AUSTRALIA The Law Book Company Lid. Sydney : Melbourne : Brisbane CANADA AND U.S.A. The Carswell Company Ltd. . Agincourt, Ontario INDEA N. M, Tripathi Private Lid. Bombay : ISRAEL Steimataky’s Agency Ltd. Jerusalem : Tel Aviv : Haifa MALAYSIA : SINGAPORE : BRUNEI Malayan Law Journal (Pte) Ltd. Singapore NEW ZEALAND Sweet and Maxwell (N.Z.) Ltd. Wellington PAKISTAN Pakistan Law Hottse KarachiCONCISE COLLEGE TEXTS CONSTRUCTION LAW An outline of law and practice relating to the construction industry By. JOHN UFF PuD., BSc4Eng), CENc., MLCE. of Gray's Inn: Barrister-at-Law LONDON SWEET & MAXWELL 1974PREFACE ‘My chief excuse for writing this book is that I have seen two (professions from the inside: civil engineering and the law. This wexpetience has led me to certain conclusions as-to what people ethe construction industry know about law and what they ought ‘to: know; it has also given. me some views on how legal material might best be presented for non-lawyers. The book is composed of a wide range of material, which is ‘treated in various levels of detail; my aim has been to make the ‘result as readable as possible. While the contents are based upon current. syllabuses in use for courses in civil engineering, archi- “tecture, building and surveying, I hope that the work will be of interest not only to students but also to those in practice. In writing this book I have received constant and invaluable help, in the form of editing, criticism, typing and general coun- “SeHing, from my wife Diana Graveson, LL.M. I am also greatly indebted to Bernard Dickens, Ph.D., who undertook the task of -eadiing the manuscript. I am grateful to members of my chambers for-mruch heipful advice. ~ “Ese Tempre, £.C.4 JouN UFE | Marcu. 1, 1973CONTENTS Table of Cases Table of Statutes . Table of references to Standard Conditions of Contract 1. The English Legal System 5 0. we The NatureofLaw. 9 - ee Categories of Laws) Le The Courts . + . . . + 2. Litigation and Arbitration . : : Procedure in Litigation : : : Arbitration. : + Eyidence . 3, Special Parties. Parties in the Construction Industry Limited Companies . . Partnerships foo. : Other Corporate Bodies. - oe Trade Unions. ee : 4, Contract—General Principles - . : Formation of Contract : foo: Contracts which are not Binding’ : : Discharge of Contracts : : : International Cases. : : : BRSS8 BBBEBR BERS. or $. Special Contracts 5 geure vii6. Documents Construction | . . : . Rectification : . - Variation of Contracts 7. Building and Civil Engineering Contracts *" ‘Performance and Fayment + . Variations. Certificates. . ” Engineers and Architects Sub-Contracts’ Time §, Standard Conditions of Contract The RIBA Standard Form of Building Contract : The ICE General Conditions of Contract, Fourth Edition . ¥9. Tort. Negligence . . . Negligent Misstatement . : 7 Other Aspects of Negligence Nuisance , Vicarious Liability . . Remedies and Limitations . International Cases . f10- Law of Property - : a Rights of the Owner or Occupier of Land . Rights over Land of. Others . : Planning Law 11. Statutory Provisions - ‘The Building Regulations The London Building By-Laws The Construction Regulations - Appendiy A . Appendix B | Etdex 96 102 ill 112 1l4 U5 118 120 122 “123 124 125 127 129 137 137 143 149 156 166TABLE OF CASES j *Alphacell Ltd, y, Woodward [1972] AC. 824 .. - 27 ‘AME. International v. Magnet Bowling [1968] 1 W.LR. 1028 ug + Andieue v, Selfridge & Co, Ltd. [5938] Ch. 1. . . “Andrews v, Hopkinson [1957] 1 Q.B. 229 : i ‘Appleby y. Myers (1867) LR. 1 CP. 615. + 7 _ Ashbury Railway Carriage and iron Co. v. Riche (1873) LR.7 2 ; HLL 633, a: Battoms v. Mayor of York (1852) Hdson’s Building Contracts, 4th ed, V. IL, p. Bunker v. Charles Brand & Soo Chambers v. Goldthorpe [1901] 1 K-B. 624. Gay v. A. I, Crump Lid. [1964] 1 Qu Conway v. George Wimpey & Co. Lid. [1951 Cammings y. Sir William Arrol & Co, Ld, [1962}1 WLR, 298 145 Curtis v. ‘Chemical Cleaning and Dyeing Ga 11951) { KB. 805 4t Dasmays Lid. v. F. G. Minter Lid, (19717 1 W.LR. 1205 32) Donoghue v. Stevenson [1932] A.C, 562. 