Parkwood Leisure Limited v Laing - Revision history

Designing Buildings at 07:55, 23 October 2020

2020-10-23T07:55:49Z

← Older revision		Revision as of 07:55, 23 October 2020
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	Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC)		Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC)

−	----	+	-----
−		+
	About the time the Housing Grants Construction and Regeneration Act 1996 (“the Act”) was passed, I recall asking my training principal whether a collateral warranty constituted a construction contract for the purposes of the Act. “Interesting question” came the response. Here’s an interesting answer................		About the time the Housing Grants Construction and Regeneration Act 1996 (“the Act”) was passed, I recall asking my training principal whether a collateral warranty constituted a construction contract for the purposes of the Act. “Interesting question” came the response. Here’s an interesting answer................

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	Parkwood brought (CPR Part 8) proceedings for a determination as to whether:		Parkwood brought (CPR Part 8) proceedings for a determination as to whether:
−	*The collateral warranty amounted to a construction contract for the purposes of the Housing Grants Construction and Regeneration Act which would then enable it to adjudicate its claim.	+
−	*The present claim was compromised in the settlement agreement.	+	* The collateral warranty amounted to a construction contract for the purposes of the Housing Grants Construction and Regeneration Act which would then enable it to adjudicate its claim.
		+	* The present claim was compromised in the settlement agreement.

	= The collateral warranty =		= The collateral warranty =

−	The collateral warranty contained the following clause: “The Contractor warrants, acknowledges and undertakes that [''emphasis added'']:-	+	The collateral warranty contained the following clause: “The Contractor warrants, acknowledges and undertakes that [emphasis added]:-
−	*1. It has carried out and ''shall carry out and complete'' the Works in accordance with the Contract;	+
−	*3. In the design of Works.....the Contractor...has exercised and ''will continue to exercise'' all reasonable skill and care to be expected of an architect......;	+	* 1. It has carried out and shall carry out and complete the Works in accordance with the Contract;
−	*7. It has complied and ''will continue to comply'' with the terms of regularly and diligently carry out its obligations under the Contract.”	+	* 3. In the design of Works.....the Contractor...has exercised and will continue to exercise all reasonable skill and care to be expected of an architect......;
		+	* 7. It has complied and will continue to comply with the terms of regularly and diligently carry out its obligations under the Contract.”

	The judge, Mr Justice Akenhead, then looked at the definition of “construction contract” and “construction operations” under sections 104 and 105 of the Act and decided that Parkwood’s collateral warranty was a construction contract as the definitions were widely construed and the Act applies to all contracts related to the carrying out of construction operations. The warranty was subsidiary to the building contract which was itself a construction contract. The judge noted wording in the warranty relating expressly to the carrying out and completing of the works, i.e., a prospective obligation to finish the remaining works.		The judge, Mr Justice Akenhead, then looked at the definition of “construction contract” and “construction operations” under sections 104 and 105 of the Act and decided that Parkwood’s collateral warranty was a construction contract as the definitions were widely construed and the Act applies to all contracts related to the carrying out of construction operations. The warranty was subsidiary to the building contract which was itself a construction contract. The judge noted wording in the warranty relating expressly to the carrying out and completing of the works, i.e., a prospective obligation to finish the remaining works.
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	The upshot of this could now see the rise of third party rights as circumventing the issues arising from this case. Could this spell the end of the widespread use of warranties which may finally be falling out of favour?		The upshot of this could now see the rise of third party rights as circumventing the issues arising from this case. Could this spell the end of the widespread use of warranties which may finally be falling out of favour?

−	----	+	-----
−		+
	This article was created by construction lawyer --[[User:Najma_Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].		This article was created by construction lawyer --[[User:Najma_Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].

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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Adjudication.	+
−	*Collateral warranties.	+	* Adjudication.
−	*Construction contract.	+	* Collateral warranties.
−	*Defects.	+	* Construction contract.
−	*Definition of collateral warranty.	+	* Defects.
−	*Housing Grants Construction and Regeneration Act.	+	* Definition of collateral warranty.
−	*Reasonable skill and care.	+	* Housing Grants Construction and Regeneration Act.
−	*Scheme for Construction Contracts.	+	* Reasonable skill and care.
−	*Third party rights.	+	* Scheme for Construction Contracts.
		+	* Third party rights.

