UK Adjudicators' October 2018 newsletter.

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OCTOBER 2018 NEWSLETTER
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EDITORS COMMENTS
The Adjudication Society conference takes
place on the 8th
November in Bristol, as many
of our panellist will be attending we have
arranged an informal dinner on the 7th
November at Loch Fyne at 7.00pm. I hope to
be able to meet with you and discuss the
future development of UK Adjudicators.
On the theme of conferences I have had the
pleasure of attending the Society of
Construction Law 8th
International Conference
in Chicago and the FIDIC International
Infrastructure Conference in Berlin.
The success of adjudication in the United
Kingdom and its copying around the globe
focussed in many formal and informal
discussions at the conferences and is
something we should be proud of as an
industry and body. This shouldn’t stop us from
constantly reviewing what we have done,
learning from other countries and changing
where needed to offer improved service to
our end users.
Sean Gibbs LLB(Hons)MICE FCIOB FRICS
FCIARB, is a director with Hanscomb
lntercontinental and is available to serve as an
arbitrator, adjudicator, mediator, quantum
expert and dispute board member.
sean.gibbs@hanscombintercontinental.co.uk
CONSTRUCTION (RETENTION
DEPOSIT SCHEMES) BILL 2017-19
The second reading debate of the
Construction (Retention Deposit Schemes) Bill
introduced by Mr Peter Aldous MP has been
postponed again, from 15 June, and is now
expected to take place on Friday 26 October
2018.
The Bill’s progression through Parliament can
be followed via the following link:
https://services.parliament.uk/bills/2017-
19/constructionretentiondepositschemes.html
HONEY BEES PRESCHOOL LTD V 127
HOBSON STREET LTD [2018] NZHC
32
The New Zealand High Court followed the
United Kingdom’s Supreme Court in
Cavendish Square Holding BC v Makdessi
[2015] UKSC 67 by holding that, a clause is a
penalty where the detriment to the contract
breaker was “out of all proportion to any
legitimate interest of the innocent party in the
enforcement of the primary obligation”.
In this case Honey Bees Preschool Ltd leased
premises from 127 Hobson Street Ltd for the
purposes of operating a childcare centre. The
lease required the landlord to install a second
lift on the premises and, if this was not
operational by 31 July 2016, to indemnify

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OCTOBER 2018 NEWSLETTER
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Honey Bees against all obligations it may incur
in relation to the premises. This indemnity
would have the effect of allowing Honey Bees
to occupy the premises for approximately two
years rent-free.
In applying In applying the ‘legitimate
interest’ test, the judge considered the
following factors were relevant in concluding
that the obligation to indemnify was not a
penalty:
a. Honey Bees Preschool Ltd concerns
regarding non-performance were legitimate.
b. 127 Hobson Street Ltd had 31 months to
install the lift without triggering the indemnity
provisions.
c. 127 Hobson Street Ltd should have known
the importance of the lift to the plaintiff’s
business.
d. 127 Hobson Street Ltd’s non-performance
would affect Honey Bees Preschool Ltd’s
ability to operate a successful childcare facility
at capacity.
e. Both parties were commercially astute. The
defendant was an experienced property
developer who managed 12 commercial
properties. Any vulnerability it possessed was
self-imposed through its reliance on internal
expertise rather than seeking legal advice
from its solicitor.
f. The purpose of the indemnity clause was to
ensure performance, not to punish the
defendant.
Whilst the empire has been dismantled, this
case serves as an indication of foreign courts
willingness to follow the United Kingdoms
Supreme Court’s rulings; and whilst they are
accepted and followed it is at the discretion of
the local court and judges whether they find
the case persuasive. In this case the judge
weighed both Australian and United Kingdom
decisions before accepting the United
Kingdom’s Supreme Court ruling in Cavendish
Square Holding BC v Makdessi [2015] UKSC 67
as to the law on penalties in New Zealand.
https://forms.justice.govt.nz/search/Docume
nts/pdf/jdo/8c/alfresco/service/api/node/con
tent/workspace/SpacesStore/aa4eed17-02cc-
4f31-9672-f5379137ebf9/aa4eed17-02cc-
4f31-9672-f5379137ebf9.pdf
Thomas Johnson, is a director in the global
construction claims consultancy Hanscomb
Intercontinental.

