Axis M&E UK Ltd v Multiplex Construction Europe Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Roger Ter Haar |
| Judgment Date | 04 February 2019 |
| Neutral Citation | [2019] EWHC 169 (TCC) |
| Docket Number | Case No: HT-2018-000341 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 04 February 2019 |
[2019] EWHC 169 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Roger Ter Haar QC
Case No: HT-2018-000341
Piers Stansfield Q.C. (instructed by Glovers) for the Claimants
Mark Chennells (instructed by Fenwick Elliott LLP) for the Defendant
Hearing date: 15 th January 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Roger Ter Haar QC
Mr Roger Ter Haar QC:
These proceedings are for the enforcement of an adjudicator's decision. At the heart of the dispute before the Court is the question whether the adjudicator had jurisdiction to correct what both parties accept was an error on his part.
In his original decision, the adjudicator made an error in the calculation of the sum payable, as a result of which he concluded that no sum was due to the Claimants. When the error was pointed out to him, the adjudicator corrected the error and, by the corrected calculation, decided that the Defendant should pay the Claimants the sum of £654,119.65.
The Claimants apply for summary judgment for the sum that the adjudicator determined in his corrected decision. The Defendant contends that the original decision, containing the error, is binding on the parties, and that the corrected decision is not, on the basis that the correction was outside the scope of the slip rule.
Background and Summary
The relevant facts are not in dispute between the parties, and the summary which follows is substantially taken from the skeleton argument submitted by Mr. Piers Stansfield Q.C., counsel for the Claimants.
The Claimants were engaged by the Defendant as mechanical and electrical sub-contractors for a residential development in Kensington, London W8 by a contract dated 1 June 2015.
By a Referral dated 10 August 2018, the Claimants referred to adjudication (“the Adjudication”) a dispute concerning the valuation of the Claimants' works, and the sum due to them, pursuant to their application for payment dated 18 May 2018 (“the Application”) and the Defendant's corresponding payment notice dated 5 June 2018 (“the Payment Notice”). Specifically, the dispute concerned:
(1) the valuation of certain variations, the total of which the Claimants valued at £7,298,446.59 in the Application and the Defendant at £2,588,134.91 in the Payment Notice;
(2) the Defendant's entitlement to deduct contra charges, the Defendant having deducted the sum of £783,924.60 from sums otherwise due to the Claimants in the Payment Notice, whereas the Claimants contended that no deduction should be made;
(3) the Claimants' resulting entitlement to payment.
Paragraphs 1 to 4 of the Referral Notice read as follows:
(1) By this adjudication on Interim Application 23, Axis seeks to challenge 17 individual Variation valuations made by Multiplex and every cross-claim item on Multiplex Payment Notice. Details of the Multiplex Variation valuation items challenged are set out within this Referral.
(2) Axis does not wish to include its claim for loss and expense/prolongation within the scope of this adjudication. In the computation of the further amount to be paid to Axis, the Multiplex assessment of £NIL will apply. Axis reserves all of its rights to pursue its claim for loss and expense/prolongation as a separate dispute.
(3) Multiplex has no entitlement to claim or deduct for its cross-claim. The Adjudicator is invited to decide that the valuation of Multplex cross claim is £NIL.
(4) The dispute relates to the valuation of the variations and the resultant payment to be made by Multiplex, pursuant to Interim Application 23.
Mr Paul Jensen (“the Adjudicator”) was appointed as the adjudicator and the Adjudication proceeded under the Scheme for Construction Contracts (“the Scheme”). The parties agreed that the Adjudicator should have until Monday the 22nd October 2018 to reach his decision.
In his original decision dated the 18th October 2018 (“the Original Decision”), the Adjudicator summarised the dispute which he was asked to resolve in paragraph 4 of his Decision:
The dispute is as to the Claimant's claim for a valuation of and payment for 17 variations contained within the Claimant's Application for interim payment No. 23 of 18th May 2018 together with the valuation of the Respondent's cross-claims plus interest and reimbursement of the adjudication nomination body fee. The Claimant claims payment of the sum of £8,956,182.73 within 14 days plus VAT as appropriate in respect of the variations and claims that the Respondent's contra-charges should be valued at £0.00. The Respondent denies liability and claims that in accordance with its Payment Notice dated 5th June 2018 the Claimant has been overpaid by the sum of £647,645.34.
