Gama Aviation (UK) Ltd v MWWMMWM Ltd [2022] 4 WLUK 364
Facts of the case
The defendant entered into an Aircraft Support Services Agreement (ASSA) with Claimant 2 for the claimant to provide operational and maintenance services for the defendant’s aircraft. In the agreement existed a clause stating; “This agreement shall commence from the date of this agreement and shall subject to clause 9 continue until such time as either party gives the other not less than three months’ notice in writing of termination of this agreement”. Claimant 2’s parent company was subsequently bought out by Claimant 1’s parent company and the company of Claimant 2 was wound down in 2017. Claimant 1 continued to perform the contract in place of Claimant 2, and received payment for said services under the contract, until January 2019 when the defendant ceased to pay Claimant 1 for their services.
Issues
Claimant 1 held the position that they replaced Claimant 2 as a party to the agreement by an implied novation, and filed a claim to recover charges under the agreement via summary judgement. The defendant claimed that the express terms of the ASSA prevented the implied novation as no such written consent had been supplied.
Judgement
The judge found that summary judgement was applicable and that novation had occurred, as the defendant had encouraged Claimant 1 that it was subject to the agreement, and Claimant 1 provided those services, incurring expenses in reliance on the terms of that agreement. The Claimant was entitled to recover charges properly payable under the terms of the agreement.
In an addendum to case, HHJ Kramer added consideration to the judgement. In citing the Supreme Court in Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, HHJ Kramer acknowledged that there is usually the requirement within the law for contract formalities for variation or termination to be upheld. It was considered that the relevant clause of the agreement had two opposing meanings; that it either applied only to unilateral termination, or that it created an explicit means for termination, preventing termination by implied novation completely.
The judge favoured the view that the clause only applied to unilateral termination and where both parties agree to termination it is illogical for a requirement of three months’ notice to do so. Therefore, as the contract contained no formalities for termination by agreement there was no bar to termination by informal novation. In payment of Claimant 2’s invoices, the defendant had encouraged Claimant 2 to believe it was contracting with the Defendant, creating a reliance in providing services and incurring expenses.
Whilst this judgement is obiter, this is an example of judgement considering Lord Sumption’s estoppel reasoning in Rock Advertising. HHJ Kramer considered that the customer was estopped from relying on the clause entirely.
Advance JV (A Joint Venture Between Balfour Beatty Group Limited, MWH Treatment Limited) v Enisca Limited [2022] EWHC 1152 (TCC)
Facts
- An adjudicator decided that the Claimant, Advance, had not issued a valid pay less notice against the Defendant;
- The contract allowed the Claimant to issue a pay less notice 7 days before the final date for payment with the amount they consider to be due and how that sum was calculated;
- A Pay Less notice was sent by Advance in relation to payment cycles 24 and 25, one day before the deadline to provide a PLN.
Judgment
- The Court held that when reviewing a notice and its validity, the following must be considered:
- How a reasonable person may view the notice (and not the subjective view of the person receiving it);
- The context in which the notice is given in (i.e. in light of the project, the contract, etc.);
- The Court will take a practical view, and will not try to find a notice invalid unless it is necessary;
- Valid notices must comply with the requirements of the Construction Act 1996 and the contract;
- A notice must clearly set out the sum which is due and the basis on which it is calculated;
- The notice should be free from ambiguity;
- A pay less notice does not need to state it is a pay less notice but must have the substance of a PLN.
- The Judge found that a pay less notice must make reference to a specific payment cycle. I.e. a payment notice cannot attempt to deduct sums from another payment cycle and it must refer to the details relevant to that payment cycle (such as amount applied for, etc.);
- A Pay Less notice must refer to the ‘notified sum’ which it is paying less from.
- In this case, the Judge found that the PLN issued was valid against payment application 25 (as it referred to this application and the sums under it) but not under application 24 as it did not refer to application 24 in any way.
Evolve Housing and Support v Bouygues (UK) Ltd & Ors [2022] EWHC 906 (TCC)
Facts
The Claimant (Evolve) is a charity and appointed a design and build contractor (the First Defendant), to design and build a new hostel in Croydon, under a contract dated 28 February 2011. The Claimant appointed PRP (the Second Defendant), as the Employer’s Agent during the project, and an architect (the Third Defendant) was also appointed.
The First Defendant commenced works in March 2011 and completed works a year later, in March 2012. However, the Claimant alleged there were defects relating to fire safety in the external walls of the property, and issued claims against the three Defendants, on the basis the work was not carried out in accordance with the contract and did not comply with the requirements. As a result, this required the cladding systems to be entirely replaced.
Issues
In April 2021, the Third Defendant issued several requests for information to the Claimant regarding the claims for negligence. The Third Defendant argued the allegations were vague and were attributably to the First Defendant, as opposed to them.
The Claimant responded to the request for information in May 2021, stating they were unable to provide a detailed summary of the allegations without being provided further information from the Third Defendant (e.g. property designs and inspection records).
The Third Defendant subsequently sought a court order requiring the Claimant to provide the information requested.
Was the Claimant required to respond to this initial request?
Judgment
The judge ordered the Claimant to provide the Third Defendant with the information requested, to enable the Third Defendant to carefully consider the allegations made against them.
The fact that the Claimant required design information and inspection records was not as important, and the Claimant was ordered to rely on the documents and information provided to date. However, this did not undermine the Claimant’s position, and the Claimant had the right to rely on further information as it became available at a later date.
New month, new…Act – The Building Safety Act 2022
So what exactly is it?
Following recent incidents concerning the safety of residents in defective buildings, the Building Safety Act has been introduced to increase the obligations on those carrying out works lawfully and protect the safety of parties occupying certain properties.
Who does it affect?
Multiple parties, including but not limited to developers, employers, designers, consultants, landlords and tenants of residential buildings.
What are the key provisions to be aware of?
- The new gateway system – this comprises of 3 gateways (planning, pre-construction and post-completion), the requirements of which need to be complied with before a building is occupied.
- The limitation period to pursue a claim has been extended to 15 years, rather than 6 years. Where the claim concerns cladding works, this has been increased to 30 years.
- All new build homes are to be protected by a 15 year warranty.
- The importance and responsibilities of a building safety regulator (overseeing safety standards, encouraging improvements regarding the industry’s competency and implementing framework)
Please note, these updates are for educational purposes only and should not be relied on as legal advice. Barton Legal do not make any representations as to the legal validity of them and any claims that this is legal advice will be unsubstantiated.