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CHALLENGING A PAYMENT NOTICE
IN THE ABSENCE OF A PAY LESS
NOTICE
Justin Mort QC, the well known barrister
practising from Keating Chambers, London
has just had his paper published by the
Society of Construction Law (UK) where he
considers whether in circumstances where a
party to a construction contract fails to serve
a valid notice of its intention to pay less, that
party is nonetheless entitled to challenge the
notified sum in adjudication or other
proceedings. The paper provides an analysis
of this question in light of the impending
review by the Court of Appeal of Grove
Developments v S&T. He examines the
changes to section 111 of the Housing Grants,
Construction and Regeneration Act 1996 and
the differing approaches to the amended
provisions taken in recent cases. He goes on
to consider the question of when the paying
party’s right to challenge the payment notice
arises.
The writer would urge you to read the paper
which can be found at:
https://www.scl.org.uk/papers/challenging-
payment-notice-absence-pay-less-notice
2018 ENGLAND AND WALES HIGH
COURT (TECHNOLOGY AND
CONSTRUCTION COURT) DECISIONS
August / September
 DHL Supply Chain Ltd v Secretary of
State for Health and Social Care
[2018] EWHC 2213 (TCC) (17 August
2018)
 Hodgson v National House Building
Council [2018] EWHC 2226 (TCC) (29
August 2018)
 Swansea Stadium Management
Company Ltd v City & County of
Swansea & Anor [2018] EWHC 2192
(TCC) (15 August 2018)
 Bond v Mackay & Ors [2018] EWHC
2475 (TCC) (25 September 2018)
 Ocean Outdoor UK Ltd v
Hammersmith And Fulham [2018]
EWHC 2508 (TCC) (28 September
2018)
 Palmer Birch (A Partnership) v Lloyd &
Anor [2018] EWHC 2316 (TCC) (24
September 2018)
 Williams Tarr Construction Ltd v
Anthony Roylance Ltd & Anor [2018]
EWHC 2339 (TCC) (14 September
2018)

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ESCL CONFERENCE 2018
The European Society of Construction Law
conference 2018 is due to take place from
Thursday, 25 October 2018 to Saturday, 27
October 2018 in Bucharest.
http://rscl.ro/en/escl-2018/
UK ADJUDICATORS DINNER
The UK Adjudicators will be holding a dinner
at Loch Fyne restaurant in Bristol the evening
of the 7th
November 2018 7.00pm for 7.30pm.
Anyone with an interest in adjudication is
welcome to attend. If you would like an
invitation please email
ADJUDICATION SOCIETY ANNUAL
CONFERENCE 2018
The Adjudication Society's Seventeenth
Annual Conference will be held at the
Mercure Bristol Hotel on Thursday 8th
November 2018.
The theme will be 'Adjudication: A 2018
Refresher and Update' and the key note
speaker is Mrs Justice O'Farrell QC.
https://www.adjudication.org/events/annual-
conference-2018
DRBF CONFERENCES 2018
Charlotte, USA 17-19 October 2017
Geneva, Switzerland 14-16 November 2018
http://www.drb.org/events/calendar/

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FIDIC CONFERENCES 2018
Main Conference: 30 & 31 October 2018
Dispute Resolution + Claims Workshops: 29
October 2018
Introduction to FIDIC Contracts Workshop: 1
November 2018
Hyatt Regency, Johannesburg, South Africa
https://law.knect365.com/fidic-africa-
contracts/
Contractor & Claims Workshops: 3 December
Main Conference: 4 & 5 December 2018
Modified Contracts & Dispute Resolution
Workshops: 6 December 2018
Novotel London West, London, UK
https://law.knect365.com/fidic-international-
contract-users/
Cardiff 28 November 2018
(1) Key recent professional liability cases; (2)
Trends (including post Grenfell liability issues
and the Carillion liquidation); and (3) Practical
guidance
5.30 for 6.00pm at Blake Morgan, One Central
Square, Cardiff CF10 1FS
Speakers are Sarah Hannaford QC and Tom
Owen Keating Chambers
SCL INTERNATIONAL CONFERENCE
2020
The Society of Construction Law 9th
International Conference is being held from
the 4th to the 6th November, 2020 in
Auckland, New Zealand, further details can be
found at:
http://www.constructionlaw2020.com/scl20