Praemonitus praemunitus (forewarned is forearmed) has always been a good motto, and I am pleased see that Richard Winward uses it to suggest that my new book is valuable for paymasters as well as contractors.
I have long thought that the Australian Construction Law Newsletter is rather a good publication. and I am even more favourably disposed to it since they have just published a favourable review of my book Extra-Contractual Recoveries by Phillip Greenham, until a few years ago the senior construction, engineering and infrastructure partner at Minter Ellison, Melbourne, and now arbitrator.
The review says that I have “vast knowledge and interests” and that the book is “informative, authoritative and comprehensive”. That is very flattering, of course, especially coming from someone with such formidable seniority and experience. More practically, it says
Any advisor looking to assist a contractor who has its back against the wall because of provisions in a contract will be greatly assisted by the book.
A link for the purposes of registering for the SCL Irish Conference – An overview of road, airport, marine & wind-farm construction disputes in Dublin in November has been posted by Arran Dowling-Hussey on LinkedIn:
I was expecting to be in the Supreme Court of Victoria on Friday (virtually) but that was been adjourned by consent. Tomorrow I will be in Auckland in New Zealand (virtually) talking at Brightstar’s conference Building and Construction Regulation and Law about (surprise surprise) Extra-Contractual Recoveries. Meanwhile, I have accepted an invitation from the indefatigable Arran Dowling-Hussey to give the keynote speech at the Society of Construction Law Ireland conference in November in Dublin (virtually), which sounds fun, and which might be even more fun if I’m able to get there in person.
It is hard not to have mixed feelings about this brave new world of virtual appearances. I used to spend a lot of time on aeroplanes, and to some extent of course it was wasteful to the point of absurdity (more than once, I have been asked to fly a thousand miles for a directions hearing). But there is something about being there in person which is missing from the virtual thing.
My chambers introduced a new inter policy – we all have to install Microsoft InTune. It seems to be something akin to an internet equivalent of those electronic tags they put on criminals. I hate it. Longer and more tedious PIN & password requirements. It slowed my Surface to a snail’s pace.
Anyway, no chambers email for the last hour.
To contact me until this gets sorted , please copy emails to me to firstname.lastname@example.org.
As bespoke contracts have become lengthier, and more heavily laden with Queen of Hearts clauses and “I Delay, You Pay” arrangements, it has increasingly been the case that the contractual entitlement of contractors and subcontractors to commercially reasonable payment for their work is shut out by express contractual provision. They may read the contract once, twice, or 20 times, and find no express contractual route to payment. In those circumstances, it is necessary to turn to extra-contractual routes to recovery; that is to say routes to recovery that are not to be found in the express words of the contract.
These routes have become all the more important. They are not much taught in law schools, and are frequently overlooked by claimants to whom they may be available. As such, they can represent hidden opportunities for claimants. They can also constitute hidden risks for employing parties – both owners and contractors who engage subcontractors – that may not become apparent until a legal case against them has been advanced in legal proceedings.
Understandably, a good deal of what is said and written about construction law centres on construction contracts. This paper focuses on one aspect of construction law: what rights are available to a party which executes construction or engineering work to get paid? And understandably, people typically start looking at the express wording of the contract. And those who are to pay for the work typically assume that their liability to pay is limited to what the contract says.
There are two particular problems with this approach. Firstly, there are numerous alternative routes to payment for work other than the express wording of the contract. This paper is intended to illuminate the overall landscape of extra-contractual recovery by looking at a dozen particular paths. Some of them are very well established. Others are more speculative.
The author has not made a precise count, but guesses that in about half of the recoveries in which he has been involved as a lawyer have involved some element of extra-contractual recovery, often pleaded in the alternative to the contractual right.
As one looks at these alternative routes, one sees a second problem. Very often, parties do not do what they have contracted to do. Conceptually, this is easily understood where the contractor does not build what he has contracted to build, and thus becomes liable for the cost of rectification, either under the contract or by way of damages. More complex is what happens when the owner, and/or the owner’ s agents, do not do what they are required to do by the contract. A number of the alternative routes to payment are concerned with the legal consequences of such failures.
Clearly, these alternative routes to payment represent opportunities for contractors and risks for owners. They are not as well recognised as they might be, and it is in that sense that they might be characterised as hidden. For the parties who have undertaken work for which they have not been paid, notwithstanding their legitimate commercial expectation, the takeaway from this paper will be that it is worthwhile going through these alternative routes in order to see whether any of them are available. If you are advising an owner, the takeaway is not to be too myopic about the contract: the risks might well lie elsewhere.
The decision is a lengthy one, at 1451 paragraphs over 458 pages, covering a number of matters including prevention. The prevention point here was that the owner had prevented the contractor from putting in claims based (as required by the contract) on the Approved Contractor’s Program, by not approving the contractor’s programs. that is a relatively unusual application of the prevention principle, but not entirely unknown; it is referred to at page 217 of my book on Extra-Contractual Recoveries for Construction & Engineering Work.
The decision claim about six weeks after the High Court refused special leave in Key Infrastructure Australia Pty Ltd & Ors v Bensons Property Group Pty Ltd  HCATrans 185 (5 November 2021), where the issue sought to be appealed was the nature of the prevention principle, but Justice Digby did not refer either to that special leave application, nor to the Court of Appeal’s decision in that case. In that case, the Court of Appeal of Victoria found that the prevention principle is only enlivened where the prevention is a breach of contract, and further that it is merely a matter of implied term rather than rule of law. As I have explained elsewhere, the latter is probably a heresy (although not an entirely novel heresy) but the former clearly runs counter to considerable authority, and that authority was not referred to by the Court of Appeal. As such, it seems the decision was per incuriam. Further, the Court of Appeal found as a fact that there had been no prevention, and so in any event the observations of the Court of Appeal about the prevention principle were also obiter dicta. It appears that it was essentially on that basis that the High Court declined to give special leave to appeal – it not being a suitable vehicle to resolve the point.
We are down to the last few days now of the pre-order discount period for Extra-Contractual Recoveries, and I am pleased to say that people have been buying the book, notwithstanding that none of the construction law publications have yet reviewed it, and we are still waiting for completion of the printing process.
I am grateful for the suggestion of Julian Bailey of White & Case for his suggestion of London Publishing Partnership as the publishers for my book. He switched to them for his third edition of his 3 volume work Construction Law, in part because it enabled a massive reduction in the price of the book (which I thoroughly recommend, by the way; it really is the lawyers’ law book on construction law: whilst it does not have the history of Keating or Hudson, it is considerably more detailed at some 2,300 pages. And so while construction lawyers might sensibly start with Keating or Hudson for a summary of the law on any particular construction law topic, it is then wise to look to Bailey for the more nuanced wrinkles).