TCC Considers Melville Dundas v Wimpey

There has been much discussion as to the scope of the decision of the House of Lords in Melville Dundas v Wimpey and how it will come to be applied by lower courts. Guidance has now been given by the decision of the TCC in Pierce Design v Johnston.

There were similarities and differences between Melville Dundas and Pierce Design.

• Both concerned JCT 1998 wording.

• In both cases the employer sought to rely on a contractual right to suspend payment following the determination of the contractor’s employment. The relevant wording of the suspensive clauses under both contracts was the same.

• However, the contractor’s employment in Melville Dundas was determined owing to its insolvency. In contrast, in Pierce Design the basis for termination was contractor default.