Posts Tagged ‘specialist’

Suspending performance v repudiatory breach

October 21, 2010

When there is no other choice – wrongful suspension: the consequences of repudiatory breach

Contractors need to be careful that they suspend performance of their works on proper grounds and ensure that they do so in the correct procedural way. A timely reminder as to the consequences of getting it wrong can be found in the recent case of Mayhaven v DAB [2010].

The question facing the court was whether the effect of the contractor wrongfully suspending its works amounted to a repudiatory breach of contract. This would entitle the employer to terminate the contract and sue the contractor for damages or, alternatively, force the contractor to perform its services. In this case, the court decided that wrongful suspension did not automatically constitute a repudiatory breach. Why is that the case? Because it is only fair that a party be penalised when the breach is sufficiently serious so that he “so acts or so expresses himself as to show that he does not mean to accept the obligations of a contract any further”.

The court did not accept Mayhaven’s submission that a wrongful suspension, which gave rise to a failure to proceed regularly and diligently under an express term of the contract, would necessarily amount to a breach of a condition or fundamental term so that every such breach would amount to a repudiatory breach of contract. It would be a matter of considering the seriousness of the breach and the facts and circumstances of the case. DAB’s mistake as to its legal entitlement to suspend the contract was merely one of several factors to consider when determining whether the suspension amounted to repudiation.

Unless there is an express refusal to operate the terms of the contract, the court will ask itself whether the defaulting party’s actions were such as to lead a reasonable person to conclude that it no longer intended to be bound by the contract in the circumstances. A breach of contract will be considered repudiatory where:

1. the parties have agreed that any breach of a particular contractual provision will entitle the other party to end the contract; or

2. where there has been a fundamental breach of contract so that the innocent party is denied a substantial amount of the benefit of the contract. The right to suspend at common law is limited to very narrow circumstances, such as when the employer pays consistently late or not does not pay at all without good reason.

There may be some other unacceptable past conduct by an employer which may indicate that it has no intention of honouring contractual terms in the future. In most scenarios, and in the current economic climate, the contractor will delay treating the employer’s conduct as repudiatory in the interests of keeping the work flowing and in the hope that they get paid at some point in the future. It really is seen as a weapon of last resort by many and rightly so.

Generally speaking, suspending performance is fraught with risk unless done pursuant to a s112 notice or by operating prescribed, contractual provisions which provide the contractor with more security as to the outcome.

Understanding Practical Completion

October 21, 2010

Understanding the meaning of “Practical Completion”

The term is of key importance to all those in the supply chain as well as subsequent purchasers and tenants. Developers will want practical completion to be certified quickly so that rental payments begin, or so that their profit can be paid in terms of a forward funding agreement. Tenants may not otherwise be able to start fit-out works or open for trading. Contractors will want to avoid or minimise liability for liquidated ascertained damages (LADs) and have the insurance risk transferred back to the developer.

Practical completion may lead to a release of retention monies (normally 50%) to the contractor if that has been agreed beforehand and, depending on its wording, any performance bond may also fall away (although increasingly bonds are extended to the time when all snagging has been completed).

The consequence of achieving practical completion is that this triggers the commencement of the defects liability period (3, 6 or 12 months typically). This narrows the matters which the contractor needs to address to incomplete and defective works that arise during that period. Issuing variations is no longer an option post practical completion and normally amount to the instruction of additional works pursuant to a separate contract.

In practice, practical completion certificates are often issued conditional upon certain snagging items being completed and so this needs to be an amendment to the standard form.  It is often also necessary to include a timeframe for the contractor rectifying such snags as there is no other duty otherwise to do so before the expiry of the defects liability period.

There can be disparity between the definition of practical completion in the Agreement for Lease and the building contract. For example, a developer may agree that the date of entry for a purchaser or tenant can only occur when the local authority has accepted the completion certificate, but this same requirement may not be included in the building contract. The issue of drawings, operation & maintenance manuals and other certificates should, if required, be drafted in as conditions precedent to achieving practical completion so that the developer ensures a smooth transition.

The risk of dispute can be mitigated by ensuring that:

  • All relevant obligations in property documents are mirrored in the building contract;
  • The professional team remains in constant communication in the lead up to practical completion and all are clear about the role they are to undertake;
  • The contract administrator operates the terms of the building contract to the letter and remains impartial (which can be difficult when faced with client pressure);
  • Practical completion is certified subject to certain outstanding snags being completed to motivate the contractor to return;
  • Any further defects are dealt with promptly, both contractually and on site. This avoids disputes festering and not being dealt with until the expiry of the defects liability period, by which time often documents have been archived and memories have faded.

