Misrepresentation has always been one of the more important ways in which contractors and subcontractors have been able to obtain extra-contractual recoveries in the construction industry. Whether the misrepresentation is relied upon pursuant to one of the statutory bases based on the UK legislation[1], or by way of negligent misstatement, or by way of misleading conduct pursuant to the Australian Consumer Law, the paradigm case has typically been to do with latent ground conditions. The owner induces the contractor to enter into a construction contract by misrepresenting the state of her[2] knowledge about what is underground.
Typically, she will require the contractor to sign a contract acknowledging that he is entering into the contract without reliance upon anything that she has said, but instead upon reliance on his own inspection. Equally typically, those contractual provisions are ineffective to avoid liability.
In Australia, perhaps the most notable of these cases is Abigroup v Sydney Catchment Authority[3], where it was held that the employer was liable for her statement that she had no plans showing underground conditions. In fact, and entirely innocently, there was an old plan undiscovered in her archive.
But this is not the only type of case in which an owner who contracts with the head contractor, or head contractor who contracts with the subcontractor, might be liable for misrepresentation. There is another category of case, which sees the light of day less often, which also potentially sees a representor liable for misrepresentation. It is a case particularly common in the context of subcontracting, and so will be described in those terms. The head contractor knows that the project is already in trouble; it is already the subject of delay and disruption with dark clouds already overhead. That delay and disruption is going to affect most, if not all, of the subcontractors yet to start work. Anxious not to inflate subcontract tender prices, the head contractor conceals what it knows about that delay and disruption. Instead, it puts forward to the subcontractor a programme which represents that the subcontractor will get prompt and uninterrupted access to the work. Sometimes, that programme may well have been achievable at the time it was originally put forward, but by the time the subcontract is entered into, the head contractor knows, or ought to have know, that the programme is no longer achievable.
The scenario gives rise to some questions Continue reading
The submissions are now in before the High Court in the appeal in Mann v Paterson Constructions. It is all about the right of a contractor to elect for a quantum meruit in the event of a repudiation of a building contract by the owner.
It is suggested on the back cover of Contract and the Australian Consumer Law that it is intended to be read from cover to cover, and since I was sitting on an aeroplane for three hours on Saturday, I did just that.
Each jurisdiction has its own system as to how it recognises the most eminent of its barristers. Some jurisdictions, such as England and Wales, Victoria, and Queensland appoint Queen’s Counsel or, when there is a king on the throne, King’s Counsel. The distinction is well recognised by the public by the post-nominal QC (or KC). Traditionally, QCs wear court gowns made out of silk, and hence they are colloquially known as silks.