	=== External references ===		=== External references ===
−	*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/2665.html England and Wales High Court (Technology and Construction Court) Decisions].

−	[[Category:~~Case_law~~]] [[Category:~~DCN_Case_Law~~]]	+	* BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/2665.html England and Wales High Court (Technology and Construction Court) Decisions].
		+
		+	[[Category:DCN_Case_Law]] [[Category:DCN_Commentary]] [[Category:DCN_Guidance]] [[Category:Case_law]]

Designing Buildings at 07:02, 25 May 2014

2014-05-25T07:02:02Z

← Older revision		Revision as of 07:02, 25 May 2014
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−	~~[[File:Ndunnett profile.jpg\|146x169px\|alt=Ndunnett profile.jpg]]~~	+	This article was created by construction lawyer --[[User:Najma_Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].
−		+
−	This article was created by construction lawyer Najma Dunnett as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].	+

	= Find out more =		= Find out more =
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	*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/2665.html England and Wales High Court (Technology and Construction Court) Decisions].		*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/2665.html England and Wales High Court (Technology and Construction Court) Decisions].

−	[[Category:Case_law]]	+	[[Category:Case_law]] [[Category:DCN_Case_Law]]

Designing Buildings: Protected "Parkwood Leisure Limited v Laing" ([edit=sysop] (indefinite) [move=sysop] (indefinite))

2013-09-25T08:12:45Z

Protected "Parkwood Leisure Limited v Laing" ([edit=sysop] (indefinite) [move=sysop] (indefinite))

← Older revision

Revision as of 08:12, 25 September 2013

Designing Buildings at 07:39, 25 September 2013

2013-09-25T07:39:01Z

← Older revision		Revision as of 07:39, 25 September 2013
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	Parkwood brought (CPR Part 8) proceedings for a determination as to whether:		Parkwood brought (CPR Part 8) proceedings for a determination as to whether:
−	*The collateral warranty amounted to a construction contract for the purposes of the Act which would then enable it to adjudicate its claim.	+	*The collateral warranty amounted to a construction contract for the purposes of the Housing Grants Construction and Regeneration Act which would then enable it to adjudicate its claim.
	*The present claim was compromised in the settlement agreement.		*The present claim was compromised in the settlement agreement.

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	Collateral warranties will now be subject to greater scrutiny in the light of this case. We may now see a resistance among contractors and consultants to grant warranties and a desire to perhaps restrict the number and scope of warranties so that their application is limited to be retrospective only. That inevitably means further complications for the negotiation and drafting of warranties resulting in protracted and costly negotiations.		Collateral warranties will now be subject to greater scrutiny in the light of this case. We may now see a resistance among contractors and consultants to grant warranties and a desire to perhaps restrict the number and scope of warranties so that their application is limited to be retrospective only. That inevitably means further complications for the negotiation and drafting of warranties resulting in protracted and costly negotiations.

−	The decision also raises speculation as to the application of the Act’s ~~scheme~~ and payment provisions to warranties considered to be construction contracts.	+	The decision also raises speculation as to the application of the Act’s Scheme for Construction Contracts and payment provisions to warranties considered to be construction contracts.

	The upshot of this could now see the rise of third party rights as circumventing the issues arising from this case. Could this spell the end of the widespread use of warranties which may finally be falling out of favour?		The upshot of this could now see the rise of third party rights as circumventing the issues arising from this case. Could this spell the end of the widespread use of warranties which may finally be falling out of favour?
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	*Construction contract.		*Construction contract.
	*Defects.		*Defects.
		+	*Definition of collateral warranty.
		+	*Housing Grants Construction and Regeneration Act.
	*Reasonable skill and care.		*Reasonable skill and care.
		+	*Scheme for Construction Contracts.
	*Third party rights.		*Third party rights.