Construction & Engineering Briefing Notes – Collateral Warranties

October 11, 2010

What is a Collateral Warranty?       
It is a contract under which a consultant such as an architect or a contractor / sub-contractor warrants to a third party (e.g. a funder, landlord or purchaser) that it has complied with its professional appointment or duties under a building contract.        

Why have Collateral Warranties?  
The appointment of a consultant or the award of a building contract will be between two parties i.e. the developer and the consultant or between the employer and the contractor. Often a third party will need the benefit of the contract even though it is not a party to the contract.           

The collateral warranty will contain statements to the effect that the consultant or contractor:       
a) takes proper skill, care and diligence in design;    
b) uses materials of appropriate quality;       
c) carries out the work in a proper workmanlike manner;     
d) maintains an adequate level of insurance.

The collateral warranty may also provide the third party with a contractual right of redress enabling it to sue for losses which would not otherwise be recoverable.   

Are Collateral Warranties really enforceable?    
No-one ever sues on a collateral warranty right? Wrong, as the case below demonstrates.          
           
In Scottish Widows Services Limited v Harmon & others [2010], Scottish Widows claimed several million pounds against a contractor who had installed defective cladding under a collateral warranty that had been assigned to it. The case is important because the contractor had been careful to include a ‘net contribution’ clause, which it believed would limit its liability. This was held to be effective in overriding the principle of ‘joint and
several’ liability i.e. that a single party can be held singularly responsible for the liability caused by a collection of wrongdoers. As a result of the ‘net contribution’ clause, the contractor was only responsible for the proportion of those losses which it had caused and not the total losses incurred by Scottish Widows.

Pitfalls
Parties will often attempt to include its rights of ‘set-off’ or counterclaim in the collateral warranty. A third party beneficiary should ensure that such rights are excluded. If a consultant or contractor has not been paid for its works under the building or engineering contract, then this could be used to ‘set-off’ any claim against it and could reduce the liability of the contractor under the collateral warranty to nil. In effect, the collateral warranty would become worthless.      

Many insurance policies exclude liabilities that are assumed by way of a guarantee. This can cause problems in collateral warranties where the consultant or contractor ‘warrants’, ‘covenants’ or ‘ensures’ that no prohibited materials have been used. The reason is that such terms are akin to giving an express guarantee. Therefore the consultant or contractor should only ‘see’ that prohibited materials are not used. Precise drafting is very important.            

It is also crucial to include a ‘no greater’ liability clause. Professional indemnity insurance policies commonly exclude cover for claims where the collateral warranty has imposed obligations which are more onerous or longer lasting than the equivalent liability under the building or engineering contract.

 The Future? 
Collateral warranties may create certainty and is favoured by the construction and engineering industries as well as funders. The resulting paper-chase can however be time-consuming. As a result, some major projects and consultancy appointments make use of a schedule of third party rights. This makes use of the Contracts (Rights of Third Parties) Act 1999 and is intended to provide the same benefit as a collateral warranty without the need for a separate document.   

The downside is that the drafting and negotiation of the master document becomes more complex. For instance, a schedule of third party rights requires the contracting parties to consider carefully the relevant contract terms so that they benefit not only the contracting parties, but also consider the third party requirements and whether that third party can enforce those terms. The master contract will also need to deal with the risk of double recovery by those third parties.   

The JCT 2005 suite provides the option of a third party rights schedule on all standard form contracts. Many funders however still insist upon being granted a collateral warranty as a separate document. They regard the ‘step-in’ rights (allowing the funder to take over the development if the developer or contractor becomes insolvent) as being better worded and therefore more certain as security.  This remains a culture hard to shift.

 A Word of Caution   
Even if a collateral warranty has been provided, a consultant or contractor may become insolvent. Professional indemnity insurance must be renewed annually so it is often a warning sign of foreseeable cashflow problems if parties delay or refuse to forward policies or other evidence of insurance cover.    

A solution can be found in ‘latent defects insurance’, which is a non-cancellable policy to cover the cost of repairing hidden defects and insulate against consequential losses. Policies vary however and this is merely an extra level of protection. This kind of insurance is not a substitute for a robust collateral warranty providing a wider contractual right of redress whilst the parties remain trading.

