Barry M Cosmetics Ltd v Merit Holdings Ltd
| Jurisdiction | England & Wales |
| Judge | Bird |
| Judgment Date | 29 January 2019 |
| Neutral Citation | [2019] EWHC 136 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 29 January 2019 |
| Docket Number | Case No: HT-2018-000285 |
[2019] EWHC 136 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
The Rolls Building
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge Bird sitting as a Judge of this Court pursuant to section 9(1) of the Senior Courts Act 1981
Case No: HT-2018-000285
Mr William Webb (instructed by Birketts LLP) for the Claimant
Mr Justin Mort QC (instructed by Mills & Co Solicitors) for the Defendant
Hearing Date: 11 December 2018
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
This is an adjudication enforcement application by way of summary judgment. Enforcement is resisted on two grounds. First it is said that there was no “dispute” to refer to adjudication and secondly that the adjudicator acted in breach of the principles of natural justice. A third, short point arises about the nature of the hearing.
The Claimant was the employer and Merit the contractor. Merit presented its final account on 20 December 2017 some 9 months after practical completion. The adjudication was conducted in accordance with the Scheme for Construction Contracts Regulations 1998.
The Claimant referred the dispute to adjudication on 27 July 2018, notice of intention to refer having been given on 20 July 2018. The “dispute” was identified as the correct value of the Defendant's final account. The referral comprised 13 sections set out over 101 pages. Sections 6, 7 and 8 dealt with variations, extensions of time and loss and expense and omissions. The final account had raised a claim for £810,375.16 in addition to the contract sum for variations, and £317,569.87 in respect of loss and expense arising out of an extension of time of 35.5 weeks. The Claimant asserted that Merit had failed to adjust the contract sum to take account of omissions and took issue with the final account. No delay report was provided.
On 1 August 2018. The adjudicator awarded various extensions of time to the parties so that the Response would be due on 14 August and the Reply on 24 August 2018 with his final award to be published on 7 September 2018.
Merit responded on 14 August 2018. The Response itself was 33 pages long but referred to 9 lever arch files, one of which contained a delay analysis comprising some 792 pages prepared by Mr Niall McGuinness, to demonstrate that its costs were in fact £568,356.39 and so in excess of the actual sum claimed by Merit in their final account.
The Claimant served its Reply on 28 August 2018. Mr McGuinness' report was described in the Reply as:
“the first time [the Claimant] have had sight of any real explanation from Merit in relation to their extension of time claims”.
The Claimant served its own delay report, prepared by John Fagan of Arcadis, in response. The Claimant raised certain criticisms of Mr McGuinness' report noting for example that he had “seemingly ignored what actually happened on site at the time” and had chosen to base his report on “theoretical events”. Mr Fagan on the other hand had conducted a “retrospective analysis, looking back at what actually happened and what actually delayed the completion of the works”. The Claimant referred to the additional documentation provided by Merit in the Response and noted that it was:
“completely unfair and unjust for [the Claimant] to have to review and value an entirely different submission, in a limited timeframe, to that submitted with Merit's final statement”.
On 29 August 2018 the adjudicator wrote to both parties noting that in respect of variations the Reply contains “explanations which [Merit] will not have previously seen.” The adjudicator went on to say that he did not consider that to be an issue because each party has put forward its own basis of valuation. The adjudicator noted that no response was required; he reminded the parties that he was an experienced chartered QS and did not require either party to explain where it felt the other had gone wrong.
On the same day Merit expressed a wish to serve a rejoinder to respond to 6 specific points including the delay analysis and pointing out that the Claimant had tried to “fudge” certain concessions. Merit requested that it be given the opportunity to draw those instances to the attention of the adjudicator.
The Claimant responded to Merit's request on 30 August 2018, pointing out that Merit's Response (as had been made clear in the Reply) was “an entirely new and different submission to the presented [in the final account]”. It dealt with each of the 6 specific reasons relied on by Merit to justify the rejoinder, resisting in each case the need for a rejoinder. In respect of the delay report it noted:
“Merit forget that they provided a 792-page expert delay report as part of their Response. [The Claimant] obtained the delay analysis in reply to this. Merit have put forward their position, [the Claimant has] replied to this. It is therefore not necessary for Merit to make a further submission on this point”.
The submission to the adjudicator ends in this way:
“we consider that both parties have been afforded the opportunity to put forward detailed submissions as to the basis of their calculations. You have all the information required to enable you to reach a decision by 7 September 2018. [The Claimant does] not consider it necessary for endless rounds of further submissions…”.
On 30 August 2018 the adjudicator allowed Merit the opportunity to serve a rejoinder but limited to 12 pages and to dealing with the concessions they felt that the Claimant had tried to “fudge”. On the same day Merit objected to the adjudicator's direction that the rejoinder be limited. Merit complained that there was much ground to cover in the rejoinder:
“there are new cases to be addressed, a new delay analysis and a new witness statement quite apart from arguments relating to variations and loss and expense”.
The adjudicator responded, noting that he had directed that the rejoinder be limited to the “fudged concession” issue. Merit responded asserting that the adjudicator's stance was in effect a refusal to allow a rebuttal of the Claimant's points made in the Reply, was unfair and “in breach of the principles of natural justice”.
The adjudicator responded. He pointed out that all of the points raised in the Reply (he had made the same point, going so far as to express his view that it was “pleasing to note” in his letter of 29 August)
“were in direct reply to [Merit's] Response….. Party submissions cannot go on indefinitely. I understand each Party's position and it is unnecessary for the Parties to continue to inform me that they disagree….the principles of natural justice are always in my mind…I note that in accusing me of unfairness, [Merit have] not referred to the fact that I have invited a short rejoinder despite having been urged by [the Claimant] to deny that opportunity… I...
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Table of cases
...D Trentham Ltd v Lawield Investments Ltd 2002 S.C.L.R. 704 II.6.236 cxviii TaBLE OF CaSES Barry M Cosmetics Ltd v Merit holding Ltd [2019] EWhC 136 (TCC) III.24.16, III.24.46 Barter, Ex parte (1884) 26 Ch D 510 II.9.81, II.12.133, II.12.140, III.22.57 Barter v Mayor of Melbourne (1870) 1 aJ......
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Statutory adjudication
...J. 119 R Durtnell & Sons Ltd v Kaduna Ltd [2003] TCLR 7 at [42], per HHJ Seymour QC. 120 Barry M Cosmetics Ltd v Merit Holding Ltd [2019] EWHC 136 (TCC) at [17]–[20], per HHJ Bird. 1750 STATUTORY ADJUDICATION (xii) A dispute will not have arisen where a contractor has submitted a claim (for......