ECR Review by Michael Christie SC

Michael Christie is rightly regarded as the leading construction silk in Australia these days, and so I was especially gratified to see his kind review of my book in Building and Construction Law:


Book Review


Extra-Contractual Recoveries for Construction & Engineering Work, by Robert Fenwick Elliott, London Publishing Partnership, 2022, xci + 1O77pp, 2 Volumes: ISBN: 978-1-913019-57-0. Hardcover.

Reviewed by Michael Christie SC

The learned author of this two volume book is an eminent construction lawyer. During his long and distinguished career in the United Kingdom and Australia, he has acquired a deep understanding of construction disputes. In this book, he shares his invaluable insights with readers.

The book is concerned with a topic of enormous practical importance: the recovery of money outside the strict limits of a construction contract.

Such recovery has long been recognised at common law and in equity. Indeed the first construction dispute determined by the High Court of Australia concerned a claim for extra-contractual recovery: Liebe v Molloy (1906) 4 CLR 347. Extra-Contractual Recoveries for Construction & Engineering Work is the first book to deal specifically with this important subject.

The theme of the book is encapsulated in the opening paragraph, where the learned author states:

For good reason, most texts, and indeed most decided cases, on the subject of recovery of payment for construction or engineering work focus on the contractual arrangements between the parties. But there are a number of circumstances in which the common law or equity will facilitate a recovery by a contractor on a different basis, because there is no contract between the parties, or because a piece of contractual machinery that was intended to regulate payment has broken down, or because of some other factor. In other circumstances, legislatures have taken the view that particular contractual regimes are potentially one-sided, or have been so abused, that it has been necessary to introduce statutory interventions, so as to allow contractors to recover payment for their work in the face of contractual restrictions. This book is intended by way of survey of these extra-contractual routes. They include not only claims in tort, quantum meruit and misrepresentation, but also claims based upon aspects of contractual law, such as prevention, repudiation, and breach of implied terms. The common feature of all of these avenues is that the basis of the claim, or the ways in which a seemingly fatal obstacle to be found in the express terms of the contract might be circumvented, is not to be found within the four comers of the express terms of the contract. The key to unlocking payment lies somewhere else.

The author states that “[tjhis book is primarily intended to engage the interest of contractors and subcontractors who have undertaken construction or engineering work, and who are having difficulty in getting paid for it” (p 11).

Following an introductory chapter, the book deals with Implied Terms (Chapter 2); Intermediate Agreements, Certifications, Etc (Chapter 3); Circumvention of Contractual Provisions (Chapter 4); Damages for Breach of Contract (Chapter 5); Misrepresentation (Chapter 6); Quantum Meruit (Chapter 7); Negligence and Other Torts (Chapter 8); Repudiation, Frustration ad Other Doctrines (Chapter 9); Statutory Recoveries (Chapter 10); Bills of Exchange, Bonds, Liens, Charges, Etc (Chapter 11); Contracting Out of Extra-Contractual Liability (Chapter 12); Adjudication and Other Recovery Techniques (Chapter 13); Procurement and Management (Chapter 14).

Volume II contains extracts from leading cases and from statutes.

The practical importance of the subject matter of the book is correctly noted (p 2):

The topic is of rather more importance than the lack of previous academic attention to it would suggest. Although it is hard to come by reliable statistics, it is probably the case that a sizeable proportion of results in large construction law disputes is influenced to a greater or lesser degree by extra-contractual claims. Sometimes, the courts have delivered judgments in which extra-contractual claims have been allowed, but more often cases are settled in circumstances where the defendant has reason to fear an extra-contractual claim may succeed.

One very helpful feature of the book is the use of “checklists”. For example, in Chapter 1 (pp 18-20) there is a thorough list of matters for consideration by contractors in considering whether extra-contractual recovery is available to them. These matters should be of great interest to owners too: as the author observes (p 2), “[n]ot infrequently, extra-contractual claims come as a particularly unwelcome surprise to owners.” Another example of the use of a “checklist” is in Chapter 3, which contains a checklist of “possible routes to recovery without a certificate” (p 70).