NEC3 – the finished product for effective procurement?

October 5, 2010

Is NEC3 the finished product for effective procurement?

I recall having a similar discussion about 5 years ago when NEC3 was first published. At that time, we were seeking to make sense of the changes from the second to third edition for clients.

Five years on, where are we? Our experience is that certain perennial debates are still ongoing such as:

–          Contract formation: how do clients achieve the desired result by choosing the various options;

–          Partnering: what exactly does it mean?

–          Life: how do I cope with industry expectations/evils which threaten the  precise workings of the contract?

An appraisal of NEC3, as with all industry form contracts, must come with a caveat attached. It is all-too-easy to criticise a particular contract for its failings. Contracts are not meant to be and cannot be one size fits all, which must be borne in mind here.

There are real benefits to using the NEC suite, as we all know. The three main advantages are often hailed as flexibility, simplicity and clarity.

But is that due to the terms of the contract itself, such as the early warning mechanism, or are other factors in play? How much of its apparent success is also due to market forces or strong on site project management.

It is, of course, slightly disingenuous to criticise a contract that may substantially avoid disputes by its very operation. But from a legal perspective there are aspects which, if tested, could result in the consequences of certain ambiguities in drafting being magnified.

There are, in reality, both pluses and negatives as with any contract.

Flexibility vs clarity

One of the core features of the NEC3 is, of course, its flexibility.

The forms can be used for any procurement method in an international, multi-discipline environment (be it building, civil, process engineering etc) and whether it includes contractual design or not:.

The contract is made up of various sections, as we all know:

– 9 core clause selecting the appropriate main option clause;

– 15 secondary option clauses;

– bespoke terms or amendments from the Z clauses; and

– a choice of two different schedules of cost components.

The negatives with NEC3 are exacerbated by inexperience and lack of care which may inadvertently result in no contract at all being agreed, or at least not in the way parties intended.

In terms of adjudication, there may not be a contract sufficiently evidenced in writing to enable an adjudication to take place but that may become less important with the proposed changes to the Construction Act due next year subject to the points below.

From experience, problems in the contract could arise from one or several of the following:

–          A lack of attestation clause affecting insurance cover and the duration of parties’ intended obligations;

–          The scope of services being vaguely drafted;

–          The Employer’s risks ignored in the Contract Data. This is a problem for the Contractor since it bears the risk of any not so stated.

–          In relation to the risk register, there is only an obligation to record; not to do – decision making is not mandatory (condition 16.3)

–          There may be a lack of proper programme or a failure to set out adequately sectional completion information. (X5) must be included within the contract;

–          Confusion as to the meaning and consequences of key dates as opposed to section completion dates. For clarity, a key date is an obligation to meet the condition stated in the contract by that time, whereas a section completion date acts as a trigger for the Employer to take over the works not later than two weeks after completion.

 

May be a lack of contract at all…does it really matter?

The well-known case of RJT Consulting Engineers Ltd v DM Engineering (NI) Ltd  may well be overturned by the amendments to the Construction Act but at the risk of uncertainty as to payment terms. Additionally, the right to adjudicate will still need to be in writing.

A fundamental lack of agreement over rates will remain a fertile ground for dispute, irrespective of the procedural requirements. Experience suggests that this seems to arise when the draft contract goes out to tender, the contractors then price on the information given but the contract data is sometimes never firmed up.

As a practical point, you should always get the contract data firmed up as soon as accepted, whichever side of the fence you are on. Why leave it to chance when you are undoubtedly dedicating so much administrative resource to the operation of the contract anyway?

Partnering – meaning and enforceability

Core clause 10.1, of course, states: “The Employer, the Contractor, the Project Manager and the Supervisor shall act as stated in this contract and in the spirit of mutual trust and co-operation.”

The simple problem is determining precisely what this clause means.

Core clause 10.1 comes close to a requirement to act in good faith and reflects the good faith requirements of those countries that operate under a civil code. This doesn’t work so well in England & Wales, which has a common law system. A few cases have tried to make sense of it though.

See, for example, Bedfordshire County Council v Fitzpatrick Contractors Limited [1998] where Dyson J would not imply such a term into a road maintenance contract that neither party should conduct itself in such a way that would “damage the relationship or confidence in trust” between them.

