Tag: Construction

Bushell v Revenue and Customs: FTTTx 16 Nov 2010

FTTTx Construction Industry Scheme .S 57 FA 2004. Regulation 4 SI 2005/2045. Obligation to deliver a monthly return imposed by s 57 on ‘persons who make payments under construction contracts’ When a person ceased to be one who made payments. Extent of obligation to deliver nil return under Reg 4(10). Where obligation existed whether reasonable excuse for failure – reliance on another. Proportionality – Effect of Human Rights law – SKG(London) ltd TC 00282 considered.

[2010] UKFTT 577 (TC)
Bailii
England and Wales

Construction, Income Tax

Updated: 20 January 2022; Ref: scu.567534

Buckingham v Revenue and Customs: FTTTx 24 Nov 2010

FTTTx SUB-CONTRACTOR – appellant working for father – father and his company owned some 18 house to let – appellant orchestrated refurbishment work for company – HMRC alleged appellant a contractor under the Construction Industry Scheme – appellant acting as agent for father – appeal allowed

[2010] UKFTT 593 (TC)
Bailii
England and Wales

Construction, Income Tax

Updated: 20 January 2022; Ref: scu.567533

J Murphy and Sons Ltd v W Maher and Sons Ltd: TCC 23 May 2016

Part 8 proceedings between a sub-contractor, J. Murphy and Sons Ltd and its earth shifting sub-sub-contractor, W. Maher and Sons Ltd asking about the jurisdiction of an adjudicator, namely, where there is a dispute as to whether there has been a full and final settlement agreement between the contractual parties of the final account, whether the dispute arises ‘under’ the sub-contract or under the alleged settlement agreement or both. ‘

Sir Robert Akenhead
[2016] EWHC 1148 (TCC)
Bailii
England and Wales

Construction, Arbitration

Updated: 17 January 2022; Ref: scu.565559

Gotch and Another v Enelco Ltd: TCC 3 Jul 2015

Claim brought under Part 8 of the CPR for a declaration that the building contract that the Claimants entered into with the Defendant does not entitle the Defendant to refer a dispute to adjudication.

Edwards-Stuart J
[2015] EWHC 1802 (TCC), [2015] TCLR 8, [2015] 4 Costs LR 669
Bailii
England and Wales

Construction, Arbitration, Costs

Updated: 02 January 2022; Ref: scu.550211

Woods Building Services v Milton Keynes Council: TCC 14 Jul 2015

Procurement dispute arising out of a tender process undertaken by the defendant (‘the Council’) for the award of a framework agreement for asbestos removal.

Coulson J
[2015] EWHC 2011 (TCC)
Bailii
England and Wales
Cited by:
Proncipal Judgment – Woods Building Services v Milton Keynes Council (Damages) TCC 14-Jul-2015
. .

Lists of cited by and citing cases may be incomplete.

Construction

Updated: 02 January 2022; Ref: scu.550213

Aspect Contracts (Asbetos) Ltd v Higgins Construction Plc: SC 17 Jun 2015

Aspect had claimed the return of funds paid by it to the appellant Higgins under an adjudication award in a construction contract disute. The claimant had been asked to prpare asbestos surveys and reports on maisonettes which Higgins was to acquire and redevlop. Higgins now appealed againt a decision overturning a high court judgment in its favour.
Held: The appeal failed. A party which had failed in a construction contract arbitration would be entitled to recover sums paid by it if and when the fundamental dispute was in the end decided in its favour. The associated cause of action for the recovery of that sum arose on the date of the first payment.