1 Dutton y. Bognor Regis U.D.C. [1972] 1 ‘iz Electrochrome Lid. y, Welsh Plastics Ltd. [1968] 2 All LR. 205 114 Ford Motor Co. Lid. v. Atpalgamated Union of Engineering and | Foundry Workers [1969] 2 QB, 303... Frankdin ‘Minister of Town and Country’ Planning a 87 . Gilbert-Ash (Northern) Ltd. v, Modern, Engineering (Bristol) Ltd. [1973] 3 AMER. 195... Gloucestershire CC. v. Richardson [1969] 1 A.C. 480". Grover & Graver Ltd, v. Matthews [1910] 2 K.B. 401 Harbus Plasticine ¢. Wayne ‘Tak and Pump Co, [1970] 1 OB. we Hardwick Game Farm ». Suffolk Agricultural Producers’ Asso ciation [1969] 2-A.C. 31 : i - 130, 136. ee or 56. Hedley Byme & Co. Ltd, y. Heller & Partners [1964] pity Herrington v. British Railways Board [1972] A.C. 877 - 116: Hickman & Co. y. Roberts [1913] AC. 229. 84 Hoare vy. McAlpine [1923] 1 Ch. 167 ... Hounslow London B.C. v. Twickenham Ge Led. [1971] Ch. 233 Hussey v. Paimer [1972] 1 W.LR. 1286 - ix“Fameson ». Simon (1899) 1 F. (Ct, of Sess) 1211-0... 1 86 Kemp v. Rose oss 1 Gi, 258 wo. be eneeneeeeeees 84 brook, Properties Ltd. v. Surrey C.C. [1970] 1 W.L.R. 161 119 ¥; international Galleries {1950] 2 K.B. 86 .., 42 yy. Thorne [1956].1 W.LR. 303 ........-.. . 4t vura y. Northern Assurance Co. Ltd. [1925] AC. 619 ....- 67 Docks & Harbour Board’ pv. Coggins & Griffith (Liver- -pool) Ltd. [1947] A.C. 1 olitan Water Beard v. Dick, Kerr & Co. [1918] A.C. 1947 Molloy: v. Liebe (1910) 102,.L.T. 616 . &1 ‘Moore & Co. and Landauer & Co. Re | 55 wesk Cleaners v. Hicks [1966] 2 LL.R: 338 8&7 blett y. Confectioners’ Materials Co. [1921] 3 K.B. 387 . 56 ‘Padbury v. Holliday & Greenwood Ltd. (1912) 28 T.L.R. 494 -- 120 ‘Panamena Europa Navegacion v. Leyland & Co. [1947] A.C. 428 94 ‘eek Construction (Liverpool) Ltd. y. McKinney Foundations Etd. [1970] 69 LGR. 1 91 ry. Webb [1969]-1 W.L.R, 514 . 65 ips 'v, Ward [1956] 1. W.L.R. 471 ». #1 msiand Government Railways v. Manufacturers’ Mutual Jusurance Ltd. [1969] 1 LL.R. 214 0..... see cee sees 86 affies y. Wichelhaus (£864) 2 H. & C. 906 . 43 dv. J. Lyons & Co. Ltd. [1947] A.C. 136 | . 118 “Ry Hereford Corporation ex p. Harrower [1970] 1 32 “Wickards (Charles) Ltd, vy. Oppenheim | [1950] 1 KB. 616°..... 75 herts v. Havelock. (1832) 3 B. & Ad. 404 oo... cece 78 ‘Oberts (A.) & Co. Lid. ¥. Leicestershire C.C, [1961} Ch. $55 - 74 Roles vy. Nathan [£963].1 WLR. 1147 .-..6--05-- ed Roselodge Ltd. v. Castle [1966] 2 LL.R. 113 . lands v. Fletcher (1868) LR. 3 HLL. 330. ord Corporation v. Lever [1891] 1 Q.B. 168 -.............. 62. O-M. (U.K.} Ltd. v. W J Whittall & Son Lid. [1971] 1 Q.B. 337 2 it, Avery (1856) 5 HL. BL] occ cccesesecsensarees 20 Shgnklin Pier Lid. vy. Detel Products Ltd. [1951] 2 K.B. 854 . 87 aSharpe y. E. T. Sweeting & Son Led. [1963] 1-W.L.R. 665 113 Sharpe-y. San Paulo Rwy. (1873) LR. 8 Ch. App. 597 . o Simpiex.Concrete Piles v. St. Pancras B.C. (1958) (unrep } as Hudson’ Building and Engineering Contracts, 10th ed,, is PSG eee eer e ree pene eee ened Shipping Corporation vy Joseph Rank Ltd. L957 1 QB. 267 i tiffe: v. (Thackrah) {i97al 1 WER. 888 we ORS‘Thom y. London Corporation (1876) 1 App. Cas. 120. Townsend (Builders) Ltd. y. Cinema News Property Manage- ment [1959] 1 WLR. 119 . Trollope & Colls Lid. v. Atomic Power Constructions Lid. {i963} 1 WLR. 333. Toener v. Garland “and Contracts, 4th ed, vol. Hp. 1. ‘Victoria Laundry (Windsor) Ltd. v. Newman Industries Led. [1949] 2 K.B. 528 Webb y. Bevis [1940] 1 All E.R. 247 - ‘Whitworth Street’ Estates (Manchester) Partners [1970] A.C. 583 . William Lacey (Hounslow) v. Davis Williams y, Fitamaurice (1858) 3 H. & N. 844 - Wilsons & Clyde Coal Co. v, English [1938] AC, Wilson v. Tyneside Window Cleaning Co. [1958] 2 QB.1890 1893 1925 1933 1939 1944 1987 1948 1980 1957 1959 1961 1963 TABLE OF Partnership Act (3 &S4 Vict. c. 39), 30 Sale of Goods Act (56 & 87 Vict. c. 2 iis 4, 5457 Law of US & 16 Geo. $f 20) Local Government et Be 24 Geo. wereyee 3 Liman Act Ce 3 Geo, 6c. 21) 51, 122 Fdusation Act (7 & 8 Geo. 6c. 31)... 31 Crown "Proceedings Act (10 & 11 Geo, 6c, 44) 33 ‘Companies Act (i & 12 Geo, 6c, 38) 26 Arbitration Act) (14 18 us ‘Fliz, 2c. 25) .. 34, 137 Factories Act (9 & 10 Eliz, 2c, 34) 137, 143-148 London Government ‘Act (6.33) eeeeee 32 Offices “Shops ‘and 14° STATUTES 1965 1967 1968 1969 1971 1972 p73 Railway Premises Act (© 41)... 