1. Christopher Linnett Ltd and Another v Matthew J Harding (trading as M J Harding Contractors)
| Jurisdiction | England & Wales |
| Judge | Mr Alexander Nissen |
| Judgment Date | 25 July 2017 |
| Neutral Citation | [2017] EWHC 1781 (TCC) |
| Docket Number | Case No: HT-2016-00353 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 25 July 2017 |
[2017] EWHC 1781 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Alexander Nissen QC
(sitting as a Deputy High Court Judge)
Case No: HT-2016-00353
Mr Omar Eljadi (instructed by Simmons & Simmons LLP) for the Claimants
Mr Nigel Davies (director of Davies and Davies Associates Ltd) for the Defendant
Hearing date: 27 th June 2017
Judgment Approved
Mr Alexander Nissen QC:
Although the claim in this action is for a very small sum, it was transferred by Fraser J from the small claims court at Kingston County Court to the Technology and Construction Court because of the nature of the issues to which it gives rise.
The First Claimant is a limited company of which Mr Linnett is a director and sole shareholder. Within the construction industry, Mr Linnett is a well known professional who provides services which include acting as an adjudicator. In the circumstances described below, Mr Linnett became the Second Claimant but, for convenience, I shall continue to refer to him as Mr Linnett.
The Defendant is a building contractor acting as a sole trader.
There have, in the past, been a series of adjudications between the Defendant and his employers under a building contract, namely Gary Paice and Kim Springall ("the employers"). The most recent round of litigation between the parties to the building contract was a claim by the employers against the Defendant to enforce an adjudication decision reached by Mr Linnett on 27 April 2016 in which he ordered the Defendant to pay a little under £300,000 to the employers. He also directed that the parties should be responsible for his fees in equal shares of £9,768.00 plus VAT. The Defendant had contended that the decision was unenforceable both because it was reached too late and on the grounds of apparent bias. In August 2016, Ms Finola O'Farrell QC, then acting as a Deputy High Court Judge, rejected these contentions and enforced the decision: see Paice and Another v Matthew J Harding [2016] EWHC 2495 and BLR 582. She ordered the Defendant to pay to the employers that part of the adjudicator's fees as he had been ordered to pay namely £11,721.60 (being £9,768 plus VAT).
Following that decision, payment was made of the adjudicator's fees in the following way. The Defendant made payment of his half share to the employers on 19 August 2016 and, in turn, the employers paid both shares to the First Claimant on 26 August 2016.
By this action, the First Claimant, alternatively in the circumstances set out below, the Second Claimant, seeks payment of statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 which accrued during the period of delay in settling the payment of the fees, statutory compensation and debt recovery costs.
The trial of the claim in the action took the form of a one-day hearing at which both parties gave evidence and were subject to cross examination. There was a one lever arch trial bundle and a separate file of 28 authorities. Although the value of the claim was low, having regard to the complexity of the issues to which it gave rise I should particularly record my gratitude for the quality of the submissions which were made.
The Issues
It was agreed that the following issues arise for consideration:
(1) Was the Defendant party to an adjudicator's agreement?
(2) If so, with which party was that adjudicator's agreement concluded?
(3) What are the terms of any such adjudicator's agreement?
(4) Did the Defendant have, and exercise, a right to cancel any such adjudicator's agreement?
(5) To what sum, if any, is either Claimant entitled in respect of interest?
(6) To what sum, if any, is either Claimant entitled by way of statutory compensation?
(7) To what sum, if any, is either Claimant entitled by way of debt recovery costs?
(8) What is the correct treatment of VAT?
The Application to Amend
As is clear from Issue (2), a principal defence pleaded and maintained by the Defendant is that any contract into which he entered was not one made with the First Claimant, a limited company, but was with Mr Linnett personally.
It was not until closing submissions that an oral application was made to amend the brief Particulars of Claim within the Claim Form to add Mr Linnett as a Second Claimant to meet the possibility that the Court might uphold the principal defence. Mr Eljadi of counsel, who made the application, pointed out that the issues arising as a result of the amendment were exactly the same as those which had already been canvassed. He also observed that there would be wasted costs if the consequence was that Mr Linnett would have to start fresh proceedings forcing the parties to re-argue all the remaining points in a separate action.
The application was opposed. Mr Davies, solicitor for the Defendant, frankly conceded that, with one exception, he could not identify any particular respect in which the proceedings would have taken a different course had a change to add Mr Linnett's name been made much earlier. Mr Davies was given the opportunity to take more time to reflect on the application in order to address that question but he said he did not believe that his concession described above would change. The exception he did identify was that the Defendant would have wished to make a counterclaim against Mr Linnett for a return of fees based on his argument regarding the application of the Consumer Contracts Regulations, which is the subject of Issue (4).
