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Mowlem has to share Bath
The City of Bath won an £8 million Millennium Lottery grant to refurbish the Heritage Spa and Pools. It employed Mowlem on a JCT 1998 with a 2002 date for completion. The project ran late, and by mid-2003 the new pool paintwork was found to be defective. Bath blamed Mowlem's work. Mowlem blamed Bath's design. The cause is still unknown.

In August 2003 Bath issued an Architects Instruction (AI) telling Mowlem to remove the pool paint. Mowlem refused. Bath gave Mowlem seven days' notice to comply, after which Bath sent in Warings to do the work.

Mowlem refused Warings access. It then offered to do the work itself, as a variation and without prejudice to liability. In October, Bath got an injunction preventing Mowlem from stopping Warings from working. Mowlem appealed, arguing that if it was in the wrong about the paint, then liquidated damages of £12,000 per week would recompense Bath.

However, the Court of Appeal found that Bath had additional costs plus the loss to the city's tourist trade; losses which could not be reclaimed from Mowlem. The Court upheld the injunction.

Moral: If you do not proceed, others might succeed
Case: Bath and North-East Somerset District Council versus Mowlem plc, CA February 2004

Slippery when wet
One wet May morning in Sheffield, William Roe was driving down Norton Avenue, where new tram tracks had been laid in the outer lane. The tracks were the same distance apart as his car wheels and stood slightly proud of the surface. His wheels caught and, as he braked, the tyres slid along the rails and then slipped off onto the adjacent concrete. The car twisted, he lost control and received serious injuries when he crashed into a cable support pole.

He sued, variously alleging breach of statutory duty, breach of a duty of care in permitting the rails to stand proud of the road and/or failing to apply a high friction coating and/or to erect warning signs.

During the cases, the common law claims against Sheffield City Council were cancelled and those against Balfour Beatty were thrown out completely.

In Roe's appeal, the court noted that Sheffield had been involved in the design and therefore owed a general duty of care. In addition, as Balfour Beatty had held itself out as being responsible for the road infrastructure and for ensuring complete traffic safety between the Supertram and other road users, then it too had a case to answer.

Moral: Design responsibility is extensive
Case: William Roe versus Sheffield City Council; South Yorkshire Light Rail Ltd; South Yorkshire Supertram Ltd; Balfour Beatty Power Construction Ltd. CA, March 2004

Win some – don't lose some
Earls Terraces Properties (ETP) employed architect Nilssons in 1994 on a project to develop 25 Grade II Georgian houses in Kensington. It was a substantial scheme which included 76 underground parking spaces and a basement for each house.

In June 1998, 11 houses were found to have damp basements. The cause was wrongly laid Bentonite membrane, insufficiently high upstands and badly filled concrete joints. It took 15 months to locate and rectify the faults.

ETP's damages claim included £5,981,240 interest calculated at 2% over bank base rate. Nilsson objected as ETP had not actually had to pay that interest. ETP's parent company had created it solely to develop the houses and had supplied most of the funding interest-free. Furthermore, as the price of houses had risen during the 15 months, that gain should be deducted from any interest payable.

The court considered the interest-related part of the claim first. It concluded that as long as ETP could show it had incurred a loss it could use a reasonable rate of return in the calculations. The house price rise was due to external factors and not connected with the cause of delay.

Moral: Damages must stem from the event
Case: Earl's Terrace Properties Ltd versus Nilsson Design Ltd, Charter Construction plc. TCC, February 2004

Double or quits
Adrian Smith and Stacy Hill wanted to sell their flat in Leytonstone. They signed a sole agency agreement with Bairstow which set the commission at 1.5% of the sale price (plus VAT) if they paid within 10 days of the sale, or 3% if payment was later than this under an 'Early Payment Discount' scheme.

The sale was agreed and completed at £166,000 on July 25, 2002. At 1.5% Bairstow was entitled to commission of £2,925.75 including VAT.

Smith and Hill's solicitor Darlingtons had instructions to pay Bairstow, but for an inexplicable reason paid only £2,538, leaving a £387 shortfall.

On November 2, Bairstow claimed the standard commission rate of 3% with an outstanding balance of £3,312.75, but at the same time made it clear that if the £387 were paid within 10 days, then it would not seek to recover the 3% commission rate.

No payment was made and Bairstow commenced proceedings, arguing that pricing was exempt under section 6(2) of the Unfair Terms in Consumer Contracts Regulations 1999. The regulations aim to protect consumers, however section 6(2) of the regulations says that price is exempt from the fairness test.

The court held that as price is key to all contracts, section 6(2) must be inapplicable, otherwise the Consumer Regulations would have a gaping hole. The doubling from 1.5% to 3% imposed a disadvantageous burden on the vendors. Bairstow lost.

Moral: Law protects consumers
Case: Bairstow Eves London Central versus Smith and others, Darlingtons (Part 20 Defendants) EWHC 263 (QB). February 2004