Lord Mance, Lord Wilson, Lord Sumption, Lord Reed, Lord Toulson
[2015] UKSC 38, [2015] 4 All ER 482, [2015] WLR(D) 261, 160 Con LR 28, [2015] BLR 503, [2015] 1 WLR 2961, [2015] 2 All ER (Comm) 965, [2015] Bus LR 830, UKSC 2014/0021
Bailii, Bailii Summary, WLRD, SC, SC Summary, SC Video
Housing Grants, Construction and Regeneration Act 1996, Scheme for Construction Contracts (England and Wales) Regulations 1998
England and Wales
Citing:
Cited – Davies v Taylor HL 1974
The plaintiff’s husband was killed in a road accident caused by the defendant’s negligence. They were childless. She had deserted him five weeks before his death and thereafter, he learned about her adultery with a fellow employee. He tried to . .
Cited – Jim Ennis Construction Ltd v Premier Asphalt Ltd TCC 24-Jul-2009
The court was asked as to the date of accrual of the cause of action where a losing party to an adjudication brought under Part II of the 1996 Act later begins proceedings to seek a final determination of the matters decided by the adjudicator with . .
At First Instance – Aspect Contracts (Asbestos) Ltd v Higgins Construction Plc TCC 23-May-2013
The claimants had been engaged to provide an asbestos survey. An arbitration claim had gone against them and they appealed. . .
Appeal from – Aspect Contracts (Asbestos) Ltd v Higgins Construction Plc CA 29-Nov-2013
The appeal succeeded. The Scheme implied that any overpayment could be recovered. . .
Cited – Guaranty Trust Co of New York v Hannay and Co CA 1915
A claimant does not need to have a subsisting cause of action against a defendant before the court will grant a claimant a declaration. The court considered the ambiguity in the meaning of the word ‘jurisdiction’: ‘The first and, in my opinion, the . .
Cited – Woolf v Collis Removal Service CA 1947
Claims in tort with a nexus to the contract can be within phrases such as ‘in connection with’ in the context of arbitration clauses . .
Cited – Astro Vencedor Compania Naviera SA v Mabanaft GmbH CA 1971
For an arbitration clause in a contract between parties to be used to enforce arbitration of a tortious claim, the tortious claim must arise out of the contractual matters. In this case damages were sought for the wrongful arrest of a ship in . .
Cited – Empresa Exportadora de Azucar v Industria Azucarera Nacional S.A, The Playa Larga CA 1983
There had been a theft by Cuban sellers of one cargo of sugar, property in which had already passed to the buyers, and non-delivery of a second combined with trickery whereby the intended buyers were nonetheless induced to pay its price. The first . .
Cited – Fillite (Runcorn) Ltd v Aqua-Lift CA 1989
The court considered whether claims arising from misrepresentation or breach of a collateral contrat were claims arising ‘under’ the contract so as to be governed by the disputes provisions in it.
Held: The disputes did not arise ‘under the . .
Cited – Westdeutsche Landesbank Girozentrale v Islington London Borough Council; Kleinwort Benson Ltd v Sandwell Borough Council ChD 23-Feb-1993
A bank, having made payment under an void interest rate swap agreement to a local authority, was entitled to recover the payments made under the equitable doctrine of restitution. It would be wrong to allow the local authorities to enjoy an unjust . .
Cited – P and O Nedloyd BV v Arab Metals Co and Others (‘The UB Tiger’) QBD 22-Jun-2005
The claimants sought to amend their particulars of claim to add a request for declarations with regard to a bill of lading and contract for carriage.
Held: The application to amend was made more than six years after the cause of action . .
Cited – Henderson v Merrett Syndicates Ltd HL 25-Jul-1994
Lloyds Agents Owe Care Duty to Member; no Contract
Managing agents conducted the financial affairs of the Lloyds Names belonging to the syndicates under their charge. It was alleged that they managed these affairs with a lack of due careleading to enormous losses.
Held: The assumption of . .
Cited – Walker Construction (UK) Ltd v Quayside Homes Ltd and Another CA 7-Feb-2014
. .
Cited – Premium Nafta Products Ltd (20th Defendant) and others v Fili Shipping Company Ltd and others; Fiona Trust and Holding Corporation v Privalov HL 17-Oct-2007
The owners of a ship sought to rescind charters saying that they had been procured by bribery.
Held: A claim to rescind a contract by reason of bribery fell within the scope of an arbitration clause under which the parties had agreed to refer . .
Cited – Sempra Metals Ltd v Inland Revenue Commissioners and Another HL 18-Jul-2007
The parties agreed that damages were payable in an action for restitution, but the sum depended upon to a calculation of interest. They disputed whether such interest should be calculated on a simple or compound basis. The company sought compound . .
Cited – Chimimport Plc v G d’Alesio SAS 1994
The phrase ‘arising under’ in a clause referring matters to arbitration is narrower than ‘arising out of’ and the court doubted whether a tortious claim could easily give rise to a dispute ‘under the contract’. . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – Aspect Contracts (Asbestos) Ltd v Higgins Construction Plc CA 29-Nov-2013
The appeal succeeded. The Scheme implied that any overpayment could be recovered. . .

Lists of cited by and citing cases may be incomplete.

Arbitration, Construction

Updated: 01 January 2022; Ref: scu.549063

Heron Bros Ltd v Central Bedfordshire Council (No 2): TCC 17 Apr 2015

[2015] EWHC 1009 (TCC)
Bailii
Citing:
See Also – Heron Bros Ltd v Central Bedfordshire Council TCC 20-Mar-2015
Application to strike out a claim on the ground that the claim form was not served within the prescribed time limit. The claim is a procurement challenge in which the Claimant claims damages and a declaration of ineffectiveness in respect of the . .

Lists of cited by and citing cases may be incomplete.

Construction

Updated: 29 December 2021; Ref: scu.545607

A1 Lofts Ltd v Revenue and Customs: ChD 30 Oct 2009

Lewison J said: ‘The court is often called upon to decide whether a written contract falls within a particular legal description. In so doing the court will identify the rights and obligations of the parties as a matter of construction of the written agreement; but it will then go on to consider whether those obligations fall within the relevant legal description. Thus the question may be whether those rights and obligations are properly characterised as a licence or tenancy (as in Street v Mountford [1985] AC 809); or as a fixed or floating charge (as in Agnew v IRC [2001] 2 AC 710), or as a consumer hire agreement (as in TRM Copy Centres (UK) Ltd v Lanwall Services Ltd [2009] 1 WLR 1375). In all these cases the starting point is to identify the legal rights and obligations of the parties as a matter of contract before going on to classify them.’

Lewison J
[2009] EWHC 2694 (Ch), [2009] BVC 924, [2010] STC 214, [2009] NPC 121
Bailii
England and Wales
Citing:
At VDT – A1 Lofts Ltd and A1 Loft Conversions Ltd v Revenue and Customs VDT 3-Dec-2008
FTTx VALUE ADDED TAX – Supply of services – Loft conversions – Taxpayer agreed with contractors they would be paid by clients out of clients’ accounts – Whether taxpayer project manager on clients’ behalf – . .

Cited by:
Cited – Revenue and Customs v Secret Hotels2 Ltd SC 5-Mar-2014
The Court was asked as to: ‘the liability for Value Added Tax of a company which markets and arranges holiday accommodation through an on-line website. The outcome turns on the appropriate characterisation of the relationship between the company, . .
Cited – Uber Bv and Others v Aslam and Others CA 19-Dec-2018
Uber drivers are workers
The claimant Uber drivers sought the status of workers, allowing them to claim the associated statutory employment benefits. The company now appealed from a finding that they were workers.
Held: The appeal failed (Underhill LJ dissenting) The . .

