Travis Perkins Commerical Focus: Spring 2024

Case Law

• Aston Martin MENA Ltd v Aston Martin Lagonda Ltd [2023] EWHC 3285 (Comm)
• 1 Leadenhall Group London v Persons Unknown [2024] 2 WLUK 529

News

• Website Auditing Tool
• Cookie Compliance
• Chancery Lane Project issues best practice guides
• Home Secretary announces new strategy to tackle organised crime
• Competence Framework for Project Managers to meet BSA obligations

Case Law

Aston Martin MENA Ltd v Aston Martin Lagonda Ltd [2023] EWHC 3285 (Comm)

In the context of an agency agreement, the High Court provided clear and comprehensive guidance on:

1. the interpretation of conflicting constructions of commercial contracts; and
2. the scope and content of implied and express terms of good faith.

Issues

Aston Martin Lagonda Ltd (Defendant) is a manufacturer of luxury cars under the Aston Martin brand name. As per an agency agreement dated 19 April 2018 (Agency Agreement), Aston Martin MENA Ltd (Claimant) was the Defendant’s exclusive distributor in the Middle East and North Africa region.

On 25 January 2021, the Claimant alleged that the Defendant breached its payment obligations under the Agency Agreement and demanded a Manager Committed Minimum Profit of £6,050,176.40 (Payment).

As the Payment had not been paid, on 19 April 2021, the Claimant terminated the Agency Agreement with immediate effect. The Defendant denied being in breach of any of its payment obligations.

The issues for the Court to decide were: 

1. whether the Defendant owed the Claimant the Payment for the period from 1 January 2021 – 30 September 2021, or alternatively damages for breach of contract; and
2. whether the Defendant acted in breach of the express duties of good faith, or alternatively an implied duty of good faith.

Decision

Issue 1

The parties disputed whether the Payment was owed to the Claimant for the period from 1 January 2021 – 30 September 2021, and differed in their approach as to the proper construction of the express terms of the Agency Agreement. It was an express term of the Agency Agreement that the calculation of the Payment relied on the parties agreeing a business plan each year. However, a business plan was not agreed for 2021. Therefore, the Claimant argued that a term should be implied such that the figures for 2020 should be used to calculate the Payment for 2021.

On the question of implied terms, the Court drew upon the leading authority of Marks and Spencer plc v BNP Paribas [2015] UKSC 72. In this case, the Supreme Court held that a term would only be implied in a commercial contract, under the principle of business efficacy, if without the term, the contract would lack commercial or practical coherence.

In this instance, the High Court regarded the Claimant’s proposed implied term as not necessary, obvious or reasonable for business efficacy. The parties had an obligation to agree a business plan each year. Therefore, it was not reasonable that the parties would have agreed to the Claimant’s suggested implied term.

Issue 2

The Claimant alleged that the Defendant was in breach of an express or implied duty of good faith during the period after termination (Transition Period). The Court assessed the Agency Agreement’s express terms with respect to termination. The Court found that the express duties of good faith did not apply during the Transition Period.

As for an implied duty of good faith, the Court concluded that “a term should not be implied merely because it appears fair or that the parties would have agreed to said term had it been suggested to them”. Because of the above reasons, an implied duty of good faith was not found.

For further information, please see the full judgment here. 

Comment: This case is a useful reminder of the principles which the court considers when interpreting commercial contracts. To resolve any ambiguity or contradiction, the court will review each clause in the context of the whole contract to understand the common intention of the parties. 
In respect of implied terms under the principles of business efficacy or good faith, the parties should be aware of the test set out in Marks and Spencer plc v BNP Paribas. In the light of this case, the court is unlikely to imply a term into a professionally drafted commercial contract unless it is necessary and obvious for the contract to have commercial or practical coherence.

For further details, please contact Louise Wilson and Josh Middleton.

1 Leadenhall Group London v Persons Unknown [2024] 2 WLUK 529

The Court granted a 13-month extension to a newcomer injunction against Persons Unknown in favour of the claimant, 1 Leadenhall Group London (Claimant), which prohibited Persons Unknown from entering, or remaining, on the Claimant’s construction site without their permission.

Issues

The Claimant owns a new commercial 35-storey skyscraper being built in London. During the construction of the building, the Claimant applied for, and obtained, a two-year injunction to prohibit Persons Unknown from trespassing on the construction site to carry out dangerous stunts. Such stunts caused delays to the completion of the skyscraper and financial losses for the Claimant.

The construction of the skyscraper had been delayed and, as a result, the initial two-year injunction was expiring. The Claimant applied for an extension to the injunction and for the application to be treated as seeking a ‘newcomer injunction’, which aimed to prohibit newcomers (who were not parties to the proceedings) from trespassing on private land.

Comment: This is another interesting case in the development of injunctions against Persons Unknown, signalling that the court is prepared to grant lengthy extensions – in this case, of 13 months – to existing injunctions.