137 ‘New Towns Act fe Country Planning Act(c.72) 131 Emplojers’ Liability (Defective Equip iment) Act 37) 17 Courts Act (c. 23). 2, 14 Industrial _ Relations ‘Act (@. 72). - Town and are Planning Act (, ‘ 78) oo ‘31, 129-135. Defective “Premises Act (¢. 35) . 113 - Coniracts of Employ: ment Act (c. 53)... 64 European ties Act (¢. 68) .. 27 Local Government Act (c. 70). 32 Supply of Goods Gmplicd - Terms) Act (c. 13) 55, 56, 58, 59Booewaune TABLE OF REFERENCES TO STANDARD CONDITIONS OF CONTRACT RIBA forms of contract, 1963 edition Clause- Page 97, 98 7 88, 96, 97 137 oT 98, 99 97 97 7 79, 99, 100 80, 96, 100 7 9 83, 98 Er 38 36, 98 98 97, 98 83, 98 9 101 46, 99 99 90, 95, 101 90, 108 83, 108, 101 18, 19, 20, 102 ICE form, 4th edition Page 103 103 104 103, 109 103 88, 103 37, 103 105 - 95, 105, 109 Clause B 14 15 7 20 21 2 2 m age 47, 104, 106 104 103 104 86, 98, 105 105 109, 128 105, 105ICE form, Sth edition ‘156, 157, 159 157 157, 163 457, 163 157 136 159 156, 159, 163, 164 156, 158, 160, 163 158, 160, 163 137 158 159 159 159 159 159 159 160 157 160 lél 161, 162, 163 158 . 42 43 108 98, 107, 108 167 86, 108 80, £08 108 109 108 83, 108, 109 108 ql 18, 19, 20, 109, 110 ~ 90, 95, 109 46, 107 07THE ENGLISH LEGAL SYSTEM “CONSTRUCTION law” is neither a legal term of art nor a technical one. It is used to cover the whole ficld of law which. in one way or dnother,, affects the construction industry. This book is an attempt to cover that field. Most of the book is concerned with substantive inw, that is, Jaw wihtich lays down rights and duties of individuals. The concern’ of - most people is to keep well within the bounds of the law, and to ~ avoid becoming involved in legal action unless it is unavoidable. ‘Therefore substantive law is all that concems the majority. of persons, But the construction industry is a peculiar case. As pre- sently constituted its methods and its structure seem inevitably to-tead the parties frequently to the brivk of legal action and wot infrequently beyond it. Many individuals in the construction industry will at some time in their careers become professionally involved in. litigation or arbitration. And there can be few people who do not have sotne dealings with contractors’ claims, which may be a prelude to litiga~ tion. For these regsons the contents of this book extend beyond. substantative law, to give some account of the system of English. law which lies bebind the rights and duties. In this chapter the sources and categories of law are described. Tue Narurs or Law Different types of law create different kinds of rights and duties, Some law applies only between individuals: if A behaves in a way which causes loss to B, then the civil law may allow B to recover his loss from A. Much of the law of contract and tort applies in this way, B's legal remedy being the only sanction against A. In other types of law the State may be involved: if A drives his motor; : car negligenily he may be liable not only for B's resulting Joss (though injury to himself or his property) but also to a criminal prosecution, Some areas of law concer only the rights or duties of. the individual against the state: for example, planning law or tax law. Most of the principles discusséd in this work relate solely. to civil law. ‘The factor which connects varions types of law is that they 1 .8 'FHE ENGLISH LEGAL. SYSTEM alt exist in order te allow persous to regulate their lives with reasonable certainty, and in a manner which our society presently considers to be just. The law is often accused of unwarranted delay, and of being old-fashioned and too complicated. All these things are at times true. But lew is made by and for human :: ‘beings, who today lead lives of unprecedented complexity. The * fact: that the law will, if called upon, provide a solution to any type of human problem is in no smail degree remarkable. dLaw and technology . Most readers will be well versed in scientific or technical pur- suits. It might therefore be useful to describe the nature of law by examining examples of some ways in which law differs from technology. First, in technical fields there are always some problems which, for the time