Lists of cited by and citing cases may be incomplete.

VAT, Construction

Updated: 20 December 2021; Ref: scu.377352

Edlington Properties Limited v J H Fenner and Co Limited: CA 22 Mar 2006

The landlord had assigned the reversion of the lease. There was an outstanding dispute with the tenant defendant who owed arrears of rent, but sought to set these off against a claim for damages for the landlord’s failure to construct the factory in the first place.
Held: The new landlord was not liable for the failings of the old, and the tenant could not set off any claim in damages from the original lessee against arrears of rent: ‘the weight of principle, authority and textbooks all point firmly in the same direction. Where the reversion to a lease is transferred, a tenant cannot set off, against rent falling due after the transfer, a claim for damages he has arising out of a breach by his original landlord of the lease, let alone of the agreement pursuant to which the lease was granted, unless of course the lease specifically provides that he should have that right.’

Lord Justice Pill Lord Justice Neuberger Lord Justice Scott Baker
Times 12-May-2006, [2006] EWCA Civ 403, [2006] 1 WLR 1583
Bailii
Law of Property Act 1925 141, Landlord and Tenant Covenants Act 1995 3
England and Wales
Citing:
Appeal from – Edlington Properties Ltd v J H Fenner and Co Ltd QBD 20-Oct-2005
The landlord sought repayment of arrears of rent. The tenant sought to raise a set off which had arisen against the landlord’s predecessor arising from defects in the property they had constructed.
Held: The tenant had no right of set off. . .
Cited – British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd ChD 19-Dec-1978
Money expended by a tenant on discharging his landlord’s covenants will in appropriate circumstances operate as a partial or a complete discharge so as to furnish a defence at law to a claim for unpaid rent; and where the tenant has suffered damage . .
Cited – Spencer’s Case 1583
An assignee of a lease will take both the benefit and burden of the covenants in the lease provided that there is privity of estate as between the person enforcing the covenant and the person against whom enforcement is sought, and the covenant . .
Cited – Corporation of City of London v Fell and Others HL 3-Dec-1993
The original tenant under a lease was not liable for arrears of rent on a tenancy continued after an assignment and after the original contract term has ended. The right of a transferee of the reversion to recover rent is, both in common law and . .
Cited – Duncliffe v Caefelin Properties Ltd ChD 1989
The defendants had taken an assignment of the reversion of a flat held on a long lease. The assignors had gone into liquidation when in prolonged breach of the lessor’s repairing covenant. The lessee asserted that the effect of s.142 on an . .
Cited – Reeves v Pope CA 1914
The potential landlord agreed with the proposed tenant to build a hotel by a date, and the tenant agreed to take a lease when it was ready. The building was late in completion. The tenant took the lease but without prejudice to his claim for . .
Cited – Pfeiffer GmbH v Arbuthnot Factors Limited 1988
Section 136 by its terms preserves the equitable rule that the debtor can rely on any rights of set-off which arose before he had notice of assignment . . .
Cited – National Provincial Bank Limited v Ainsworth HL 1965
The significance of the distinction between occupation and rights was that although the deserted wife was in actual occupation of the former matrimonial home, the quality of her rights was not such as to be capable of amounting to an overriding . .
Cited – The Mortgage Corporation Ltd v Ubah CA 21-Mar-1996
The respondent mortgagee had obtained an order for possession against the mortgagor freeholder, referred to in the judgment as ‘the Chief’, who had, prior to the mortgage, granted a tenancy to the appellant.
Held: The landlord’s retention of a . .
Cited – Re Arrows Ltd (No 3) ChD 1992
Hoffmann explained the case of Reeves v Pope: ‘The reasoning of the Court of Appeal was that a mortgagee or transferee of a property subject to a lease does not become entitled to the rents . . as an assignee [of] a chose in action by the original . .
Cited – Lee-Parker v Izzett (1) ChD 1971
Money expended by a tenant on discharging his landlord’s covenants will in appropriate circumstances operate as a partial or a complete discharge so as to furnish a defence of set-off at law to a claim for unpaid rent. Justice Goff discussed the . .
Cited – Green v Rheinberg CA 1911
. .
Cited – Federal Commerce Ltd v Molena Alpha Inc; (The ‘Nanfri’) CA 1978
The court considered whether claim as against a shipowner could be set off against sums due under a time charter hire.
Held: Save for any contractual provision to the contrary a tenant is entitled to deduct from the rent payable, so as to . .
Cited – Government of Newfoundland v Newfoundland Railway PC 7-Feb-1888
A railway company and its assignees brought action the Government. Under the contract the company was to build a railway subsidised by the government. The railway was not completed. The parties disputed whether the contract was ‘entire’ and no part . .
Cited – Beall v Smith CA 6-Dec-1873
Lord Justice James discussed the practice in the Court of Chancery on claims brought by people without mental capacity: ‘The law of the Court of Chancery undoubtedly is that in certain cases where there is a person of unsound mind, not so found by . .
Cited – Lotteryking Ltd v AMEC Properties Ltd ChD 1995
The tenant sought to prevent the sale of the landlord’s reversion until the lessor’s repairing obligations had been met. One of the grounds was that on a sale the tenant’s right of set-off would not pass.
Held: An order was refused. Lightman . .
Cited – Famous Army Stores v Meehan 1993
. .
Cited – BOC Group Plc v Centeon Llc and Centeon Bio-Services Inc CA 29-Apr-1999
The court was asked whether a clause in a share sale agreement setting out the payment obligation worked to preclude the purchaser from exercising a right of set-off when the time comes to pay a later instalment of the price.
Held: The appeal . .
Cited – Mellowes Archital Limited v Bell Projects Limited CA 15-Oct-1997
The court referred to ‘the distinction between the common law defence of abatement and the defence of equitable set-off’. . .
Cited – Connaught Restaurants Ltd v Indoor Leisure Ltd CA 17-Sep-1993
The lease provided the tenant would pay the rent ‘without any deduction’.
Held: The words ‘without any deductions’ in a lease were ambiguous and were insufficient to exclude the tenant’s right to claim a set off. Clear words are needed before . .
Cited – Marubeni Corporation v Sea Containers Ltd ComC 17-May-1995
Procedure – set-off – contract for supply of containers – construction of contract – clear words to exclude right of set-off – equitable set-off – abatement – defective containers. The words ‘without deduction’ have been held in the context of a . .

