It is pertinent to note that Article 8 of the Building Contract (providing for arbitration),...

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3 cases
2 books & journal articles
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    • Construction Law. Volume I - Third Edition
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    ...Hillas & Co Ltd v Arcos [1932] All ER 494; (1932) 147 LT 503 I.2.67, I.3.161 Hillcrest Homes Ltd v Beresford & Curbishley Ltd [2014] EWHC 280 (TCC) III.24.21, III.24.28 Hillcrown Pty Ltd v O’Brien [2011] QCA 129 I.3.197, II.9.156 Hills Contractors & Construction Ltd v Struth [2013] EWHC 169......
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    ...v W Maher & Sons Ltd [2016] EWHC 1148 (TCC) (as Sir Robert Akenhead). hat said, in Hillcrest Homes Ltd v Beresford & Curbishley Ltd [2014] EWHC 280 (TCC) at [47]–[52], Judge Raynor QC took an approach similar to that of HHJ LLoyd QC, although his Lordship was not referred to the decisions o......

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