Acting for the successful Claimant Reinwood Ltd where the House of Lords considered the issue of whether the cancellation of the certificate of non-completion under Clause 24 (of the JCT 98) by the grant of an extension of time had the effect that the employer could no longer justify a deduction of liquidated damages. Upholding the decision of the Court of Appeal, the House of Lords held that the employer’s right to deduct liquidated damages was not lost by the grant of the extension of time even if its effect was to cancel the certificate of non-completion. The cancellation of the non-completion certificate did not have retrospective effect and the employer was therefore entitled to rely on that certificate.
Acting for the successful Defendant Simon Carves Ltd where the Court of Appeal took the opportunity to clarify the law in relation to equitable set-off in response to a claim brought by Geldof who had separate unrelated sub-contracts with the Defendant contractor Simon Carves Ltd for both sub-contract works and the supply only of other materials on the same project. The Court of Appeal held that the Defendant was entitled to set-off a counterclaim it had against Geldof for the correction of defective works under the sub-contract against a claim brought by Geldof for non-payment under the supply contract, because it would otherwise be inequitable to consider one claim without the other where, in this case, the contracts were so closely related.
Acting for Ibstock Brick Ltd in the Part 19 proceedings instigated by McAlpine against thirty two of its sub-contractors in response to Panatown's claim for damages in respect of defective works. The McAlpine's appeal was allowed. The Court of Appeal held that since the employer was not party to the original contract, they had no grounds to seek damages for delay and defects, especially where the terms of the duty of care deed had already been exercised. The employer had suffered no financial loss so could not claim more than the nominal damages that were already determined by the duty of care deed.
Howard Cornes - Consultant Solicitor
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