AMD Environmental Ltd v Cumberland Construction Company Ltd
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Coulson |
| Judgment Date | 15 February 2016 |
| Neutral Citation | [2016] EWHC 285 (TCC) |
| Date | 15 February 2016 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2015-000427 |
[2016] EWHC 285 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, London, EC4A 1NL
The Hon Mr Justice Coulson
Case No: HT-2015-000427
James Thompson (instructed by Hewitsons LLP) for the Claimant
Justin Davis (instructed by Direct Access) for the Defendant
Hearing date: 15 February 2016
INTRODUCTION
This is a disputed adjudication enforcement. Two issues arise: the alleged absence of a crystallised dispute at the time of the notice of adjudication, and the failure of the adjudicator to address the matters in issue. Within that first point, there is a novel alternative argument to the effect that the adjudicator acted in breach of natural justice in seeking to obtain, and obtaining, further information from the claiming party which (so it is said) had not been provided before.
By a sub-contract made in June 2014 the defendant, Cumberland, engaged the claimant, AMD, to carry out mechanical and electrical works at the Hilton Hotel in Park Lane, London. By Application 11 dated 31 March 2015, AMD claimed a final account sum of £527,770.33. Cumberland did not agree with that claim. There were numerous exchanges between Cumberland and AMD between March and August 2015, but the issues were not resolved. On 2 September 2015, AMD issued a notice of adjudication.
The RICS appointed the well-known adjudicator, Mr Matt Malloy, to deal with this dispute. By a decision dated 21 October 2015, he determined as follows:
(a) The value of the works undertaken by AMD was £464,448.34.
(b) Cumberland's payless notice was inadequate and not in accordance with the 1996 Act (as amended by the 2009 Act).
(c) Cumberland was not entitled to set off any contra charges from payments due to AMD in respect of the claim.
(d) Cumberland were required to make payment to AMD in the sum of £77,993.26 plus VAT.
(e) Cumberland were to pay AMD interest in the sum of £2,044.92 up to the date of decision.
(f) Cumberland were to be primarily liable for the adjudicator's fees and expenses.
The sums at (d) and (e) above were not paid so, on 18 December 2015, AMD issued these enforcement proceedings. They now seek to enforce the adjudicator's decision by way of summary judgment pursuant to CPR Part 24.
THE JURISDICTIONAL CHALLENGES
In the adjudication, Cumberland took two jurisdictional points. The first was that the sub-contract was not in writing and the second was that the dispute had not crystallised by 2 September 2015.
The first point was misconceived because the statutory requirement that the contract had to be in writing, so as to permit adjudication, was deleted as long ago as November 2011. As to the second point; in a letter dated 17 September 2015 and repeated in his decision, the adjudicator rejected it. He pointed to the fact that there had been a five month gap between the application for payment on 31 March 2015, and the notice of adjudication on 2 September 2015. He was satisfied that, as a result of that, a dispute had crystallised between the parties.
Notwithstanding the adjudicator's ruling and the subsequent events, the crystallisation point is still relied on by Cumberland. As I have said, they put forward an alternative argument relating to particularisation, which I shall also address. In addition, Cumberland now take a further jurisdictional point to the effect that the adjudicator failed in his decision to address important matters in issue. I deal with those jurisdictional challenges in Sections 3 and 4 below.
CRYSTALLISATION
I have observed before that this argument is frequently advanced and almost as frequently rejected by the courts: see St Austell Printing Company Ltd v Dawnus Construction Holdings Ltd [2015] EWHC 96 (TCC). The only recent case of which I am aware, in which it was successfully argued that the dispute had not crystallised by the time that the adjudication started, was Beck Interiors Ltd v UK Flooring Contractors Ltd [2012] EWHC 1808 (TCC). That was a situation where the claim was sent to the responding party after close of play on Maundy Thursday, and where the notice of adjudication was then served the following Tuesday. Akenhead J had no difficulty in finding that the claim had not been disputed by silence over the Easter weekend, so that crystallisation had not occurred by the following Tuesday. But in general terms, the courts have found that a claim which is not accepted in whole or in part for a reasonable period thereafter, is deemed to be disputed: see Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd [2007] EWHC 2421 (TCC).