Lists of cited by and citing cases may be incomplete.

Construction, Landlord and Tenant

Updated: 05 December 2021; Ref: scu.241388

Reed v Revenue and Customs: FTTTx 28 Jan 2011

FTTTx INCOME TAX – schedule D – trade – deduction – expenses – building subcontractor – working at different building sites for successive short periods – cost of travel between home and site – appeal succeeds

Jennifer Trigger (Judge)
[2011] UKFTT 92 (TC)
Bailii
England and Wales

Income Tax, Construction

Updated: 11 November 2021; Ref: scu.442829

Balfour Beatty Regional Construction Ltd v Grove Developments Ltd: CA 13 Oct 2016

Contractor’s responsibility for stage payments

Appeal by a building contractor against a decision that there is no entitlement to interim payments in the period after the contractual date for practical completion. The principal issues are (i) how some rather unusual amendments to the standard form building contract should be construed and (ii) how section 109 of the 1996 Act applies in the circumstances of this case.

Longmore, Jackson, Vos LJJ
[2016] EWCA Civ 990, [2016] WLR(D) 522
Bailii, WLRD
Housing Grants, Construction and Regeneration Act 1996 109
England and Wales

Construction, Contract

Updated: 11 November 2021; Ref: scu.570174

Direktor Na Direktsia v Orfey Balgaria Eood: ECJ 19 Dec 2012

dndirektsia_obeECJ2012

ECJ VAT – Directive 2006/112/EC – Articles 63, 65, 73 and 80 – Establishment by natural persons of a building right in favour of a company in exchange for construction services by that company for those persons – Barter contract – VAT on construction services – Chargeable event – When chargeable – Payment on account of the entire consideration – Payment on account – Basis of assessment for a transaction in the event of consideration in the form of goods or services – Direct effect

C Toader, acting P
C-549/11, [2012] EUECJ C-549/11
Bailii
Directive 2006/112/EC

European, VAT, Construction

Leading Case

Updated: 02 November 2021; Ref: scu.468764

Brickfield Properties Ltd v Newton: CA 1971

Court’s Investigation of Construction Claims

The court heard an application to amend pleadings to add a claim about negligent supervision of a construction. Sachs LJ said: ‘Where there are found in completed buildings serious defects of the type here under review the facts relating to design, execution and superintendence are inextricably entangled until such time as the court succeeds in elucidating the position through evidence. The design has inevitably to be closely examined even if the only claim relates to superintendence, and all the more so if the designs are, as is further alleged here, experimental or such as need amplification in the construction progresses. The architect is under a continuing duty to check that his design will work in practice and to correct any errors as they emerge. It savours of the ridiculous for the architect to be able to say, as it was here suggested to him that he could say: ‘true, my design was faulty, but, of course, I saw to it that the contractors followed it faithfully’ and be enabled on that ground to succeed in the action.
The same, or substantially the same set of facts, falls to be investigated in relation to the design claim and the superintendence claim. The plans and specifications and ancillary documents are relevant to the superintendence claim as well as to the designer claim: hence the inability of the defendant to allege prejudice with regard to the preparation of his defence if this appeal is allowed. Accordingly, the ‘new cause of action’ falls within the ambit of RSC Ord. 20 r. 5(5), and it is one which the court has jurisdiction to permit to be pursued’.

Sachs LJ, Edmund Davies LJ
[1971] 1 WLR 862, [1971] 3 All ER 328
England and Wales
Cited by:
Cited – Roberts v Gill and Co Solicitors and Others SC 19-May-2010
The claimant beneficiary in the estate sought damages against solicitors who had acted for the claimant’s brother, the administrator, saying they had allowed him to take control of the assets in the estate. The will provided that property was to be . .

Lists of cited by and citing cases may be incomplete.

Limitation, Construction

Leading Case

Updated: 01 November 2021; Ref: scu.415957

Steel v Young: SCS 11 Jan 1907

‘The main question to be disposed of under this appeal is that which is raised by the fact that the pursuer in building the walls of the house used milled lime instead of cement mortar as required by the specification.
In making that departure from the specification the pursuer was acting in accordance with the orders of the architect, but I am of opinion that nevertheless he must be regarded as being in breach of his contract in a question with the defender if the architect was not authorised by the latter to substitute the one material for the other.’