Designing Buildings at 07:22, 25 September 2013

2013-09-25T07:22:59Z

← Older revision		Revision as of 07:22, 25 September 2013
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−	~~===~~ Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC) ~~===~~	+	Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC)

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Designing Buildings at 07:22, 25 September 2013

2013-09-25T07:22:39Z

← Older revision		Revision as of 07:22, 25 September 2013
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−	Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC)	+	=== Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC) ===

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−	[[File:Ndunnett profile.jpg\|146x169px]]	+	[[File:Ndunnett profile.jpg\|146x169px\|alt=Ndunnett profile.jpg]]

	This article was created by construction lawyer Najma Dunnett as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].		This article was created by construction lawyer Najma Dunnett as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].

Designing Buildings at 07:21, 25 September 2013

2013-09-25T07:21:01Z

← Older revision		Revision as of 07:21, 25 September 2013
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	Some of these problems were settled under a settlement agreement made between Parkwood and Laing, however issues with the air handling units persisted so Parkwood sought to claim against Laing under its collateral warranty.		Some of these problems were settled under a settlement agreement made between Parkwood and Laing, however issues with the air handling units persisted so Parkwood sought to claim against Laing under its collateral warranty.

−	Parkwood brought (CPR Part 8) proceedings for a determination as to whether:	+	Parkwood brought (CPR Part 8) proceedings for a determination as to whether:
	*The collateral warranty amounted to a construction contract for the purposes of the Act which would then enable it to adjudicate its claim.		*The collateral warranty amounted to a construction contract for the purposes of the Act which would then enable it to adjudicate its claim.
	*The present claim was compromised in the settlement agreement.		*The present claim was compromised in the settlement agreement.
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	The collateral warranty contained the following clause: “The Contractor warrants, acknowledges and undertakes that [''emphasis added'']:-		The collateral warranty contained the following clause: “The Contractor warrants, acknowledges and undertakes that [''emphasis added'']:-
−	*1. It has carried out and ''shall carry out and complete'' the Works in accordance with the Contract;	+	*1. It has carried out and ''shall carry out and complete'' the Works in accordance with the Contract;
−	*3. In the design of Works.....the Contractor...has exercised and ''will continue to exercise'' all reasonable skill and care to be expected of an architect......;	+	*3. In the design of Works.....the Contractor...has exercised and ''will continue to exercise'' all reasonable skill and care to be expected of an architect......;
	*7. It has complied and ''will continue to comply'' with the terms of regularly and diligently carry out its obligations under the Contract.”		*7. It has complied and ''will continue to comply'' with the terms of regularly and diligently carry out its obligations under the Contract.”

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	Collateral warranties will now be subject to greater scrutiny in the light of this case. We may now see a resistance among contractors and consultants to grant warranties and a desire to perhaps restrict the number and scope of warranties so that their application is limited to be retrospective only. That inevitably means further complications for the negotiation and drafting of warranties resulting in protracted and costly negotiations.		Collateral warranties will now be subject to greater scrutiny in the light of this case. We may now see a resistance among contractors and consultants to grant warranties and a desire to perhaps restrict the number and scope of warranties so that their application is limited to be retrospective only. That inevitably means further complications for the negotiation and drafting of warranties resulting in protracted and costly negotiations.

−	The decision also raises speculation as to the application of the Act’s scheme and payment provisions to warranties considered to be construction contracts.	+	The decision also raises speculation as to the application of the Act’s scheme and payment provisions to warranties considered to be construction contracts.

	The upshot of this could now see the rise of third party rights as circumventing the issues arising from this case. Could this spell the end of the widespread use of warranties which may finally be falling out of favour?		The upshot of this could now see the rise of third party rights as circumventing the issues arising from this case. Could this spell the end of the widespread use of warranties which may finally be falling out of favour?
		+
		+	----
		+
		+	[[File:Ndunnett profile.jpg\|146x169px]]
		+
		+	This article was created by construction lawyer Najma Dunnett as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].
		+
		+	= Find out more =
		+
		+	=== Related articles on Designing Buildings Wiki ===
		+	*Adjudication.
		+	*Collateral warranties.
		+	*Construction contract.
		+	*Defects.
		+	*Reasonable skill and care.
		+	*Third party rights.
		+
		+	=== External references ===
		+	*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/2665.html England and Wales High Court (Technology and Construction Court) Decisions].

