Aspect Contracts (Asbestos) Ltd v Higgins Construction Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 23 May 2013 |
| Neutral Citation | [2013] EWHC 1322 (TCC) |
| Docket Number | Case No: HT-12-46 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 23 May 2013 |
[2013] EWHC 1322 (TCC)
Mr Justice Akenhead
Case No: HT-12-46
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Fiona Sinclair QC (instructed by Mills & Reeve LLP) for the Claimant
Isabel Hitching (instructed by Silver Shemmings LLP) for the Defendant
Hearing date: 19 April 2013
Introduction
1. This case raises an interesting and important issue as to when in terms of limitation of action a party which is dissatisfied with the substance of an adjudicator's decision needs to issue its proceedings or to raise any counterclaim in those proceedings to challenge and seek to overturn that decision. It is necessary to review the decision in Jim Ennis Construction Ltd v Premier Asphalt Ltd [2009] EWHC 1906 which decided that there was an implied term of the contract in that case that when a dispute was referred to adjudication pursuant to the Scheme for Construction Contracts (“the Scheme”) and one party paid money to the other in compliance with the adjudicator's decision made pursuant to the Scheme that party remained entitled to have the dispute finally determined by legal proceedings and if or to the extent that the dispute was finally determined in its favour to have that money repaid to it. Put another way, the issue is whether the paying party's cause or right of action to recover money paid out pursuant to an adjudicator's decision runs from the date of payment and therefore the six year limitation period runs from that moment. The alternative view is that the basic cause or right of action in relation to which the money was paid out commences whenever it otherwise did before the decision was issued.
The Facts
2. Most of the facts have been agreed for the purposes of the determination of the preliminary issues which relate to the existence of the pleaded implied term, the limitation period applicable thereto, the limitation period applicable to the counterclaim and the existence or otherwise of a claim for restitution.
3. Aspects Contracts (Asbestos) Ltd (“Aspect”) is and was a company which specialises in the provision of asbestos management services including asbestos surveys. Higgins Construction PLC (“Higgins”) is and was a substantial UK construction company which specialises in the construction and refurbishment of community housing, education and healthcare properties.
4. Higgins was considering in or about March 2004 whether to contract with Notting Hill Housing Trust for the demolition and redevelopment of the Ivybridge Estate, Hounslow, London. To that end, Higgins approached Aspect to carry out an asbestos survey.
5. The following are the agreed facts:
| Date | Event |
| March 2004 | The Contract between Aspect and Higgins for Aspect to carry out an asbestos survey and provide a survey report. The scope of the survey is in dispute. |
| 23/24 March 2004 | Survey carried out by Aspect |
| 27 April 2004 | Survey report sent to Higgins |
| 30 April 2004 | Invoice rendered by Aspect to Higgins |
| 24 June 2004 | Higgins paid invoice |
| October 2004 | Higgins as main contractor enters into design and build contract with Notting Hill Housing Trust for demolition and redevelopment of the Ivybridge Estate |
| 9 December 2004 | Higgins enters sub-contract with Falcon Refurbishment and Demolition for asbestos removal, demolition and site clearance. |
| February 2005 | Alleged discovery of additional asbestos containing material (“ACMs”) in the apartment blocks at the Estate |
| 24 March 2005 | Letter from Falcon to Higgins confirming agreement between Higgins and Falcon as to amount of additional payment to be made by Higgins to Falcon for additional asbestos removal |
| 19 July — 15 August 2005 | Falcon removed additional ACMs upon instructions from Higgins |
| 27 September 2005 | Piling rig arrives on site: end of period of 21 weeks' alleged critical delay, of which Higgins alleged that 17 weeks was attributable to discovery of additional asbestos |
| 26 June 2009 | Higgins served Referral Notice referring dispute with Aspect to adjudication |
| 28 July 2009 | Adjudicator's decision issued |
| 6 August 2009 | Aspect paid Higgins £658,017 in compliance with the Adjudicator's decision |
| 3 February 2012 | Aspect commences current proceedings (with no pre-action protocol procedures or any prior notice of issue of proceedings). Particulars of Claim served alleging implied term that unsuccessful party in adjudication entitled to have dispute determined by litigation and to repayment if successful |
| 4 May 2012 | Defence and Counterclaim served. Implied term admitted and no limitation defence pleaded. Counterclaim seeks difference between the sum claimed as damages in the adjudication and the lower sum decided on by the Adjudicator |
| 19 June 2012 | Reply to Defence and Counterclaim served contending that the Counterclaim is barred by limitation |
| 31 January 2013 | Hearing before TCC. Leave granted to amend the Defence and Counterclaim to withdraw admission about implied term and to plead limitation defence or alternatively that both claim and counterclaim are not statute barred. Preliminary issues ordered. |
6. Although there is an issue between the parties as to the scope of the asbestos survey which Aspect was engaged to carry out, it is common ground that the contract between the parties incorporated the proposal or quotation submitted by Aspect to Higgins on 9 March 2004 and that this was accepted orally by Higgins. Neither party has suggested that there is anything in the documents forming the contract which particularly adds anything to the debate. There was no express adjudication clause or agreement.
7. It is clear that Aspect and Higgins and/or their solicitors were in contact with each other in 2005 with Higgins complaining in effect that Aspect had failed to pick up the presence of asbestos and with Aspect denying any responsibility. The first letter from Higgins complaining to Aspect was dated 21 March 2005 and claims were intimated as the months went on.
8. The adjudicator, Rosemary Jackson QC, set out in her decision that Higgins was claiming £822,482.67 as damages broadly for breach of contract for failing to conduct a proper and appropriate survey and failing to identify the presence of ACM's. She set out the chronology and analysed what the contract was and what the report produced by Aspect addressed and did not address. She found that there were breaches of contract on the part of Aspect and that there were damages which together with interest produced a substantial award in favour of Higgins, albeit some £200,000 less than was being claimed.
9. It remains unclear why Higgins took some four years to proceed to adjudication and why Aspect did not issue proceedings for 2 1/2 years after the adjudication decision.
The Proceedings
10. In its Particulars of Claim, Aspect “seeks a final and binding resolution of a dispute which was referred to adjudication”. It seeks a declaration that Aspect was not liable to pay damages and/or interest to Higgins in the amount decided by the Adjudicator or at all. It seeks repayment, or alternatively restitution, of the sum of £658,017 or such other sum as the Court shall determine. It asserts in Paragraph 3 that “the burden of proof upon all issues of liability and quantum (including the issues as to Aspect's obligations, Aspect's breach of obligation, causation of loss suffered by Higgins, and recoverability of damages in respect of that loss) is upon Higgins”. It sets out at Paragraphs 6 to 10 what its obligations were pursuant to the contract. It asserts (which is admitted) that the contract did not comply with the Housing Grants, Construction and Regeneration Act 1996 (“ HGCRA”) and that the Scheme for Construction Contracts applied to it. At Paragraph 12, it pleads the implied term which has given rise to the preliminary issues:
“…that in the event that any dispute between the parties was referred to adjudication pursuant to the Scheme and one party paid money to the other in compliance with the adjudicator's decision made pursuant to the Scheme, that party remained entitled to have the dispute finally determined by legal proceedings and if or to the extent that the dispute was finally determined in its favour, to have that money repaid to it.”
Paragraphs 13 to 15 address the performance by Aspect of its obligations with an assertion that the survey was carried out with reasonable care. Paragraphs 16 to 35 assert broadly that Higgins' allegations in the adjudication about Aspect's performance and on damages were wrong for a variety of reasons. So far as damages are concerned a number of the averments are that Aspect do not admit or put Higgins to proof on the issue of damages. There is then reference to the award of interest being for more than Higgins was entitled and to the adjudicator's decision. At Paragraphs 40 and 41, it seeks a declaration as referred to above, repayment of the sum of £658,017 awarded against it by the adjudicator and the costs of the adjudication together with interest on any sums recovered by it. At Paragraph 42 it pleads:
“Further or alternatively, Aspect paid the said sum to Higgins under compulsion of law. That compulsion will be released upon judgement hearin Aspect's favour. Aspect will be entitled to restitution of the sum paid.”
11. The Amended Defence and Part 20 Counterclaim denies the implied term saying that there is no necessity or room for the implication. It asserts that the parties' rights to have a dispute determined by the Court “are preserved by but do not stem from the” HGCRA and that the HGCRA and the Scheme do not alter or extend limitation periods for bringing a...
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