being perhaps, cannot be solved: usttif a few years ago engineers considered that skyscraper blocks could not be built in London because of the compressible clay sub-soil: In law . Sich a situation never arises: No matter how complex may be the facts of a case or how confused the law, a judge must always decide which of the parties wins. This does not mean that the judge is always right. There may be an appeal against-his decision: * but the same problem then confronts a higher court. The way in which the courts solve a difficult problem may be illustrated by a typical judicial pronouncement, in this case by Lord Denning MLR. in S.C.\M. v. Whittai (1970): “Where is the Tine to be drawn? Lawyers are coutinually asking that question. But the judges are never defeated by it. We may not be able to draw the line with precision, but we can always say on which side of it any particular case falls.” Secondly. in engineering and building practice. approximation and simplification play a large part: smail light structures may be safely designed using approximate methods, while on large struc- tures many more factors have to be taken into account. In law there is (or should be) no such scale effect: the law applied to a.claim for.£10 in the county court is the same as that applied . to a-claim for £10 million in the High Court. This view of the jaw perhaps explains the old adage that a lawyer will never give a simple answer to a simple question: simplification of the facts of a case does not simplify the law involved, and one may need io know every factual detail. before even a guess can be ~ made at the probable legal result. Thirdly, while technology proceeds upon logical induction andTHE NATURE OF LAW . 3 deduction, the development of the common law is different. General Principles of law must be arrived at by induction. But when a judge seeks to, extend an established principle of law he may do it in a way which does not amount to logical deduction, The common iaw in its practical application is more the embodiment of common sense than reason. To express the point in typical judicial terms (again cited’ in the 5.C.M. case above): “In the ‘varied web of human affairs the Jaw must abstract some conse- quences a3 relevant not perhaps on the grounds of pure logic, but simply for practical reasons.” Fourthly. although technology advances with incteasing rapidity not everyone uses the latest theories and methods. Indeed; one could today build a perfectly satisfactory bridge using 2 design by Brunel: a moder bridge would simply be tuck cheaper, In law the situation is quite different. Legal rights and duties depend only upon what-the law says at the relevant time. A change in statute faw can mean that a man may do an act one day with impunity but on the next at his peril. Common law, or case precedent, is rather different. In theory the judge states what the Taw is ‘and has been, so that a restatement apples retrospectively. The practical effect as to the future is, however, thie same as a change in the law. Thus, when looking up the present Jaw on some point the very latest sources must be consulted; and. possible future changes may need to be considered. It is by no means unknown for a court to come to a wrong decision because a recent change in the law was not brought to its attention, CATEGORIES OF Law English law may be categorised in three principal ways. First it may be divided into substatitive law’ and procedure, Substantive law refers to all the branches of law which define persons’ rights and duties, such as contract, tort and crime, The substantive law determines in a particular case what facts must be prove to achieve a certain result, such as to esiablish that a contract is enforceable. Thesé may be called the facts in issue, and in the example given, a fact in issue might be whether there was cou- sideration for an agreement (sec p. 38). . Procedure deals with the often complex rules through which the process of law is set in motion to enforce some substantive Tight or remedy. Procedure properly arises only when there is resort to legai action, but nevertheless it can be as important:in Practice as the substantive: law. :