A party making any amendments to or agreeing terms without consideration of the possible consequences may take a hit to its cash flow, the lifeblood of a company’s operations. Solicitor Adam Hiscox reports. Above: The dispute related to the Peninsula Tower project This was the position that Balfour Beatty found
A surge in demand has taken the value of contracts awarded for new office builds to peaks not seen since before the recession. Research has revealed that around £2 billion worth of contracts for office construction were agreed in the first three months of 2016. This is roughly similar to
The government has approved a third runway at Heathrow to expand UK airport capacity. This Heathrow expansion will bring economic benefits of up to £61 billion. A new runway at Heathrow will bring economic benefits to passengers and the wider economy worth up to £61 billion. Up to 77,000 additional local
Wates Construction has been appointed to build three student accommodation projects Select Property Group that are together worth more than £130m to the contractor. The contracts are for three Vita Student schemes at sites in Manchester, Newcastle and York. All schemes are programmed to complete in September 2017. The largest
The first artists’ impressions of the new Burrell Collection have been unveiled just days after the Glasgow art gallery and museum closed its doors to enable work to begin on the £66 million refurbishment. Designed by John McAslan and Partners and Event Communications, the blueprints reveal plans to modernise and
A party making any amendments to or agreeing terms without consideration of the possible consequences may take a hit to its cash flow, the lifeblood of a company’s operations. Solicitor Adam Hiscox reports. Above: The dispute related to the Peninsula Tower project This was the position that Balfour Beatty found itself in, in the case of Grove Developments Ltd v Balfour Beatty Regional Construction Ltd. Although Balfour may have been fully aware of the terms that it was signing up to and the possible risks, this case nevertheless highlights the need for parties to be vigilant when negotiating, and to consider the implications of amending the payment terms of standard form contracts such as the JCT. The project concerned the design and construction of the Peninsula Tower, a 23-storey hotel and serviced apartments adjoining the O2 Arena complex on Greenwich Peninsula in London. The contract sum was in excess of £120m. The contract was based on a JCT Design and Build Contract 2011. The contract included amendments to the payment provisions. The works commenced in July 2013 with a date for completion of 22 July 2015. The works were delayed. Notably the parties agreed that the contract was to provide for stage payments, the details of which were “to be agreed within two weeks from the date of contract”. Whilst the parties’ agreed a schedule of payments later than two weeks from the date of the contract, the parties were in agreement that their “Agreed Schedule” formed part of the contract. The Agreed Schedule specified 23 dates on which Balfour could make applications for interim payments. The dates covered the period from September 2013 up to July 2015, in line with the anticipated contract duration. The final date for each interim payment was 28 days from the due date (being the Valuation Date in the Agreed Schedule), although the Agreed Schedule referred to a final date for payment of 30 days from the due date. The payer was obliged to issue its pay less notice no later than 3 days before the final date for payment. The dispute The contract works were delayed beyond the date for completion. As a result, Balfour issued interim application number 24 on 21st August, claiming some £23m. Grove served a pay less notice on 15th September. By 21st August, the parties had already been trying to agree new payment dates beyond interim application 23. However, there appeared to be no consensus about what, if anything, had been agreed. In November 2015, Balfour started adjudication proceedings against Grove. Grove, while reserving its position regarding the adjudicator’s jurisdiction, served a response in the adjudication in December, and issued Part 8 proceedings for declaratory relief shortly afterwards. The questions for the court to determine were: Was there a contractual right for Balfour to make interim application 24 and further interim applications beyond the original agreed Schedule? What was the final date for payment and was Grove’s pay less notice valid? The judge decided that Balfour had no contractual right to make or be paid its application 24 or any further applications. Notwithstanding that the judge found in Grove’s favour regarding the first issue, the judge commented that he would have found in favour of Grove’s position that its pay less notice was valid. When reaching its decision on the first question, the Court commented that:- · While it might be useful to consider interpreting a contract’s terms in light of commercial common sense where the terms are ambiguous, the Court should not “strain to find ambiguity where none exists”. · The parties