Enforcement by Toppan
“ (a) The fact that the construction contract (if it is one) is retrospective in effect is not a bar to it being a construction contract. It is common for contracts to be finalised after the works have started and to be retrospective in effect back to the date of or even before commencement. If that is what the effect of the parties' agreement is, then that cannot prevent it from being a construction contract for the carrying out of construction operations. Put another way, a construction contract does not have to be wholly or even partly prospective. One must be careful about adopting a peculiarly syntactical analysis of what words mean in this statute when it is clear that Parliament intended a wide definition. An agreement "for... the carrying out of construction operations" is a broad expression and one should be able, almost invariably at least, to determine from the contract in question whether it fits within those words, without what could be a straight-jacketed judicial interpretation. ( b) (c) Usually and possibly invariably, where one party to a contract agrees to carry out and complete construction operations, it will be an agreement “for the carrying out of construction operations”. The warranty in that case included the verbs “warrants, acknowledges and undertakes”. The Abbey warranty did not use the verbs “acknowledges and undertakes”. The time the warranty was entered into was also important. Simply entered into the warranty 4 years after practical completion of the original works, 3 years after the settlement agreement and 8 months after the remedial works had been carried out and at a time when no further work was in prospect.
Simply raised three issues:
(1) Whether the Adjudicator had power to award interest;
(2) Whether Toppan was entitled to recover VAT; and
(3) Whether Simply was entitled to a stay of execution on the basis that Toppan would most likely be unable to repay the sums awarded, if required to do so in later proceedings. The court found that the adjudicator was correct to award VAT. As to interest, Simply had not challenged the adjudicator’s jurisdiction and had taken a full part in arguing the issue, therefore the decision was binding, right or wrong. As to stay, the evidence showed Toppan to be in a healthy financial position and there was no reason to think it would not be able to repay the sum awarded if later ordered to do so. As a side issue the court held that it could consider as bona fide an intention to take legal proceedings for a final determination of the issues in the adjudication, even where no steps had yet been taken to pursue that claim. Enforcement by Abbey The real issue here was whether the collateral warranty was a construction contract. The question was one of fact to be answered by reference to what was being warranted. Some guidance was derived from three points of principle laid out in the case of Parkwood Leisure[10] where Akenhead J said:
[10] Parkwood Leisure v LaingO’Rourke [2013] B.L.R. 589
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