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Third party people
Galliford employed Michael Heal Associates (MHA) to advise and prepare the detailed design to convert the Wellesly Hotel, Leeds into apartments. MHA forgot to check the adequacy of the existing building. Too late, Galliford realised the existing roof slab would not carry the additional floors. The changes cost Galliford 24 weeks and £2,118,332.

Galliford claimed, but before MHA had paid up, it appointed a liquidator. As Galliford knew MHA had had a professional indemnity insurance policy, it started adjudication proceedings against the insurance company. The insurance syndicate's solicitors conducted MHA's defence. The Adjudicator awarded Galliford £722,586 plus his costs and interest. The syndicate did not pay but Galliford did not apply to enforce the award.

Galliford went to court to assert its rights under the Third Parties Act 1930. The act implies that as soon as the liability was incurred, Galliford obtained MHA's rights against the Syndicate. The court did not agree. It held that the adjudication award was a contractual obligation, not an absolute obligation. Had Galliford taken enforcement proceedings, it might have failed. Its court action was premature. But it could appeal.

Moral: Like an own-brand cola…
adjudication is not quite the real thing
Case: Galliford (UK) Northern T/A Galliford Northern v Markel Capital Ltd, QBD May 2003

National mis-Trust?
In October 1994, the roof of Cliveden House, which is now a hotel, leaked. The National Trust's architect decided the asphalt needed replacing but the work was delayed until November 1995.

Craftsman Charlie Mates, who lived and worked in the grounds but remained an independent contractor, removed the old asphalt and under instruction organised and paid the scaffolder, stonemason and roofer. Mates had worked at Cliveden for years, occasionally paying small contractors and billing the Trust with his mark-up, but there was never a formal contract between him and the Trust.

The new covering leaked and the Trust argued that it had agreed an IFC 84 contract with Mates in an unrecorded meeting sometime in July 1995. Neither the architect nor his assistant could recall the date or location or whether the QS had been there. No one had confirmed the meeting or had sent Charlie Mates an IFC 84 (or other) contract to sign.

The Trust also relied on two letters sent in February 1995 to the scaffolding and the stonemason companies and copied to Charlie Mates. However, these letters were not evidence of what had happened in July, some six months later. With no evidence, the case against Charlie Mates was dismissed.
Moral: Keep notes of meetings
Case: The National Trust Thames and Chilterns Region v (1) Charles Mates T/A CCW Mates Stone Restoration; (2) AJAP Contracting Limited: (3) Grace Construction Products Limited, TCC June 4 2003

Not a clockwork Orange
In December 2001, ABB Limited sub-contracted its mechanical services work at the John Radcliffe Hospital's Trauma Unit to Orange EBS Limited for £98,227. The subcontract was based on DOM/1 and the programme was for two weeks off and 12 weeks on site. By March 2002, Orange had submitted a valuation for £81,399.05.

On May 28 Orange withdrew from site. ABB wrote on July 6 alleging defects in Orange's work, refusing it further admission to site and asking for a final account.

In alleging repudiation, Orange quickly refuted ABB's allegations but it did not submit its account (for £270K) until December 2, with a warning that it intended to refer 'this dispute' to adjudication.

ABB agreed to consider the account but wanted until January 20 to respond, arguing that the long Christmas break had affected its response. Orange would not wait and commenced adjudication proceedings on January 9. The Adjudicator awarded Orange £90,283 + VAT and interest.

ABB refused to pay. Orange sought summary judgment. The judge found that as ABB had repudiated the contract, the DOM/1 complex machinery for agreeing the account no longer existed. There had been a dispute about repudiation on July 6. By Jan 9 sufficient time had elapsed for ABB to have valued the December submission.

ABB was directed to pay.
Moral: Your workload never takes a holiday
Case: Orange EBS Ltd v ABB Ltd, TCC May 22, 2003

Licence to spend money
The BBC wanted to install an integrated access control system across its 57 UK sites driven by central software. It would monitor all personnel movements through controlled doors or barriers and allow for differing levels of access. It also wanted the facility to retrofit asset-tagged hardware and software.

Following extensive negotiations, on March 26, 1999 it confirmed its approval of AC Controls Limited (ACC). ACC started survey and preliminary design work immediately. By June 4, the BBC still hadn't finished its specification so it sent ACC a 'letter of intent' confirming the contract price of £2,545,612 based on an MF/1 contract. ACC was authorised to spend up to £250K pending the final contract. The programme was to be agreed. But by that time, ACC had spent £411K, well above the limit.

The project broke down and ACC claimed a sum of £930K. The BBC counter-claimed £123K for overpayment.

Part of ACC's claim was for the recovery of overheads lost during the slow running of the project and after the BBC's cancellation of the contract. The judge assessed ACC's overhead losses as 30% of the difference between the turnover ACC could have expected and the turnover it had achieved in the period. In total, he awarded ACC £480k for its claims for this and other items.
Moral: Don't slow the project down
Case: AC Controls Ltd v British Broadcasting Corporation, TCC November 2002