At the trial I indicated that I would reach my procedural decision on the amendment application at the outset of my deliberations but, for convenience, would provide my reasons as part of this reserved judgment. In terms of case management, I directed that an amended Claim Form should be lodged with the Court by a given date to reflect the application which had been made orally. Subsequently, the Defendant provided written submissions by email dated 30 June 2017 in which the Defendant took the opportunity to make a number of further points in opposition to the amendment, some of which were technical, but including reference to case law and an article. I had not made provision for such written submissions and it would not therefore be fair for me to take them into account now not least because the Claimants have not had the opportunity to respond to them. The application to amend must itself be dealt with in a proportionate way and the oral hearing was the occasion on which to make submissions. That said, one point to which the Defendant objected in writing was the breadth of the proposed draft amendment which was lodged. I deal with that question separately.
I am conscious that this is a very late amendment. Indeed, it could scarcely have been later. Moreover, no explanation was given for its lateness. That is because the only explanation that could realistically have been given was a belated recognition during the course of the trial that the First Claimant's primary case was less than certain to succeed. That is obviously an unacceptable reason. Set against that is the feature that the application came so late that the trial process itself was not disrupted. If a contract was concluded, it was the Defendant's own case that it was with Mr Linnett. I must also have regard to the overriding objective and proportionality. This is a very small claim indeed. The number of issues that arise in relation to it and the costs that have been incurred are already hugely disproportionate to the sum at stake. The case had been fully argued. It would make no sense at all to have those matters debated again in new proceedings between Mr Linnett and the Defendant. Notwithstanding the obvious lateness of the application and the lack of a satisfactory explanation for it, it seems to me that this is one of those rare cases in which would be appropriate to allow an amendment at a late stage. The compass of the amendment which I am prepared to allow is very short, namely to add Mr Linnett as a Second Claimant. Although a lack of prejudice is no longer the test, it is relevant to record my finding there is no such prejudice in this case. The Defendant can (and did) raise all the same remaining points he has already raised by way of defence against the First Claimant. If I come to the conclusion that Mr Linnett's claim succeeds but there is a tenable counterclaim which either arises from the application of the Consumer Contracts Regulations or which may be made on any other basis, then, subject to further submissions from the parties, I could stay execution of the judgment pending the hearing of that counterclaim.
For those reasons, I grant permission to amend simply to allow Mr Linnett to be joined as a Second Claimant on the Claim Form. For the remainder of this Judgment, I will continue refer to the Second Claimant as Mr Linnett.
I should also add that in the draft amendment filed with the Court it was primarily contended that, if the contract was made with Mr Linnett, it was on terms that, on a proper construction of that contract, payment was to be made to the First Claimant. The alternative case was that the contract was made on terms that payment was to be made to Mr Linnett as the Second Claimant. I do not give permission to make the amendment so far as it reflects the primary contention. Although it was briefly mentioned orally by Mr Eljadi as part of the amendment application, it is a step too far to expect that issue to be substantively determined at this stage. At the stage of trial when this application was made, there was no opportunity for the Defendant to put forward any substantive argument...
To continue reading
Request your trial
-
Price and payment
...contracting parties to apply even if, absent such agreement, it would be of no application: compare Christopher Linnett Ltd v Harding [2017] EWhC 1781 (TCC) at [89]–[113], per DhCJ Nissen QC. See generally Barber, “Late payment of Commercial Debts (Interest) act 1998 – No Laughing Matter” (......
-
Table of cases
...Christopher Brown Ltd v Genossenschaft Oestereichischer [1954] 1 QB 8 III.25.122, III.25.223 Christopher Linnett Ltd v harding [2017] EWhC 1781 (TCC) II.6.379, II.6.384, III.19.23, III.24.34, III.24.37 Christopher Moran holdings v Carden & Godfrey (a irm) (1999) 73 Con LR 28 III.15.19, III.......
-
Statutory adjudication
...Services Ltd v Bell Group UK Ltd (2009) 122 Con LR 66 at 85 [83]–[84], per Coulson J. 223 Compare Christopher Linnett Ltd v Harding [2017] EWHC 1781 (TCC) at [53], per DHCJ Nissen QC, which suggests otherwise. here are now many individuals and businesses whose trade is adjudication: see, eg......
-
Home building contracts
...Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) regulation 6(1)(e). 66 Christopher Linnett Ltd v Harding [2017] EWHC 1781 (TCC) at [72]–[88], per DHCJ Nissen QC. Statutory adjudication is discussed in Chapter 24. 67 SI 2008/1277. 68 Consumer Protection from Unfair Tradi......