2 South West Building & Construction

SOUTH WEST

April 2010

BUILDING &

CONSTRUCTION

Tavistock Newspapers Ltd, 14 Brook Street, Tavistock, Devon, PL19 0HE. Tel: 01822 613666 Fax: 01822 618222

INSIDE THIS ISSUE

■ Aspects of Construction - Page 4 ■ Phil Jarman - Page 8 ■ Wood Yew Waste - Page 9 ■ South West Surveyors Ltd - Page 10 ■ Payne Timber & Duchy Timber - Page 15 + 16-17 ■ Focus on Okehampton & Holsworthy - Page 18 ■ South West Women in Construction - Page 21 ■ Construction in Cornwall - Page 27

CAPTIONS FOR MAIN FRONT PAGE PICTURES: clockwise

from top: Payne Timber & Duchy Timber, see pages 15, 16

and 17; Sheffield Insulations, see pages 3 and 5; New

Generation Energy, see page 13; South West Women in Construction boost charity, see page 21; and South West Fires

and Flues, see page 6.

Quote of the month

‘

My vice is to hang out with my friends and talk about nothing -

Actor Leonardo DiCaprio

STEPHEN HOMER

Contracts - beware of out-of-date clauses

Stephen Homer, a former chairman of the CIC South West (Devon & Cornwall), highlights a recent court case.

IN a recent case, the main contractor,

Shepherd

Construction Ltd issued withholding notices for the sums of just under £1 million to the sub-contractor, William Hare Ltd.

How you can contact us

EDITORIAL Editor: Paul White Main contributor: Andrew Townsend

Paul White Communications PO Box 40, Callington, PL18 9WB ADVERTISING:

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’

Shepherd relied on clause 32 of the sub-contract which provided for payment to be conditional on the contractor being paid by the employer first, where the employer was ‘insolvent’.

This type of pay-when-paid clause is permitted by the Construction Act. Shepherd argued that the employer was insolvent and that therefore as they had not been paid they did not have to pay William Hare. The sub-contract defined what

insolvent meant for this purpose in a different clause. The clause omitted to include a new quick method of insolvency created by the Enterprise Act 2002. The employer on the project used this very method to enter into administration without obtaining an administration order. William Hare Ltd, the claimant in this case, argued that Shepherd Construction Ltd could not rely on clause 32 to avoid payment as ‘insolvency’ in the

clause did not include the type of insolvency to which the employer was subject.

The court refused to interpret

‘insolvency’ in clause 32 of the contract as including the new method of insolvency created by the Enterprise Act 2002. It held that as drafted the clause was coherent. Furthermore, the party seeking to rely on the clause was the party whose standard terms were used and in the time that had passed between the changes in the law and the signing of the contract, Shepherd had not amended their contract nor had any of the parties sought to amend it so as to reflect a different intention. Accordingly, Shepherd were not entitled to rely on insolvency of the employer as entitling them to refuse payment and by virtue of clause 32 had to pay William Hare.

What this means for you: It

is time to have a good look at the insolvency provisions in your contracts including the right to terminate because of the other party’s ‘insolvency’. If you have any queries or need further information, please do not hesitate to contact me at s.homer@ashfords.co.uk.

SOUTH West Building & Construction magazine is now

available to read on the worldwide web. The magazine, which is part of Tavistock Newspapers Ltd, can be found on the internet at www.tavistock-today.co.uk. Under menu on the home page, click the Special Publications button. This opens a new page. Then click on the cover of an edition of South West Building & Construction magazine to view that issue in full.

DISCLAIMER: The CIC SW (Devon & Cornwall) will not accept any responsibility for any loss occasional to any person acting or refraining from action as a result of the material included in this publication. Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31