One reason for this was the care taken by the parties to detail out the terms which were to govern their contract. There was no scope to imply this further relationship.

One thing is clear from this case – being too prescriptive in terms can result in the parties losing the whole ethos of partnering. The problem is that not prescriptive enough risk the terms being too uncertain to be enforceable.

On the other hand, in Petromec Inc and Others v Petrobras and Others the Court of Appeal had to consider the whether an agreement to negotiate in good faith was enforceable. It was said the Court of Appeal because:

  • The requirement was expressly agreed by the parties as part of a contract drawn up by lawyers.
  • The Court recognised that it would be able to calculate the cost referred to and so would be able to establish whether there was a lack of good faith on the part of a party.

The questions then arise – (1) what is the standard of care in partnering and (2) how do you measure it to know if the standard has been breached?

As a reminder, it does appear that the English courts will pay attention to the intentions of the parties. Birse Construction v St David Limited is such an illustration  in which the  terms of a partnering charter was deemed not to be, and never intended to be, a binding contract even though it had been signed by the parties. As the judge said, the terms, whilst:

“clearly not legally binding, are important for they were clearly intended to provide the standard by which the parties were to conduct themselves and against which their conduct and attitude were to be measured.

This is the approach that any judge or adjudicator should follow if asked to consider the effect of core clause 10.1 in NEC3.

How do you establish the standard of care in partnering? The answer is to  list out any activities which demonstrate that the parties are acting in good faith.

How do you measure the standard? By the use of KPIs as an option to ensure that objectives surrounding cost, completion and accuracy are achievable.

Please mind the gap…z clauses

Notwithstanding the above, some would suggest that the lack of detail contained in NEC3 can lead to ambiguity and that clarity in respect of certain matters should be set out at the outset, rather than as particular events occur. Accordingly, Z clauses may typically address the following:

  • The provision of collateral warranties. Notwithstanding the Contracts (Rights of Third Parties) Act 1999, the construction industry still relies heavily on collateral warranties. It is often the case that funders, tenants and the like will insist on an employer procuring collateral warranties from its contractor. An employer will therefore be forced to include such provision within the contract;

 

  • Copyright. Where a contractor has design responsibility, it is important to include a provision addressing matters relating to copyright. Without such clarity the employer’s rights, if any, to use the design would be uncertain.

 

  • Prohibited materials and Codes of Practice. Again, where a contractor has design responsibility a provision requiring the contractor to refrain from using prohibited materials in design and construction may be necessary so as to prevent the use of unsuitable materials;

 

  • Assignment. A provision prohibiting the contractor from assigning the contract may be necessary so that the employer has certainty in respect of who is actually carrying out the works.

 

  • Confidentiality clauses – of particular importance in the public sector.

 

  • Project specific definitions – one size does not fit all, as mentioned earlier.  

 

  • Notice to Contractor of any third party interests, e.g. a landlord or funder, so that it does not act inconsistently and inadvertently put Employer in breach of its obligations. If the Contractor cannot comply, then it is best to say upfront at which point relief from any indemnity that may be put in.

 

  • Details of the insurance provisions actually in place for the project.

 What should be remembered is that Z clauses are not intended to substantially rewrite the standard clauses of contract. Indeed, improper use of Z clauses can be problematic.

No doubt it is quite easy for parties to simply “cut and paste” provisions contained in some “special conditions” or a “schedule of amendments” into Z clauses. The problem is that in doing this the parties can quite easily fall back into old habits, thereby defeating the benefits of using the NEC. Put simply, wholesale amendments to the standard form through the use of Z clauses should normally be resisted.

Saying that…certain conditions are (by the parties’ desire for clarity as to their consequences) still amended and redress the contractual balance. For example, dealing with the consequences of ambiguities/inconsistencies being discovered in condition 17.1.

Unamended, the Contractor is duty bound to notify the Employer of any ambiguity or inconsistency between “documents which are part of this contract.” Normally, an instruction follows. If it amends the Works Information, then this normally amounts to a Compensation Event.

A proportionate amendment would be to avoid the Contractor benefiting from its own breach where it fails to submit design information to the Employer and this leads to direct loss or delay.

What’s the feeling – does it tick all the boxes?

Success in using NEC3 requires a lot of pragmatism. Get the contract formation right and get the legal obligations drafted carefully so that they are effective. Partnering works when it can be measured.