Lord Low
[1907] ScotCS CSIH – 4, 1907 SC 360, [1907] SLR 44 – 291
Bailii, Bailii
Scotland

Construction, Contract

Leading Case

Updated: 01 November 2021; Ref: scu.279272

East Ham Corporation v Bernard Sunley and Sons Ltd: HL 1965

In cases in which the plaintiff is seeking damages for the defective performance of a building contract, which is a contract for labour and materials, the normal measure of his damages is the cost of carrying out remedial work, or re-instatement. Reasonableness is a part of the primary assessment of damages as well as of mitigation of damage.
Lord Cohen said: ‘the learned editors of Hudson’s Building and Engineering Contracts, 8th ed. (1959) say at p.319 that there are in fact three possible bases of assessing damages, namely, (a) the cost of reinstatement; (b) the difference in cost to the builder of the actual work done and work specified; or (c) the diminution in value of the work due to the breach of contract. They go on: ‘There is no doubt that wherever it is reasonable for the employer to insist upon reinstatement the courts will treat the cost of reinstatement as the measure of damage.’ In the present case it could not be disputed that it was reasonable for the appellants to insist upon reinstatement and in these circumstances it necessarily follows that on the question of damage the trial judge arrived at the right conclusion.’
Lord Upjohn stated that in a case of defective building work reinstatement was the normal measure of damages.

Lord Upjohn, Lord Guest, Lord Cohen and Lord Pearson
[1966] 1 AC 406, [1965] 3 All ER 619
England and Wales
Cited by:
Considered – Ruxley Electronics and Construction Ltd v Forsyth HL 29-Jun-1995
Damages on Construction not as Agreed
The appellant had contracted to build a swimming pool for the respondent, but, after agreeing to alter the specification to construct it to a certain depth, in fact built it to the original lesser depth, Damages had been awarded to the house owner . .
Cited – Alfred Mcalpine Construction Limited v Panatown Limited HL 17-Feb-2000
A main contractor who was building not on his own land, would only be free to claim damages from a sub-contractor for defects in the building where the actual owner of the land would not also have had a remedy. Here, the land owner was able to sue . .
Cited – Darlington Borough Council v Wiltshier Northern Ltd and Others CA 29-Jun-1994
The council owned land on which it wanted to build a recreational centre. Construction contracts were entered into not by the council but by a finance company, the building contractors being the respondents Wiltshier Northern Ltd. The finance . .
Cited – Pegler Ltd v Wang (UK) Ltd TCC 25-Feb-2000
Standard Conract – Wide Exclusions, Apply 1977 Act
The claimant had acquired a computer system from the defendant, which had failed. It was admitted that the contract had been broken, and the court set out to decide the issue of damages.
Held: Even though Wang had been ready to amend one or . .
Cited – Darlington Borough Council v Wiltshier Northern Ltd CA 28-Jun-1994
The plaintiff council complained of the work done for it by the defendant builder.
Held: Steyn LJ said: ‘in the case of a building contract, the prima facie rule is cost of cure, i.e., the cost of remedying the defect: East Ham Corporation v. . .

Lists of cited by and citing cases may be incomplete.

Damages, Construction

Leading Case

Updated: 01 November 2021; Ref: scu.192627

Swain v Revenue and Customs: FTTTx 20 May 2013

FTTTx VAT – DIY residential conversion – conversion of barn to house – planning permission limiting occupation of property to manager or proprietor of holiday accommodation business to be operated from adjacent barns (for which planning permission also obtained) – whether conversion work was carried out in course or furtherance of a business – no – whether the separate use, or disposal of the property was prohibited by the planning permission for the purposes of Note (2)(c) to Group 5, Schedule 8 VAT Act 1994 – yes – appeal dismissed

[2013] UKFTT 316 (TC)
Bailii
England and Wales

VAT, Construction

Leading Case

Updated: 31 October 2021; Ref: scu.513464

Homer Burgess Ltd v Chirex (Annan) Ltd: OHCS 25 Jan 2000

Although an adjudicator’s decision would normally be binding on the parties pending an appeal, that was not the case where the mistake alleged was as to his jurisdiction. In such cases the decision was reviewable, and was ineffective as a decision under the Act.
163696
Times 25-Jan-2000, [1999] ScotCS 264
Bailii
Housing Grants Construction and Regeneration Act 1996 108
Scotland
Citing:
Cited – Yarmouth v France CA 11-Aug-1887
The plaintiff was employed by the defendant to drive carts. He objected that the horse had a vicious nature, but was obliged to drive it in any event. The horse kicked him.
Held: For the purposes of the 1880 Act, the plaintiff was an employee, . .

Lists of cited by and citing cases may be incomplete.
Updated: 14 September 2021; Ref: scu.81458