In the present case I have concluded that, for a number of reasons, the crystallisation argument is hopeless.
First I note that Cumberland replied to the adjudicator's ruling on 17 September 2015, that there was a crystallised dispute, by requesting that same day an extension of time to serve its response. Moreover, on 18 September 2015 Cumberland wrote again, expressly acknowledging the adjudicator's decision "to overrule our barrister's objections to an adjudication." There was no reference in either letter to any reservation of the right to challenge the decision subsequently on this same ground. On the contrary, these communications appear on their face to accept the adjudicator's ruling and treat him as having the necessary jurisdiction: see Nordot Engineering Services Ltd v Siemens PLC [2001] CILL 1778–1779. They certainly do not amount to an adequate reservation of the point so as to allow Cumberland to maintain the argument before me, in line with the guidance of Akenhead J in Allied P&L v Paradigm Housing Group Ltd [2009] EWHC 2890 (TCC).
Accordingly, I find that the crystallisation point is not open to Cumberland at this hearing.
Secondly, if I am wrong about that, and it is open to Cumberland to argue this point afresh, my conclusion is precisely the same as that of the adjudicator. I have been taken through some of the correspondence from between December 2014, (when AMD's claim was first intimated) to August 2015, (when the parties' respective final positions were clearly set out in the email exchanges). Eight months of detailed too-ing and fro-ing between the parties is, in my view, ample evidence of a dispute having crystallised. Indeed I note that, as early as December 2014, Cumberland set out their valuation of AMD's account in a negative sum, and that was a position and a figure from which they never really moved in the following eight months.
The specific point taken by Cumberland is that, during this lengthy period of exchanges, they repeatedly asked AMD for particulars of certain elements of the claim, and that those particulars were not always forthcoming. Indeed, in at least one important respect, it is said by Cumberland that particulars were provided by AMD in answer to the adjudicator's request, which they had previously failed to provide in answer to a similar request from Cumberland. Much of that version of events is disputed by AMD, who say that the particulars provided to the adjudicator were simply a re-ordering of information already supplied. I cannot of course, on an application for summary judgment, decide those factual issues. However, in my view, it is unnecessary for me so to do.
Whatever the precise factual position, I consider that it is wrong in principle to suggest, as Cumberland must do, that a dispute had not arisen until every last particular of every last element of the claim had been provided. When a contractor or a sub-contractor makes a claim, it is for the paying party to evaluate that claim promptly, and form a view as to its likely valuation, whatever points may arise as to particularisation. Efforts to acquire further particularisation should proceed in tandem with that valuation process.
Disputes about an alleged lack of particularisation are commonplace in building contract disputes. They are part of the overall dispute between the parties. In an ordinary case, a paying party cannot put off paying up on a claim forever by repeatedly requesting further information; a fortiori, a paying party cannot suggest that there is no dispute at all because the particularisation of the claim is allegedly inadequate. Any other conclusion would allow a paying party limitless time, either to avoid an adjudication altogether, or at least to avoid the enforcement of any adverse decision. It would deprive the payee of its statutory right to adjudicate.
Accordingly, in my view, the alleged absence of particularisation is not a proper ground for resisting enforcement of an adjudicator's decision. I respectfully agree with the similar conclusion reached by Weatherup J in Gibson (Banbridge) Ltd v Fermanagh District Council [2013] NIQB 16.
Thirdly, I reject the contention advanced by Mr Davis, that this was not an ordinary case, so that the principles outlined in paragraphs 14 – 16 above do not apply. He argued that this was an unusual situation where the claim provided by AMD was "so nebulous and ill-defined" that Cumberland could not sensibly be...
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