There remain other barriers to effective procurement in addition to the legal uncertainties mentioned above including:

• The change in mindset required in complying with NEC3 weighed against the appearance of being “contractual”.

Experience of managing a project on NEC3 terms.

Resource having to deal with an administratively burdensome contract.

Knowledge The increased use of NEC3 by both the public and private sector.

Get this right and the benefits can be considerable leading to cost savings and success in terms of delivery.

Adjudication enforcement in context – traps for the unwary

April 30, 2010

Did a seminar last week on adjudication enforcement with Hill International to a group of West Midlands’ contractors. I thought it may be worth replicating some of the main points here for interest:

The general principle that has come out of the TCC for some considerable time now is that adjudication decisions will be summarily enforced save in the most narrowest of cases. We are all very familiar with the adage “pay now, argue later”. Since Carillion v Royal Naval Dockyard, the TCC been quite clear that it will only entertain defences to resist enforcement based on the adjudicator’s breach of natural justice only in the plainest of cases. Pilon Limited v Breyer Group is such a recent example where the adjudicator failed to consider properly a defence and therefore unduly restricted its jurisdiction to hear the dispute.

Nine times out of ten, however, the disgruntled party’s recourse is to seek redress by way of arbitration or litigation – not to come up with flimsy excuses at a summary judgment hearing. It leads to a substantial waste of costs otherwise.

But the reality is quite different.  More and more disgruntled parties are willing to pay up or, at least, without the other side doing some serious legwork. Why is this? From what I can see, this is due to a mixture of three things:

–         the deepest pocket theory: they’ll go away;

–         the “better-in-our-account-than-theirs-for-a-bit-longer” theory: this is a risky strategy with the threat of incurring indemnity costs; and

–         the valid defence theory: fine as long as it is a defence and not merely a sham.

Poor professional advice does, of course, compound a losing party’s position. That is why adjudication enforcement needs to be approached carefully.

Getting a proper assessment of the adjudicator’s decision, an appreciation of the chances of getting a successful judgment and ensuring that there are no credible defences to all or part of the adjudicator’s decision is key. Effectively, you want the green light to go!

But many parties want their cash quickly, quite rightly so, and this stage need not take an age. It is however recommended to avoid getting involved into protracted arguments in court at the enforcement hearing.

What does the initial meeting with your legal counsel look like at this stage?

First things first – understand your own mental state. You are going to be pleased that your efforts have been worthwhile and that an adjudicator has validated what you knew all along; that you are owed your money and/or your declarations as to the real state of affairs. You are also going to be frustrated that the other side have not paid up, despite you having shelled out your non-recoverable costs of running the adjudication. You are going to want to apply as much pressure on them as possible for as little extra legal expenditure as possible…and you will want a quick judgment at court.

Why do we not just issue a statutory demand now and threaten to wind them up?

I have seen people do this and there is no denying that sometimes it works as a threat. The problem arises if the other side, even spuriously, raise alleged defences to the statutory demand within the 21 day period in which case the debt is highly likely to be deemed to be disputed – indeed, it is often fatal to the winding up process if successful. Even if it is not, the process is inevitably stacked against you as it allows the defending party to applying for an injunction to have the advertisement of the petition restrained by the court. This means that you cannot proceed. Compound that by the defending party’s ability at the eleventh hour to appoint an administrator and the whole process is a waste of time. Oakley v Airclear Environmental is a stark warning that if there are issues surrounding the adjudicator’s jurisdiction, the threat of winding up will not necessarily succeed.

What you have to appreciate is that different rules apply in insolvency matters. You have to demonstrate that the other side cannot pay their debts as they fall due or point to some other reason why you believe that they are insolvent. It is not enough that they simply refuse to pay you. As my colleague, Adam Hiscox, (http://www.bpe.co.uk/pages/4720/Hiscox.htm) explained at the breakfast seminar in Birmingham which formed the subject of this blog, unless you can clearly demonstrate these grounds, the court will regard the petition as an abuse of process and throw it out with indemnity costs awarded against you.

The long and short of it is that you could simply be substituting one process for another, without the certainty of success, with procedural challenges along the way and the likelihood that you are no further advanced.

 What sort of risks will you face in adjudication enforcement?

 Challenges to the adjudicator’s award are invariably based on one or more of the following; namely that:

–         the adjudicator exceeded its jurisdiction in some way;

–         the adjudicator breached the rules of natural justice; or

–         there is some other good reason why the decision should not be enforced.