Ruxley Electronics and Construction Ltd v Forsyth: CA 7 Jan 1994

In 1986, the defendant, wanted a swimming pool adjoining his house. He contracted with the plaintiffs. The contract price for the pool, with certain extras, was 17,797.40 pounds including VAT. The depth of the pool was to be 6 ft 6 in at the deep end. Later Mr Forsyth wanted the depth increased to 7ft 6in. He had a conversation with Mr Hall, who owned or controlled the plaintiff company. Mr Hall agreed to increase the depth without extra charge, but built it to the original specification.
Held: The damages payable for the incorrect building of a swimming pool may be the cost of rebuilding it according to correct specification.
Dillon LJ, dissented, saying: ‘If the evidence had been that the value of the pool as constructed was less than the value of a pool with a depth of 7 ft 6 in as contracted for, but that the loss of value was substantially less than the andpound;21,560 cost of reinstatement, then, given the finding that the pool as constructed is still deep enough to be perfectly safe to dive into, the obvious course would have been to award Mr Forsyth the loss of value. The basis of that would have been reasonableness. He has no absolute right to be awarded the cost of reinstatement. I see no reason, therefore, why if there has been no loss in value, he should automatically become entitled to the cost of reinstatement, however high. That would be a wholly unreasonable conclusion in law. Accordingly, I agree with the judge’s approach and would dismiss this appeal.’
Staughton LJ held that Mr Forsyth was entitled to the cost of reinstatement, however expensive, since there was no other way of giving him what he had contracted for. While reasonableness lies at the heart of the rule that a plaintiff must mitigate his damage, it plays no part at all where there is no cheaper remedy available for the defendant’s breach of contract: ‘What money will place him ‘in the same situation . . as if the contract had been performed?’ The answer, on the facts of this case, is the cost of replacing the pool. Otherwise, a builder of swimming pools need never perform his contract. He can always argue that 5 ft in depth is enough for diving, even if the purchaser has stipulated for 6, 7 or 8 ft, and pay no damages. In my judgment the key lies in the proposition of Oliver J that reasonableness is a matter of mitigation. It is unreasonable of a plaintiff to claim an expensive remedy if there is some cheaper alternative which would make good his loss. Thus he cannot claim the cost of reinstatement if the difference in value would make good his loss by enabling him to purchase the building or chattel that he requires elsewhere. But if there is no alternative course which will provide what he requires, or none which will cost less, he is entitled to the cost of repair or reinstatement even if that is very expensive . . Since there is no other alternative which will provide that which he has contracted for, he is entitled to incur that expense and charge it to the defendant.’
It was irrelevant that Mr Forsyth did not intend to rebuild the pool. What a plaintiff does with his damages is no concern to the defendant.
Mann LJ accepted that there may be cases where it would be unreasonable to award the cost of rectifying a failed project. But this was not such a case, because the bargain was for what Mann LJ called ‘a personal preference’. Although the value of the pool was the same, as found by the judge, Mr Forsyth was entitled to have his personal preference satisfied. The only way that could be done was by rebuilding the pool. Since the majority of the court awarded the full cost of reinstatement, they set aside the judge’s award of andpound;2,500 general damages for loss of amenity.
Mann LJ, Dillon LJ, Staughton LJ
Gazette 16-Feb-1994, Times 07-Jan-1994, [1994] 3 All ER 801, [1994] 1 WLR 650
England and Wales
Cited by:
Appeal from – Ruxley Electronics and Construction Ltd v Forsyth HL 29-Jun-1995
Damages on Construction not as Agreed
The appellant had contracted to build a swimming pool for the respondent, but, after agreeing to alter the specification to construct it to a certain depth, in fact built it to the original lesser depth, Damages had been awarded to the house owner . .
Cited – Hunter and Others v Canary Wharf Ltd HL 25-Apr-1997
The claimant, in a representative action complained that the works involved in the erection of the Canary Wharf tower constituted a nuisance in that the works created substantial clouds of dust and the building blocked her TV signals, so as to limit . .
Cited – Channel Island Ferries Ltd v Cenargo Navigation Ltd (The Rozel) QBD 5-Apr-1994
Arbitrator to award all costs even if award much less than original claim.
Phillips J said: ‘It is always necessary to exercise the greatest care before applying the reasoning in one case to a different factual situation, and this is . .

Lists of cited by and citing cases may be incomplete.
Updated: 20 August 2021; Ref: scu.88940

J P Whitter (Waterwell Engineers) Ltd v HM Revenue and Customs: CA 24 Nov 2016

Important point of principle concerning the power of HMRC, to cancel the registration of a taxpayer for gross payment under the legislation which governs the Construction Industry Scheme.
Jackson, Christopher Clarke, Henderson LJJ
[2016] EWCA Civ 1160, [2016] WLR(D) 630, [2016] STI 3058, [2016] BTC 45, [2017] STC 149
Bailii, WLRD
Finance Act 2004, Income Tax (Construction Industry Scheme) Regulations 2005
England and Wales
Citing:
At FTTTx – J P Whitter (Waterwell Engineers) Ltd v Revenue and Customs FTTTx 18-Oct-2012
FTTTxp INCOME TAX – construction industry scheme – cancellation of gross payment status – s66 Finance Act 2004 – HMRC discretion – whether properly exercised – Failure to take into account effect of cancellation . .
At UTTC – Revenue and Customs v J P Whitter (Water Well Engineers) Ltd UTTC 13-Jul-2015
UTTC INCOME TAX – construction industry scheme – cancellation of gross payment status – s 66 Finance Act 2004 – HMRC discretion – scope of – whether properly exercised – failure to take into account effect of . .

Cited by:
At CA – JP Whitter (Water Well Engineers) Ltd v Revenue and Customs SC 13-Jun-2018
The taxpayers registration under the Construction Industry Scheme had been withdrawn. The Court was now asked whether HMRC are obliged, or at least entitled, to take into account the impact on the taxpayer’s business of the cancellation of its . .

Lists of cited by and citing cases may be incomplete.
Updated: 27 July 2021; Ref: scu.571935

London Borough of Barking and Dagenham v Stamford Asphalt Company Limited v General Accident Fire and Life Assurance Corporation Plc v Martin Daniels: CA 20 Mar 1997

[1997] EWCA Civ 1293
Bailii
Citing:
Cited – Mark Rowlands v Berni Inns Ltd CA 1985
The plaintiff owned the freehold and had let the basement to the defendant. The plaintiff insured the building. The defendant covenanted to pay to the plaintiff an insurance rent equal to the proportionate cost of insuring the part of the building . .