	[[Category:Case_law]]		[[Category:Case_law]]

Designing Buildings: Created page with " Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC) ---- About the time the Housing Grants Construction and Regeneration Act 1996 (“the..."

2013-09-25T07:14:36Z

Created page with " Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC) ---- About the time the Housing Grants Construction and Regeneration Act 1996 (“the..."

New page

Parkwood Leisure Limited v Laing O’Rourke Wales and West Limited [2013] EWHC 2665 (TCC)

----

About the time the Housing Grants Construction and Regeneration Act 1996 (“the Act”) was passed, I recall asking my training principal whether a collateral warranty constituted a construction contract for the purposes of the Act. “Interesting question” came the response. Here’s an interesting answer................

= Background =

Laing O’Rourke (“Laing”) the defendant Contractor was engaged under a standard JCT design and build contract to carry out and complete the design and construction of a swimming and leisure facility for Orion Land and Leisure (Cardiff) Ltd, (“Orion”), the employer. Orion granted a lease to Parkwood Leisure Ltd (“Parkwood”), the claimant, a facilities management company who operated the pool for them.

The building contract contained a term requiring Laing to provide collateral warranties to a number of third parties, among them, Parkwood. Before the works were completed, Laing executed a collateral warranty in favour of Parkwood.

A number of problems arose after the pool was open with Parkwood alleging construction and commissioning defects, mainly defects with the air handling units.

Some of these problems were settled under a settlement agreement made between Parkwood and Laing, however issues with the air handling units persisted so Parkwood sought to claim against Laing under its collateral warranty.

Parkwood brought (CPR Part 8) proceedings for a determination as to whether:
*The collateral warranty amounted to a construction contract for the purposes of the Act which would then enable it to adjudicate its claim.
*The present claim was compromised in the settlement agreement.

= The collateral warranty =

The collateral warranty contained the following clause: “The Contractor warrants, acknowledges and undertakes that [''emphasis added'']:-
*1. It has carried out and ''shall carry out and complete'' the Works in accordance with the Contract;
*3. In the design of Works.....the Contractor...has exercised and ''will continue to exercise'' all reasonable skill and care to be expected of an architect......;
*7. It has complied and ''will continue to comply'' with the terms of regularly and diligently carry out its obligations under the Contract.”

The judge, Mr Justice Akenhead, then looked at the definition of “construction contract” and “construction operations” under sections 104 and 105 of the Act and decided that Parkwood’s collateral warranty was a construction contract as the definitions were widely construed and the Act applies to all contracts related to the carrying out of construction operations. The warranty was subsidiary to the building contract which was itself a construction contract. The judge noted wording in the warranty relating expressly to the carrying out and completing of the works, i.e., a prospective obligation to finish the remaining works.

Not all collateral warranties will be construed as construction contracts for the purposes of the Act; that, of course, depends on the wording of the warranty. The judge indicated that warranties which relate to future performance might be considered construction contracts whereas a pointer against may be that all the works are completed with the Contractor warranting the works after completion.

Parkwood therefore succeeded in obtaining a declaration that its collateral warranty amounted to a construction contract for the purposes of the Act thereby opening the door to adjudication.

= The settlement agreement =

Whilst certain matters relating to the air handling units were settled between the parties in the settlement agreement there was scope to bring claims which did not exist at the date of the agreement. The lesson to be learned here is the old nugget of clear and careful drafting and avoiding ambiguities that can come back to bite by reopening matters previously considered closed.

= Conclusion =

The court’s decision is an unexpected one for practitioners who assumed the Act did not apply to warranties.

Collateral warranties will now be subject to greater scrutiny in the light of this case. We may now see a resistance among contractors and consultants to grant warranties and a desire to perhaps restrict the number and scope of warranties so that their application is limited to be retrospective only. That inevitably means further complications for the negotiation and drafting of warranties resulting in protracted and costly negotiations.

The decision also raises speculation as to the application of the Act’s scheme and payment provisions to warranties considered to be construction contracts.

The upshot of this could now see the rise of third party rights as circumventing the issues arising from this case. Could this spell the end of the widespread use of warranties which may finally be falling out of favour?

[[Category:Case_law]]