amended the stage payments to provide for 23 payments in the agreed Schedule and that Schedule worked with the other payment terms of the contract. Therefore the parties had an operable and agreed payment mechanism. The need to rely on the Scheme for Construction Contracts 1998 (as amended), even in part, therefore fell away. The Court also reiterated its accord with previous case law which ruled that the Scheme will not be imported wholescale where parts of the Scheme could be used to supplement existing and perfectly workable payment terms of a contract. · Section 109(1) of the Construction Act, which calls for interim payments to be provided for construction contracts of more than 45 days’ duration, does not require a construction contract to provide for interim payments covering all work under the contract and that this would be the position even if it were not for section 109(2) which gives the parties freedom to choose the amounts of the payments and the intervals when they become due. The court rejected the arguments from Balfour that: · It was an implied term of the contract that the right to make interim applications would extend beyond application 23 – this would be inconsistent with what had expressly been agreed; the Agreed Schedule’s dates were mere examples of the dates for its valuations. · The parties had varied the Agreed Schedule beyond application 23. While some attempts were made to negotiate an extension to the Agreed Schedule, the Court noted that at no time during the negotiations was there agreement as to the terms. · Payments should continue to be made monthly and that the dates in the Agreed Schedule were mere examples of those payments. The court said that the Agreed Schedule was not an example of monthly payment, neither was it akin to stage payments which were based on the contractor’s progress of the works. The parties were bound by what they had agreed in the Agreed Schedule. · Grove was barred from contending that it had no right to make payment applications after application 23 on the basis that Grove had issued payment certificates in respect of the applications (albeit it had not paid them). The Court considered that this was a classic example of an attempt to use the principle of estoppel as a sword, rather than a shield. Conclusion Although Balfour was in a bad commercial position as a result of
A surge in demand has taken the value of contracts awarded for new office builds to peaks not seen since before the recession. Research has revealed that around £2 billion worth of contracts for office construction were agreed in the first three months of 2016. This is roughly similar to the levels seen in the years before the financial crash of 2007 and 2008. The research has been carried out by construction industry analysts Barbour ABI. It shows that new office construction is taking place throughout the country, with the vast majority of projects under way in London. In recent years, it is thought there has been a shift away from the capital to cheaper locations in the UK’s other major cities. Separate research from property advisers JLL indicates renewed demand for office building in Manchester, Birmingham and Leeds. Bristol, Edinburgh and Glasgow are also enjoying a boom in pre-lets for offices. A further factor driving the commercial construction surge is thought to be the shortage of high-quality buildings in popular locations. This shortfall follows the decline in bank lending seen in the years after the financial crash. But now the research from Barbour ABI suggests that construction firms are seeing an increase in activity. Michael Dall, Barbour ABI’s chief economist, said the positive picture is likely to continue throughout the rest of the year. Major office projects currently under construction include the £90 million Waterloo Street building in Glasgow. In addition, Forbury Place in Reading is said to be worth in the region of £50m. Manchester could soon become a focus for the construction of new offices. Barbour ABI forecasts suggest that an additional three million square feet of office space will be needed in the next decade to keep pace with growth expectations. The analysis comes as research from the CITB shows that growth in the construction sector is set to spur on the creation of new jobs. According to the Construction Skills Network Report, more than 230,000 jobs are set to be created by 2020. To find out more information about jobs in the construction industry, visit GoConstruct. Source link