For further details, please contact Louise Wilson and Josh Middleton. 

News

Website Auditing Tool

The European Data Protection Board (EDPB) has launched a new website auditing tool for controllers, processors and regulators to use to audit website data privacy compliance. This includes, for example, reviewing their use of cookies (a current area of focus for the ICO in the UK).

Whilst it has a European focus and is not a substitute for taking specialist advice on the topic, the tool appears to present a useful first step in reviewing such compliance.

We note that the EDPB's announcement states that a second version with new features is planned for later this year.

Comment: It remains to be seen how effectively this new tool will be used in practice. However, this is one of a number of signs of a more automated and tech-driven approach to regulatory oversight. As this becomes more sophisticated, issues which were historically viewed as low-risk due to limitations on the relevant regulator’s resources may need to be given greater attention

For further details, please contact David Lane.

Cookie Compliance

The ICO has reiterated its warnings regarding its ongoing campaign on cookie compliance.  

The message is clear:

“We expect all websites using advertising cookies or similar technologies to give people a fair choice over whether they consent to the use of such technologies. Where organisations continue to ignore the law, they can expect to face the consequences. We will not stop with the top 100 websites. We are already preparing to write to the next 100 – and the 100 after that.”

Comment: Coupled with warnings regarding automated monitoring of compliance, it has never been more important to ensure that your website’s cookie compliance procedures are up to date. 

For further details, please contact David Lane.

Chancery Lane Project issues Best Practice Guides

In its own words, the Chancery Lane Project (CLP) is “the largest global network of lawyers and business leaders using the power of climate contracting to deliver fast and fair decarbonisation. [They] have written 100+ climate clauses, 70+ glossary terms and a suite of tools to help you to decarbonise your contracts”.

The CLP has now published a set of Best Practice Guides to help draw together these existing clauses, terms and tools and further help to make climate contracting easier for all involved.

Comment: Whilst the CLP’s precedent clauses have been a useful tool for some time now, these new best practice guides give greater context to how they can be used day-to-day

For further details, please contact David Lane.

Home Secretary announces new strategy to tackle organised crime

The new strategy sets out action to eradicate complex criminal networks and will implement new powers in the Criminal Justice Bill to equip police with the ability to disrupt serious crime and allow them to prohibit articles including pill presses.

The strategy will also seek to reduce incidences of modern slavery and human trafficking, with £24 million being allocated to the Modern Slavery Fund.  

The funding will also support the Modern Slavery Innovation Fund which is building evidence to provide an understanding of what measures work to reduce vulnerability and exploitation in UK supply chains.

For further information, please see the full article here.

Comment: The Government has promised a substantive review of the Modern Slavery Act for several years now. Whilst that now seems very unlikely this side of a General Election, this is a useful reminder of the existing Act and the ongoing risk of Modern Slavery in any supply chain, domestic or international.

For further details, please contact David Lane.

Competence Framework for Project Managers  to meet BSA obligations

A new Competence Framework for Project Managers (Framework) has been published to establish core competence criteria for Project Managers. It applies to all individuals who have overall responsibility for planning, monitoring and controlling the delivery of a built environment project, ensuring the time, cost, quality and specifications of the project are met.

The Framework sets out two competence thresholds:

1. those working on complex projects, for example, projects which are high risk, uncertain, involve interdependent stakeholders and a fast pace of change; and
2. those working on a Higher Risk Building (HRB), which is a building that is:
   1. at least 18m in height or has at least 7 storeys and contain at least two residential units; or
   2. a care home or hospital.

Up until September 2025, competence is demonstrated to the regulator by achieving chartered status with:

• CIOB; or
• Association for Project Management (APM); or
• Royal Institution of Chartered Surveyors (RICS); or
• Achieving certification against the new competence framework (from September 2025 until September 2027); and
• Demonstrating relevant experience in the built environment. 

Crucially, the Framework sets out that Project Managers are responsible for advising their clients during the appointment of a Principal Designer and/or Principal Contractor. Project Managers must also work with them for the overall benefit of the project and understand their roles and legal obligations, as well ensuring the client accepts their legal responsibilities before commencing work.

This may be applicable where an external Project Manager is being sourced for a role or where an internal person is managing a project. The core competencies could act as a framework for ideal project management and as a tool in sourcing the correct Project Manager for a development.

Comment: It is a common misconception that the Building Safety Act 2022 relates only to residential buildings or only to high-rise buildings, whereas in fact it relates to the vast majority of construction projects, including most if not all of the ones TP will be involved in.  Another aspect of the Act which TP may be interested in is the fact that the role of "approved inspector" for Building Regulations purposes is abolished and replaced by "registered building control approvers" and "registered building inspectors" from 6 April 2024, and there are real fears in the industry that the complex process for registering and qualifying for one of the new roles is going to result in a shortage of properly qualified and registered people to perform these roles, thus causing delays to projects.

For further details, please contact Chris Holwell.