An outstanding feature of the book is in the application of legal insights to problems that can arise in practice in various common law jurisdictions. Chapter 4, headed “Circumvention of Contractual Provisions”, is good example of that. It is the longest chapter in the book. It contains a section on “Control of Unfair or Unconscionable Contract Terms”, which focuses on penalties, and the “different international approaches in common law and equity” throughout England, Australia, Singapore, New- Zealand, India and Malaysia. There is also a discussion of statutory controls in the United Kingdom, Australia and India. There is then sections on “Circumvention of Conditions Precedent to all Payment Rights” (p 83) and “Attempts to Exclude Implied Terms – ‘Entire Agreement’ Clauses” (p 85). There is a detailed section (p 86) on “Pay-When-Paid Clauses”, the subject of the recent decision of the High Court of Australia is Maxcon Constructions Pty Ltd v Vadasz (2018) 264 CLR 46; [2018] HCA 5. Next, there is a section on “Circumvention of Cross Claims” (p 91), in which he reviews difficult issues that arise in relation to “prevention”. The learned author states (p 97):

It is not uncommon for a contractor, faced with a cross claim for liquidated damages, to argue that he has been prevented from completing because of some default by the owner, such that time is at large. The proposition – to some surprising, but long-established in law – is that a relevant act of prevention has the effect of setting time at large, such that the owner is denied the benefit of her contractual completion date, and liquidated damages. The contractual regime is, so to speak, shattered and not merely adjusted, and in place of the contractor’s obligation to complete by the contractual completion date, there is substituted a mere obligation to complete within a reasonable time.

The section in Chapter 4 on “Circumvention of Notice Provisions” is of great practical use. The learned author refers to standard notice provisions and what he calls “Queen of Hearts clauses”. He states (p 115): “The term ‘Queen of Hearts clause’ thus aptly describes those notice provisions that are designed to make it practically impossible for the contractor to give a compliant notice. The purpose of these provisions is thus to prevent the contractor’s claim from getting a fair hearing.”

After describing various features of such clauses, the learned author has a section headed “The arsenal of circumventions”, and states (p 116):

In these circumstances, it is unsurprising that courts have been prepared to draw from a fairly wide arsenal of arguments in order to relieve a contractor from the harsh consequences of failing to give a required notice, and the following approaches have in the past been taken.

He then lists, by reference to authority, those numerous approaches. The author deals with the requirements of a condition precedent. He reviews various forms of estoppel and waiver, and considers examples of these by reference to leading cases.

There is a very useful section (p 147) headed “Certification and Peninsula Balmain v Abigroup”. He correctly states: “Whether a certifier is entitled – or even obliged – to certify extensions of time and/or money in the absence of a notice required by the contract depends on the wording of the contract.” The author then reviews examples of the manner in which a range of notice clauses have been considered in several jurisdictions (pp 148-154). There is then a section on “Breakdown of Contractual Machinery”. Like many other parts of this book, on that topic the author collects the authorities and provides insights in an original and very useful manner. Finally, there a section on unconscionability and relief from forfeiture, including the prohibition of unconscionable conduct by the ss 20 and 21 Australian Consumer Law.

Other chapters in the book are just as helpful as Chapter 4. For example, Chapter 12, on “Contracting out of Extra-Contractual Liability” deals with issues of great practical importance seldom considered in the literature. They include “risk allocation, particular exclusions of common law principles, and contracting out of liability for misrepresentation”.

Another useful feature of the book is that it deals with issues that arise at all stages of a project, as well as post-termination issues. The book goes further, by providing guidance to parties at the pre-contract stage. The author provides “observations about how … parties might improve their position at tender stage” (p 381). He provides tender strategies for owners and contractors in Chapter 14 (“Procurement and Management”). Lawyers who advise on drafting construction contracts would derive great benefit from reading this chapter.

The foreword to this book is written by Professor Doug Jones, an eminent international arbitrator and Judge of the Singapore International Commercial Court. He observes that until the publication of this book there had been no “comprehensive reference text examining this particular area of construction law in the Australian and English contexts”. Professor Jones states:

This publication admirably fills that vacancy by offering an encyclopaedic analysis of the available paths to recovery outside the four comers of the contract. The book is simultaneously broad and focussed on its ambit – broad in its wide-ranging review of topics, yet all supporting the central thesis that, ultimately, commercial fairness should be achieved between contracting parties.

He continues:

It is undoubtable that this text, the magnum opus of an already impressive oeuvre, will make a formidable contribution to the domain of construction law and provide great value to counsel, arbitrators, judges and construction industry participants at all levels of the industry.

This high praise is richly deserved. Extra-Contractual Recoveries for Construction & Engineering Work is an excellent book. It is an original contribution to construction law literature. The book is clearly written, and is a pleasure to read. All construction lawyers, both those involved in disputes as well as those involved in drafting contracts, would benefit from reading this book.



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