These lists may be incomplete.
Updated: 29 December 2020; Ref: scu.141689

Aspect Contracts (Asbestos) Ltd v Higgins Construction Plc: CA 29 Nov 2013

The appeal succeeded. The Scheme implied that any overpayment could be recovered.
References: [2013] EWCA Civ 1541, 151 Con LR 72, [2013] WLR(D) 463, [2014] BLR 79, [2014] 1 WLR 1220, [2013] 2 CLC 1019, [2014] CILL 3449, [2014] Bus LR 367, [2013] 49 EG 77
Links: Bailii
Judges: Longmore, Rimer, Tomlinson LJJ
Statutes: Housing Grants, Construction and Regeneration Act 1996 108(5), Scheme for Construction Contracts (England and Wales) Regulations 1998
Jurisdiction: England and Wales
This case cites:

This case is cited by:

  • Appeal from – Aspect Contracts (Asbetos) Ltd v Higgins Construction Plc SC 17-Jun-2015 (, [2015] UKSC 38, [2015] 4 All ER 482, [2015] WLR(D) 261, 160 Con LR 28, [2015] BLR 503, [2015] 1 WLR 2961, [2015] 2 All ER (Comm) 965, [2015] Bus LR 830, , , UKSC 2014/0021, , , )
    Aspect had claimed the return of funds paid by it to the appellant Higgins under an adjudication award in a construction contract disute. The claimant had been asked to prpare asbestos surveys and reports on maisonettes which Higgins was to acquire . .
  • Cited – Aspect Contracts (Asbetos) Ltd v Higgins Construction Plc SC 17-Jun-2015 (, [2015] UKSC 38, [2015] 4 All ER 482, [2015] WLR(D) 261, 160 Con LR 28, [2015] BLR 503, [2015] 1 WLR 2961, [2015] 2 All ER (Comm) 965, [2015] Bus LR 830, , , UKSC 2014/0021, , , )
    Aspect had claimed the return of funds paid by it to the appellant Higgins under an adjudication award in a construction contract disute. The claimant had been asked to prpare asbestos surveys and reports on maisonettes which Higgins was to acquire . .

These lists may be incomplete.
Last Update: 23 September 2020; Ref: scu.518494

Kirkby v Hughes; Chd 22 Feb 1993

References: Ind Summary 22-Feb-1993, (1993) 65 TC 532
Ratio: Income tax was payable under Schedule D on the sale of a builder’s own house. He was shown to have been, in effect, trading taking into account his past record, and doubts about his intention ever to occupy the house as his residence. Some element of permanent residence was required to apply for relief.
Statutes: Income and Corporation Taxes Act 1988
This case is cited by:

  • Cited – Longson v HM Inspector of Taxes CA (Bailii, [2001] EWCA Civ 364)
    The taxpayer disposed of his farmhouse, and sought exemption from Capital Gains Tax under sections 101 and 102 of the 1989 Act. The Revenue said it had not been his only or main residence. Contracts had been exchanged for its purchase in 1983, but . .

(This list may be incomplete)

Last Update: 31-Aug-16
Ref: 82806

Island Contract Management (UK) Ltd v Revenue and Customs; UTTC 28 Aug 2015

References: [2015] UKUT 472 (TCC)
Links: Bailii
UTTC Construction Industry Scheme – notices of determination – whether UK contractor obliged to make deductions under the scheme in respect of payments made to its Isle of Man parent company – FA 2004 Sections 57 to 67 – Income Tax (Construction Industry Scheme) Regulations 2005 – appeals dismissed
Last Update: 16-Oct-15 Ref: 553195

HMRC v SL; UTTC 19 Nov 2009

References: [2009] UKUT 244 (TCC), [2010] STC 486, [2010] BVC 1503, [2010] STI 555
Links: Bailii
UTTC ZERO-RATING – alterations to listed building – new building in the curtilage of listed building – planning permission that it ‘shall only be used for purposes either incidental or ancillary to the residential use’ of the main listed building – whether a prohibition on separate use (Note 2(c) VATA 1994 Sched 8 Group 6) – no – appeal allowed

Radford v De Froberville; 2 Jan 1977

References: [1977] 1 WLR 1262
Coram: Oliver J
A contract was made for the sale of a plot of land adjoining a house belonging to the plaintiff (the vendor) but occupied by his tenants, under which the defendant (the purchaser) undertook to build a house on the plot and also to erect a wall to a certain specification on the plot so as to separate it from the plaintiff’s land. The plaintiff obtained judgment against the defendant for damages for breach of contract by reason of her failure to erect the dividing wall, but an issue arose as to the measure of the damages. The defendant having failed to build the dividing wall on the land purchased from the plaintiff, the plaintiff proposed to build a dividing wall on his own land, and claimed the cost of doing so from the defendant; whereas the defendant maintained that the appropriate measure of damages was the consequent diminution in the value of the plaintiff’s property, which was nil.
Held: The court described the distinction made in the Liesbosch between a plaintiff’s capacity to mitigate his loss and his duty to do so: ‘No doubt the measure of damages and the plaintiff’s duty and ability to mitigate are logically distinct concepts (see for instance, the speech of Lord Wright in Liesbosch (Dredger) v SS Edison (Owners) [1933] AC 449, 456-469). But to some extent, at least, they are mirror images . .’ A contracting party should not use the remedy of damages to recover ‘an uncovenanted profit.’ However: ‘If [the plaintiff] contracts for the supply of that which he thinks serves his interests – be they commercial, aesthetic or merely eccentric – then if that which is contracted for is not supplied by the other contracting party I do not see why, in principle, he should not be compensated by being provided with the cost of supplying it through someone else or in a different way, subject to the proviso, of course, that he is seeking compensation for a genuine loss and not merely using a technical breach to secure an uncovenanted profit.’ It was for the plaintiff to judge what performance he required in exchange for the price. The court should honour that choice.
Oliver J said: ‘In the instant case, the plaintiff says in evidence that he wishes to carry out the work on his own land and there are, as it seems to me, three questions that I have to answer. First, am I satisfied on the evidence that the plaintiff has a genuine and serious intention of doing the work? Secondly, is the carrying out of the work on his own land a reasonable thing for the plaintiff to do? Thirdly, does it make any difference that the plaintiff is not personally in occupation of the land but desires to do the work for the benefit of his tenants?’
This case cites:

