Get Your Notices In!

Below is an early Christmas gift in the form of some practical advice for construction professionals in the UK in light of Adam Architecture Ltd v Halsbury Homes Ltd [2017] EWCA Civ 1735.

The case involved Adam Architecture Ltd ("Adam"), an architectural practice, and Halsbury Homes Ltd ("Halsbury"), a property developer. In 2015 Halsbury was proposing to construct 200 homes in Loddon, Norfolk. Halsbury wanted Adam to complete the design work. Adam duly submitted its fee proposal and stated that its appointment would be subject to the RIBA Conditions. Halsbury accepted Adam's proposal.

Here's where things went awry. Halsbury later sent an email to Adam stating that it was going to use another architect on the project as well. The problem for Adam was that Halsbury wanted the other architect to design the layout of the whole scheme. That was not what was originally discussed and Adam's fee proposal showed that it would be involved in the design of the whole development. As Adam put it in its email back to Halsbury, "If we have no input in the layout then there is really no place for us in this project". Ten minutes after that, Adam sent an email to Halsbury stating that it had been instructed to stop work (which it did).

Here's where it gets interesting. Adam later emailed Halsbury "Our agreed fee is no longer relevant and, all other matters considered, we need to draw a line under our work to date." Adam also attached its invoice for payment for works carried out up to the date of Halsbury's email. Halsbury failed to serve a pay less notice on Adam or pay Adam's invoice.

As you might have guessed, Adam brought an adjudication against Halsbury for the sums falling due from its invoice. The adjudicator found in Adam's favour essentially because Halsbury failed to issue a pay less notice. Adam then issued proceedings to enforce the adjudicator's decision.

The TCC came to a different conclusion to the adjudicator. It found that Halsbury's email to Adam was a repudiation of the contract and that Adam accepted that repudiation by stopping work and sending the invoice (see more on this below). Therefore the parties were discharged from their primary obligations under the contract. Adam did not agree with the decision so it appealed to the Court of Appeal, mainly on the basis that Halsbury had not issued a pay less notice, so payment became due to Adam and the TCC had erred in its decision on repudiation.

The Court of Appeal was aware of the high...