The government has approved a third runway at Heathrow to expand UK airport capacity. This Heathrow expansion will bring economic benefits of up to £61 billion. A new runway at Heathrow will bring economic benefits to passengers and the wider economy worth up to £61 billion. Up to 77,000 additional local jobs are expected to be created over the next 14 years and the airport has committed to create 5,000 new apprenticeships over the same period. Transport secretary Chris Grayling said: “The step that government is taking today is truly momentous. I am proud that after years of discussion and delay this government is taking decisive action to secure the UK’s place in the global aviation market – securing jobs and business opportunities for the next decade and beyond. “This is an important issue for the whole country. That is why the government’s preferred scheme will be subject to full and fair public consultation. Of course it is also hugely important for those living near the airport. That is why we have made clear that expansion will only be allowed to proceed on the basis of a world class package of compensation and mitigation worth up to £2.6 billion, including community support, insulation, and respite from noise – balancing the benefits and the impacts of expansion.” Expansion at the airport will better connect the UK to long haul destinations across the globe and to growing world markets including in Asia and South America, bringing a boost to trade. Despite the increase in flights Heathrow Airport Ltd has made firm commitments to noise reduction. The government will propose that a six-and-a-half hour ban on scheduled night flights will be introduced for the first time at Heathrow and will make more stringent night noise restrictions a requirement of expansion. In addition, the government proposes new legally binding noise targets, encouraging the use of quieter planes, and a more reliable and predictable timetable of respite for those living under the final flight path. The airport has also pledged to provide more than £700 million for noise insulation for residential properties. Modernising use of the air space will also boost the sector and will help to further reduce noise and carbon emissions. In response to the announcement, Philippa Oldham, head of transport and manufacturing at the Institution of Mechanical Engineers, said: “This is so near and yet so far. Without clear view from government on its support for expansion at Gatwick and Birmingham airports, investors are still unable to take a long-term view on how to future-proof UK airport capacity. “The year of consultation means yet more uncertainty, at a time when we need to be definite about our industrial strategy. We need to use airport capacity in the South East to boost the whole UK economy. Air freight is an important contributor, with a particularly important role in supporting trade with countries outside the EU. This delay is therefore particularly worrying following the Brexit vote. “For local communities, the expansion of capacity helps support economic growth and employment as well as training and apprenticeship opportunities. A key factor for Heathrow is that government should look to incentivise electric and hybrid technology to the vehicles that service the airport.” Mick Rix, GMB union’s national officer for transport and distribution, commented: “This not only protects the 80,000 jobs directly employed at the airport but will increase to a further 114,000 jobs that will be needed, and 10,000 local apprenticeship schemes. Expansion also means that the delays people experience in their current Heathrow travel experience, will be severely minimised.” The Mayor of London, Sadiq Khan, added: “This is the wrong decision for London and the whole of Britain. The government is running roughshod over Londoners’ views – just five months ago I was elected as Mayor on a clear platform of opposing a new runway at Heathrow, a position that was shared by the Conservative, Liberal Democrat, Green and UKIP candidates in that election. “A new runway at Heathrow will be devastating for air quality across London – air pollution around the airport is already above legal levels of NO2. “Heathrow already exposes more people to aircraft noise than Paris CDG, Frankfurt, Amsterdam, Munich and Madrid combined. A third runway would mean an extra 200,000 people impacted, exposing 124 more schools and 43,200 more schoolchildren to an unacceptable level of noise. “An expanded Gatwick would have boosted our economy without causing these huge air and noise pollution problems and it could be built quicker and cheaper.” Paul Everitt, ADS group chief executive, commented: “As demand for air travel increases, UK airlines are expected to invest around £60 billion in new aircraft over the next 20 years. For UK aerospace companies this represents major opportunities for growth and a sustained economic return for the nation’s finances.” Grahame Carter, operations director at engineering recruitment specialist Matchtech, added: “The expansion of Heathrow will inject a great sense of confidence into the infrastructure sector. There is a substantial pre-existing talent pool in the UK, particularly within the Buildings and Highways sectors, and this coupled with transferable skills from other infrastructure markets as well as the upskilling of existing workforces means we are well prepared to deliver this flagship aviation project. “While we are well prepared within the UK, the scale of the Heathrow expansion will inevitably call for skilled professionals from overseas. Depending on the nature of the UK’s departure from the European Union, we may face challenges importing qualified engineers, which would significantly narrow the talent pool available for this scheme.”
Wates Construction has been appointed to build three student accommodation projects Select Property Group that are together worth more than £130m to the contractor. The contracts are for three Vita Student schemes at sites in Manchester, Newcastle and York. All schemes are programmed to complete in September 2017. The largest of the three, worth £60.2m, is for the construction of 748 Vita Student beds at Manchester’s Circle Square, the former BBC site on Oxford Road. The second contract, valued at £47.7m, is for a Vita Student Village in York to house 659 students in 15 three- and four-storey buildings across a 6.3 acre site. This includes the refurbishment of a former convent building. Thirdly, Wates will also construct 331 beds at Select’s second Newcastle-based Vita Student development, which is a £23.8m development of 10 storeys at Strawberry Place near St James’ Park. “We’re pleased to announce this partnership with Wates today on three of our most high-profile developments,” said Select Property Group chief commercial officer Mark Oakes. “We are a rapidly expanding business with over 4,500 units currently in development in the North of England across our Vita Student, CitySuites and Affinity Living brands.” He added: “At a significant time of growth, it’s important for us to build long-lasting strategic partnerships with industry partners that we are confident can deliver on time and budget and share our commitment to produce exceptional, quality buildings that our customers want to live in.” Phil Harrison, managing director of Wates Construction Midlands and North, said: “The buoyancy of the private residential market in the north is in part being driven by an increased appetite for premium student accommodation, a demand that Select Property Group is leading the way in addressing. Select currently has nine Vita Student residences at sites in Bristol, Exeter, Liverpool, Manchester, Newcastle, Sheffield and Southampton. Five further residences are in development in Edinburgh, Glasgow, Manchester, Newcastle and York.
The first artists’ impressions of the new Burrell Collection have been unveiled just days after the Glasgow art gallery and museum closed its doors to enable work to begin on the £66 million refurbishment. Designed by John McAslan and Partners and Event Communications, the blueprints reveal plans to modernise and improve the visitor experience while retaining the architectural integrity of the Category A listed building. Under the plans, a new roof and high performance glazing will make the museum more energy-efficient. Two new floors of exhibition space will be created so that 90 per cent of the collection can be viewed by the public. The collection includes rare examples of medieval stained glass, tapestries and sculptures, ancient Chinese ceramics, bronzes and jades, Islamic pile carpets and French paintings. As well as providing increased access to the collection, including to the lower ground floor stores, improved facilities will include a cafe with access from the park at ground level, enhanced retail opportunities, and landscaped terraces linking the museum to its parkland setting. Hannah Lawson, a director at John McAslan and Partners, said: “The Burrell provides an inspiring setting for shipping magnate Sir William Burrell’s vast collection of art and antiquities within a category A listed building of international significance. “John McAslan and Partners are delighted to be leading a team dedicated to the comprehensive repair and refurbishment of this architectural masterpiece. “By providing a new circulation core we can open up new parts of the gallery to visitors and greatly increase the display area for the collections.” Sir Angus Grossart, chairman of Burrell Renaissance, which is overseeing the redevelopment, said: “The designs will see the museum undergo the most comprehensive modernisation since opening to international acclaim in 1983. “The proposals will deliver the high quality and innovative solutions for this exciting project. “We expect to be able to show previously unseen works from this rich collection, and strengthen the reach of this extraordinary world-class museum.” Glasgow City Council deputy leader, Archie Graham, said: “Sir William Burrell’s legacy has been described as the greatest gift a city has ever received and we have a moral duty to ensure it is housed in the finest of buildings. “Having seen the early design concepts, I’ve no doubt we will create an outstanding museum space, which reveals the incredible beauty, quality and depth of the collection. “The Burrell Collection is a masterpiece and the refurbished and re-displayed museum will be one of Scotland’s finest cultural assets.” The Burrell Collection is scheduled to reopen in 2020. Glasgow City Council has agreed to fund up to 50 per cent of the overall project cost with the UK government awarding an additional £5m.