  • Cited – Liesbosch Dredger (Owners of) -v- Owners of SS Edison, The Liesbosch HL ([1933] AC 449, [1933] All ER Rep 144, [1933] 149 LT 49, Bailii, [1933] UKHL 2)
    The ship Edison fouled the moorings of the Liesbosch resulting in the total loss of the dredger when it sank. It had been engaged on work in the harbour under contract with the harbour board. All the owners’ liquid resources were engaged in the . .
  • Cited – Jackson -v- Horizon Holidays Ltd CA ([1975] 1 WLR 1468, Bailii, [1974] EWCA Civ 12, [1975] 3 All ER 92)
    A family claimed damages for a disappointing holiday. The generous measure of damages given to the father was that the father was being fully compensated for his own mental distress, but the rule of privity of contract operated to bar the claim for . .
  • Cited – Tito -v- Waddell (No 2); Tito -v-Attorney General ChD ([1977] Ch 106, [1977] 3 All ER 129, [1977] 3 WLR 972)
    Equity applies its doctrines to the substance, not the form, of transactions. In respect of the rule against self dealing for trustees ‘But of course equity looks beneath the surface, and applies its doctrines to cases where, although in form a . .

This case is cited by:

  • Cited – Lagden -v- O’Connor HL (House of Lords, [2003] UKHL 64, Bailii, Times 05-Dec-03, [2004] 1 AC 1067, [2004] 1 All ER 277, [2003] 3 WLR 1571, [2004] Lloyd’s Rep IR 315, [2004] RTR 24)
    The parties had been involved in a road traffic accident. The defendant drove into the claimant’s parked car. The claimant was unable to afford to hire a car pending repairs being completed, and arranged to hire a car on credit. He now sought . .
  • Approved – Dodd Properties (Kent) Ltd -v- Canterbury City Council CA ([1980] 1 WLR 433, Bailii, [1980] 1 All ER 928, [1979] EWCA Civ 4)
    The defendants had, in the course of building operations, caused nuisance and damage to the plaintiff’s building. The dispute was very lengthy, the costs of repair increased accordingly, and the parties now disputed the date at which damages fell to . .
  • Cited – Alfred Mcalpine Construction Limited -v- Panatown Limited HL (Times 15-Aug-00, House of Lords, Gazette 05-Oct-00, Bailii, [2000] UKHL 43, [2000] 4 All ER 97, [2000] 3 WLR 946, [2001] 1 AC 518)
    A main contractor who was building not on his own land, would only be free to claim damages from a sub-contractor for defects in the building where the actual owner of the land would not also have had a remedy. Here, the land owner was able to sue . .
  • Cited – Golden Strait Corporation -v- Nippon Yusen Kubishka Kaisha (‘The Golden Victory’) HL (Bailii, [2007] UKHL 12, Times 30-Mar-07, [2007] 2 Lloyds Rep 164, [2007] Bus LR 997, [2007] 3 All ER 1, [2007] 2 AC 353, [2007] 1 CLC 352, [2007] 2 WLR 691, [2007] 2 All ER (Comm) 97)
    The claimant sought damages for repudiation of a charterparty. The charterpary had been intended to continue until 2005. The charterer repudiated the contract and that repudiation was accepted, but before the arbitrator could set his award, the Iraq . .
  • Cited – Johnson -v- Agnew HL ([1980] AC 367, [1979] 2 WLR 487, [1979] 1 All ER 883)
    The seller had obtained a summary order for specific performance of a contract for the sale of land against the buyer.
    Held: The breach was continuing and was still capable of being remedied by compliance with the order for specific . .
  • Cited – Alcoa Minerals of Jamaica Inc -v- Herbert Broderick PC (Times 22-Mar-00, Bailii, PC, PC, [2002] 1 AC 371, [2000] UKPC 11, (Appeal No 68 of 1998))
    (Jamaica) Damage had been caused to the claimant’s property, but, because of his lack of funds, he was dependent upon the receipt of the damages to carry out the works of repair necessary. By the time the matter came to trial, inflation meant that . .
  • Cited – Ruxley Electronics and Construction Ltd -v- Forsyth HL (Independent 12-Jul-95, Gazette 06-Sep-95, Times 03-Jul-95, [1996] 1 AC 344, [1995] 3 WLR 118, Bailii, [1995] UKHL 8, [1995] CLC 905, [1995] 3 All ER 268)
    The appellant had constructed to build a swimming pool for the respondent, but, after agreeing to alter the sepcification to construct it to a certan depth, in fact built it to the original lower depth, Damages had been awarded to the house owner . .

George Fisher Holding Limited (Formerly George Fisher (Great Britain) Limited v Multi Design Consultants Limited, Roofdec Limited, Severfield-Reeve Plc, Davis Langdon and Everest: TCC 6 Apr 1998

References: [1998] EWHC Technology 329
Links: Bailii
This case cites: