Amey LG Ltd v Amey Birmingham Highways Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Fraser |
| Judgment Date | 30 January 2019 |
| Neutral Citation | [2019] EWHC 234 (TCC) |
| Docket Number | No. HT-2018-000337 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 30 January 2019 |
[2019] EWHC 234 (TCC)
Mr Justice Fraser
No. HT-2018-000337
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY & CONSTRUCTION
COURT (QBD)
Rolls Building
Fetter Lane
London, EC4A 1NL
Mr A. Hickey QC (instructed by CMS Cameron McKenna Nabarro Olswang LLP) appeared on behalf of the Claimant.
Mr. M. Lixenberg (instructed by Herbert Smith Freehills) appeared on behalf of the Defendant.
The action currently before the court concerns a claim brought by Amey LG Ltd (“ALG”) against Amey Birmingham or ABHL, to whom I will refer as “Amey Birmingham”, in proceedings brought under CPR Part 8. It concerns the effect of two different adjudication decisions, both of which were issued by Mr. Molloy.
The issue before the court today is whether these proceedings should be struck out as an abuse of process. There are two components to that; one is the fact of existing proceedings between the same parties, on the same contract, and the second is the conduct of ALG in seeking to get the case listed as soon as possible and how it approached that in November 2018.
The two decisions by Mr. Molloy are as follows. The first decision is called “Molloy 1”, dated 8 June 2018, in which ALG was the referring party and sought some £2.9 million from Amey Birmingham. Mr. Molloy awarded them zero, although there were other declarations made in that decision. The second decision is called “Molloy 2”, dated 17 October 2018 and again, ALG was the referring party. In this adjudication ALG sought an interim payment of £3.2 million and they were awarded zero. There is however a tortuous history to these proceedings which I need to go through in a little bit of detail for explanatory reasons.
Amey Birmingham is a PFI contractor engaged by Birmingham City Council on a long-term basis in respect of the roads and highways of Birmingham. I will refer to that as the “PFI contract”. ALG is its subcontractor. A dispute arose between Birmingham City Council (“Birmingham CC”) and Amey Birmingham in respect of the PFI contract. That led to an adjudication and a set of proceedings which were given action number HT-2015-306. The adjudicator found in favour of Birmingham City Council in most respects, this being set out at [34] of the Court of Appeal judgment to which I refer below.
After a judgment by HHJ Raeside QC in Leeds in 2016, he came to the opposite conclusion and issued a declaration that the adjudicator was wrong. This therefore meant that the Amey Birmingham CC became the successful party. Birmingham CC appealed to the Court of Appeal, who decided in its favour. This is set out in a judgment handed down on 22 February 2018 which is at [2018] EWCA Civ 264, the leading judgment being given by Jackson LJ. In that judgment, Birmingham succeeded on the issues, and the parties agreed an order setting out the material effect of the judgment, which effectively reinstated what the adjudicator had decided (although it is more complicated than that, and recourse should be had to the judgment for its full effect and decisions). Birmingham CC took the view that the effect of the decision was to require Amy Birmingham to repay a very sizeable amount of money, approximately £62 million, to Birmingham CC. Amey Birmingham had been paid this as part of the PFI payments, and it was this that had led to the dispute that had been referred to the adjudicator.
Amey Birmingham disagreed about that. The grounds of this disagreement are a little difficult to follow, but for reasons which will become clear (given what happened before Stuart-Smith J in October, as to which further below) it is not necessary to go into details. Principally it was said that the actual order of the Court of Appeal did not include a paragraph ordering repayment. Birmingham therefore adjudicated on the repayment issue and succeeded, and issued proceedings against Amey Birmingham in 2018 with action number HT-2018-219. In those proceedings, Birmingham CC sought summary judgment on the decision in respect of enforcement that ordered repayment, and also summary judgment on the questions of interpretation decided by the adjudicator. In other words, final resolution of those underlying issues of interpretation, but by way of summary judgment rather than enforcement.
In those proceedings, in which Amey Birmingham was the defendant, Amey Birmingham then issued Part 20 proceedings against ALG. It is those Part 20 proceedings that have led to the existing situation between Amey Birmingham and ALG, in yet further proceedings. The Part 20 proceedings were issued on 24 August 2018. The full relevance of those proceedings will become clear. O'Farrell J ordered a hearing for directions to take place on 20 September 2018 in both the main proceedings and the Part 20 proceedings in action HT-2018-219, in other words, between Birmingham CC, Amey Birmingham, and the Part 20 claim against ALG. ALG challenged the jurisdiction of the court in the Part 20 proceedings but took part in the directions hearing on that date without prejudice to its contention that the court had no jurisdiction.
That hearing was before me. Mr. Hickey QCl appeared for AGL and argued very forcefully that the Part 20 proceedings should, unusually, be case managed and heard separately from the main proceedings. He maintained that the Part 20 proceedings were essentially separate and distinct. This was because the PFI contract and the contract between ALG and Amey Birmingham were not on what are called “back to back” terms, and that the issues between Birmingham CC and Amey Birmingham in the main action were different from the issues between Amey Birmingham and ALG. I agreed with him about that. It also appeared to me that the Part 20 proceedings had been issued as a device by Amey Birmingham in order (potentially) to give further time prior to proper resolution of the issues in that action regarding the enforcement of the adjudicator's decision in particular. I ordered that the Part 20 proceedings should be dealt with and case managed separately. I also ordered that a hearing should take place on 15 November 2018 to determine the jurisdiction point that was being taken by ALG in the Part 20 proceedings.
I made separate and more expedited directions in the main action. This led to the summary judgment application in the main proceedings in HT-2018-219 being heard on 4 October 2018 by Stuart-Smith J, in which Birmingham CC were successful. The Judge granted summary judgment on 4 October 2018 in an ex tempore judgment in respect of the adjudicator's decision, thus giving effect to the approach of the TCC to resolving issues on enforcement of an adjudicator's decision swiftly and in accordance with the legislative purpose of adjudication. On some of the more complicated issues that were being resolved finally, although on a summary judgment basis, he reserved judgment and handed that down on 2 November 2018. That judgment is at [2018] EWHC 2875 (TCC). Birmingham CC therefore acquired an order of the court in its favour in respect of the payment of approximately £62 million.
Meanwhile, there had been other adjudications going on between ALG and Amey Birmingham. These are the ones to which I have referred, leading to Molloy 1 and Molloy 2. Molloy 2 was issued on 17 October 2018, as I have said, and ALG was unsuccessful in recovering any sums.
On 31 October 2018, ALG issued separate proceedings against Amey Birmingham, this time with action number HT-2018-337. These were issued under CPR Part 8. At this time, there were still live Part 20 proceedings between the same parties on the same contract including, as I have identified, the jurisdictional challenged raised by ALG concerning the...
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