The case of GPS Marine v Ringway Infrastructure has clarified that a party that does not reserve its position to challenge an adjudicator’s award is likely to face an uphill struggle if it then wishes to challenge that award. This can be worded in correspondence or the pleadings themselves as a general reservation.  

What are you actually asking the court to do?

As will be recalled, adjudication awards are binding only until a court decides otherwise. You are therefore asking the court to order that adjudicator is right and that the award should be enforced if the losing party still refuses to pay. As the resisting party, you are asking the court to order that there is some reason why judgment should be stayed (suspended) or that it is more appropriate that matter be settled at trial. Basically, that the enforcing party is not due its money now.

There are many examples of arguments based on excesses of jurisdiction. Here are but a selection.

You may argue that the adjudicator has been biased in some way during the adjudication itself. A&S Enterprises v Kema is an example whereby the adjudicator made adverse comment about the non-availability of a representative at a hearing. It was held by the court that this could be construed as evidence of bias.  A mere observation of non-availability of evidence would have sufficed.

There is also the well-known cases where the adjudicator has held telephone conversations with a party without disclosure of contents to the other side. This was held to be sufficient to  invalidate the adjudicator’s decision in Discain Project Services v Opecprime Developments Ltd

There is nothing wrong with an adjudicator seeking legal advice, provided it discloses that fact to both parties and invites comments on its validity. In BAL (1996) v Taylor Woodrow Construction Ltd the adjudicator asked the parties for permission to take legal advice. Whilst the claimant agreed, the defendant did not reply. It was held by the court that the adjudicator had not shared the advice with the parties or provided them with  an opportunity to comment. The result was that the decision not enforced, which seems fairly harsh in the circumstances.

There is one caveat to all of this – the bias or breach of natural justice must be material and central to the dispute. So, in Kier Regional (t/a Wallis) v City & General (Holborn) the adjudicator disregarded expert evidence not available at the time the dispute crystallised. It was held that, even if it made the decision to disregard evidence in error,  the adjudicator had still decided on an analysis of facts or law that it was irrelevant and was entitled to do so. This is an inherent risk within adjudication but one consistent with decisions dating back to Bouygues v Dahl Jensen.

At the seminar, I discussed when set off would be allowed in some detail. It warranties a topic by itself but the main point is that set off must be real and ascertainable at the time of the enforcement proceedings. Such a defence will not work where the sums remain unquantified or hashed together at the last minute. Also, the set off must relate to the dispute and not to some unrelated contract as happened in Solland v Daraydan Holdings. It is not the  function of the court to stay decisions pending the outcome of other disputes.

 The bottom line is that, if an adjudicator has decided upon the issue of sums to be set off, then a resisting party may do so subject to the issue of proper notices as required. If the issue of set off has not be referred and decided upon. the entitlement depends on the precise contractual terms.

Nor will an award be held as a “hostage of fortune” to be subject to set off of unquantified subsequent payment certificates. That was tried in William Verry Ltd v Camden London Borough Council in the context of LADs to be applied. Whilst not successful, the defendant still retained the right to pursue the claimant at a later date, which is what the Construction Act is all about. A TCC judge will not allow a system of rolling balances however where one adjudicator’s decision is subject to a subsequent one. The Act requires immediate payment: Interserve Industrial Services v Cleveland Bridge UK.

 What may consist of other valid grounds to resist enforcement?

 The answer lies in the claimant’s financial standing. Bearing in mind the maxim “pay now, argue later” could the claimant pay back those sums awarded at a later stage if required to do so? If the answer is no, then the court is unlikely to order the defendant to pay. The rationale is that the sums are not being order to further the claimant’s cashflow, but rather to pay its creditors which is not the purpose of the Act. Also, if the claimant’s position is pretty much the same as it was before contracting with the defendant, then the same rationale applies. This has been the position ever since Wimbledon Construction Company 2000 v Vago. The case of Hart Investments Ltd v Fidler confirmed this that, where there are clear insolvency, the court will not enforce but will defer to the operation of insolvency rules.

This all comes down to one principle, as we all know – ensuring cashflow. ven if a decision is wrong it is still enforceable in the absence of wrong doing by adjudicator. The court is loathed to depart from that basic position.

Good bank holiday weekend, everyone.