Paragraphs 5 to 8 read as follows:
THE CLAIM
5. The claim fails.
MY FEES
6. The Claimant shall within 7 days pay my fees. My fees are £29,515.50 plus VAT of £5,903.10 being a total sum of £35,418.60. If the Respondent pays my fees then the Claimant shall forthwith reimburse the Respondent with the amount of my fees.
GENERAL
7. I have confined my explanations to the essentials only but nevertheless I have carefully considered all the evidence and submissions although not specifically referred to in this Decision.
THE CLAIM
8. My revised valuation for Application No. 23 for month ending 31st May 2018 is in the tables below and as explained in the notes which follow.
There followed a table which contained the following:
| Total Gross Certified in the Payment Notice dated 5th June 2018 | £19,282,680.04 |
| Add Additional Amount of Variations as decided by me (from page 5) | £980,170.76 |
| Sub-total | £20,262,850.80 |
| Less Retention 1.5% (Agreed) | £303,942.76 |
| Sub-total | £19,958,908.04 |
| Less Previously Paid (Agreed) (including £200,000 paid in July) | £19,841,114.51 |
| Sub-total | £117,793.53 |
| Less Contra-Charges (from page 18) | £246.886.37 |
| Balance to the Claimant | -£129,092.84 |
The Decision continued:
MY DECISION
My Decision is a negative balance in favour of the Claimant and therefore the claim fails.
In coming to his conclusions, the Adjudicator considered and determined the value of the variations, at £980,170.76 more than the Defendant's valuation, and the value of the contra charges at £246,886.37, which is £537,038.23 less than the Defendant's valuation. On this basis, the amount certified as due to the Claimants should have increased by £1,517,209.
In his calculation of the sum due, however, the Adjudicator erroneously deducted the sum he had determined as the total value of the contra charges of £246,886.37 from the sum certified to the Claimants by the Defendant, which already included a deduction in respect of contra charges of £783,924.60. Therefore, the calculation in the Original Decision deducted a total sum in respect of contra charges of £1,030,810.97 (£246,886.37 + £783,924.60), rather than the Adjudicator's valuation of £246,886.37. The result of this error was that, in the Original Decision (as shown in the table above) no sum was stated to be due to the Claimants and its claim was said to have failed.
On Monday the 22nd October 2018 (the date when his decision was due), the Adjudicator issued a corrected decision, which removed the error and made consequential changes to the decision (“the Amended Decision”). As a consequence of the correction of the error, he determined that the sum of £654,119.65 was payable to the Claimants, and that the Defendant should pay this amount and his fees.
In an email sent shortly before sending the Amended Decision, the Adjudicator said this:
“There was confusion in the documents provided in the Referral at Tab 2 in that the second document headed ‘Payment Notice’ as signed by Mr. Sharpe on 5th May 2018 showed that the total certified after deduction of contra-charges of £783,924.60 gave a gross sum certified prior to retention of £19,922,737.09 and yet the Payment Notice on the previous page signed by Mr. Sharpe on the 4th June 2018 showed the gross sum before deduction of retention as £19,282,680.04. I therefore sent a number of emails to the parties to seek clarification of the amount paid and on the gross sum certified prior to retention, and I used the Claimant's figure in reply to my emails in my Decision. It was not clarified that that was after deduction of contra-charges, and no explanation was given as to the difference between the two versions of the Payment Notice. It is of course correct to say that my intention was that the contra-charges should be in the figure decided by me of £246,886.37, but whether or not this is a slip is not within my jurisdiction to decide, and therefore I will today send an amended decision correcting it as a slip, and it will be for the parties or others to decide which decision shall apply.”
In the Amended Decision, paragraphs 5 and 6 were changed to read:
THE CLAIM
5. The claim fails. The Respondent shall within 7 days pay to the Claimant the sum of £654,119.65.
MY FEES
6. The Claimant Respondent shall within 7 days pay my fees. My fees are £29,515.50 plus VAT of £5,903.10 being a total sum of £35,418.60. If the Claimant Respondent pays my fees then the Claimant Respondent shall forthwith reimburse the Claimant Respondent with the amount of my fees.
The table at paragraph 8 was now altered to the following:
| Total Gross Certified in the Payment Notice dated 5th June 2018 | £19,282,680.04 |
| Add back Contra-Charges previously deducted | £783,924.60 |
| Sub-total | £20,066,604.64 |
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