Muckle acts for BioConstruct in construction dispute

We acted for BioConstruct Ltd in High Court proceedings concerning the interpretation of payment milestones in a construction subcontract.

The case, BioConstruct Ltd v Greys Thurrock Properties Ltd, relates to rural construction works in Kentand concerned the interpretation of contractual payment provisions and milestone triggers.

Muckle’s team, led by head of dispute resolution Susan Howe, alongside associate Gillian Scribbins and trainee solicitor Pippa Garden, acted for BioConstruct. Gaynor Chambers of Keating Chambers was instructed as counsel.

The dispute

The dispute arose from the construction of an anaerobic digestion plant. Grays Thurrock Properties Ltd (“GTP”) engaged BioConstruct under a subcontract to carry out the works, with payment of the contract sum structured around  defined milestones.

BioConstruct brought a claim after GTP failed to pay sums said to be due in respect of Milestone 14 and related payment stages. GTP applied to strike out the claim or obtain summary judgment, arguing that the relevant milestones had not beentriggered and that BioConstruct’s case had no real prospect of success. 

The arguments advanced by the Defendant for strike out or summary judgment primarily contended the dates and frequencies of testing of the biogas that was being produced by the plant once it was operational. The Defendant also raised arguments concerning the type of feedstock being used in the anaerobic plant at that testing stage and the delivery of O&M documentation in compliance with the subcontract, as well as a secondary procedural argument concerning the Claimant’s court papers. 

The Court rejected the Defenant’s application  and declined to strike out the Claimant’s pleading or summarily decide the case. 

Jonathan Acton Davis KC, sitting as Deputy Judge of the High Court, said that “it is plain”  that applications for strike out should be for claims which are ‘unreasonably vague, incoherent, vexatious or obviously ill-founded (or) which do not amount to a legally recognisable claim or defence’ as is set out in the Civil Procedure Rules guidance notes. On that basis he did not entertain the application for strike out. After considering the Claimant’s response in the application, the judgment found that: “the Court has no difficulty in discerning the nature of the claim. No defect in the pleading in the Statement of Claim can be identified, and none was suggested by GTP”

Regarding summary judgment of the issues raised, he said that: “The Court ought not to conduct a mini trial at this stage.” He found that the defendant’s arguments around feedstock and testing “give rise to issues of fact as is apparent from the witness statements and skeleton arguments and are not apt for resolution by this Court” by summary judgement. 

Practical points

The judgment highlights two key takeaways for those involved in construction projects:

1.       Clear drafting matters – payment milestones and defined terms should be precise and unambiguous. Where milestones depend on operational performance or testing, the requirements should be so unambiguously clear as to avoid any possible later dispute. 

2.       Neither strike out nor summary judgment is easily obtained. Where there is a genuine dispute over contractual interpretation or underlying facts, the courts are likely to allow the case to proceed to trial. 

Commenting on the case, Susan Howe said: “Clear and carefully drafted payment provisions are essential in construction contracts. This decision shows how easily any slight ambiguity, or conflict across contract documents and schedules, can lead to dispute, and reinforces that the Court will be slow to shut out a claim where there is a real issue to be tried.”

The judgment stands as a useful authority for construction professionals and legal advisers alike, particularly in relation to attempts to strike out and the risks associated with complex contractual frameworks.

Our award-winning and leading dispute resolution lawyers are available to support with any disputes you may have. Please get in touch with Susan Howe on 0191 211 7920 or [email protected].