Where the contractor has become insolvent, what obligations can an employer enforce when stepping-in to a previously novated professional consultant’s appointment in a design and build scenario?
This summer’s landmark Supreme Court decision in Michael J Lonsdale (Electrical) Ltd v Bresco Electrical Services Ltd (in Liquidation) [2020] UKSC 25 (“Bresco”) would have doubtless been interesting news for Insolvency Practitioners (“IPs”) engaged in the construction sector.
Recent insolvency law reforms in the UK, Singapore and Australia impact upon the ability of a party to a construction contract to terminate it due to the other party's insolvency.
Background
John Doyle Construction Limited (in liquidation) v Erith Contractors Limited sees the first consideration of a claim for summary enforcement of an adjudication decision by a company in liquidation following the Supreme Court’s decision in Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited.
The government has extended the restriction on the enforcement of statutory demands until 31 December 2020. The extension from the initial period of 30 September 2020 was introduced by regulations amending the Corporate Insolvency and Governance Act 2020 and will be of application to those in the construction industry.
In its most recent decision, Chandos Construction Ltd v Deloitte Restructuring Inc.[1], the Supreme Court of Canada (the “SCC”) reaffirmed the existence of the common law anti-deprivation rule in Canada.
Helix Legal Senior Associate, Sarah Shirley, shares fresh insight from her experiences in the UK. In this article, she looks at insolvency in the construction industry and the role of adjudication.
Globally, insolvency is one of the biggest issues facing construction companies and projects. The Covid-led recession will only add to the pressure already felt by the construction industry.
Perseverance, dear my lord Keeps honour bright: to have done, is to hang Quite out of fashion, like a rusty mail In monumental mockery William Shakespeare, Troilus and Cressida
Styles & Wood (In Administration) v GE CIF Trustees (unreported) (County Court at Central London)
In the wake of the Supreme Court's ruling that an insolvent company can adjudicate, the TCC have confirmed that there remain high hurdles to the insolvent party enforcing any adjudication decision.
Adjudication by insolvent parties is an issue that has greatly occupied the Courts of late. Much consideration has been given to the arguable conflict between set-off under the Insolvency Rules 2016 on the one hand, and the adjudication process on the other.