Bilton & Johnson (Building) Company Ltd v Three Rivers Property Investments Ltd
| Jurisdiction | England & Wales |
| Judge | Jason Coppel |
| Judgment Date | 14 January 2022 |
| Neutral Citation | [2022] EWHC 53 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2021-000393 |
[2022] EWHC 53 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Rolls Building, London, EC4A 1NL
Jason Coppel QC
(sitting as a Deputy High Court Judge)
Case No: HT-2021-000393
Helen Dennis (instructed by MJD Solicitors) for the Claimant
Rachael O'Hagan (instructed by Clyde & Co) for the Defendant
Hearing date: 2 December 2021
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.
Jason Coppel QC
(sitting as a Deputy Judge of the High Court)
Jason Coppel QC:
Background
The Claimant applies for summary judgment on its claim to enforce against the Defendant the decision of an adjudicator, Mr Nigel Davies (“ the Adjudicator”), dated 2 September 2021 (“ the decision”). The Adjudicator decided that the Claimant was entitled to an extension of time, to 14 November 2019, for works which it had contracted to perform for the Defendant and that the Defendant should pay to the Claimant the sum of £228,273.48, which it had previously deducted from the contractual payments due to the Claimant by way of liquidated damages. The Adjudicator also ordered the Defendant to pay interest and the costs of his engagement.
The findings of the Adjudicator which are essential to understanding his decision, and the dispute before me, are as follows:
i) On 10 August 2018, the Claimant submitted a formal tender in the sum of £1,902,633.30 to carry out works consisting of the refurbishment of an industrial estate owned by the Defendant at Jefferson Way, Thame, Oxfordshire (“ the Works”).
ii) The Employer's Requirements for the Works included that the Works would be carried out in four sections, corresponding to three groups of units in the industrial estate and site works. Among the Contract Particulars to be included in the contract – which would be the JCT Design and Build Contract 2016 – was that there would be completion dates for each section of the Works and a rate of liquidated damages for delay in completing each section of £2500 per week (§28).
iii) The Form of Tender drafted by the Defendant's agent, Brown & Lee surveyors (“ B&L”), after referring to the JCT Design and Build Contract 2016, stated that: “ We agree that unless and until this formal agreement is prepared and executed this Tender, together with your written acceptance thereof, shall constitute a binding contract between us”. On 15 August 2018, B&L communicated by letter to the Claimant that written acceptance and a contract between them came into being (§30). This contract was referred to by the Adjudicator as “the Original Contract” (§31).
iv) The Works commenced on 17 September 2018.
v) As anticipated in the Form of Tender, on 12 October 2018 B&L issued the Claimant with a formal JCT Design and Build Contract 2016 to sign and return. This contract was dated 15 August 2018. It was signed and returned by the Claimant on 9 January 2019. This contract was referred to by the Adjudicator as “the Signed Contract” (§32). The Signed Contract was found by him to have superseded the Original Contract (§163).
vi) The Contract Particulars of the Signed Contract specified a single date of completion of the Works as 26 April 2019, in contrast to the Contract Particulars in the Original Contract, which had contemplated different completion dates for the different sections of the Works. Relatedly, and in further contrast to the Contract Particulars in the Original Contract, liquidated damages were stated to be £2500 per week (as opposed to £2500 per section per week) (§34).
vii) Subsequently, in June 2019, B&L noticed these and other discrepancies between the Signed Contract and the Contract Particulars as originally issued and issued an amended contract for the Claimant to sign. The Claimant did not sign or otherwise consent to these amendments and the Signed Contract was not amended (§204).
viii) Consequently, the contractual rate of liquidated damages for delay was £2500 per week, which was capable of being apportioned between various units and sections of the Works in the event that some were completed before others.
ix) In the course of the Works, the Claimant sought and was granted certain extensions of time but only in respect of the individual section of the Works which had been affected by the relevant delay. This was incorrect: the contract did not provide for a completion date for each section and any relevant delay which affected the timing of the Works as a whole should have given rise to an extension for completion of the Works (§167).
x) The Claimant achieved Practical Completion of the Works on 13 December 2019 (§305). However, the Defendant had taken partial possession of certain aspects of the Works in August and December 2019.
xi) The Defendant withheld £234,641.56 in purported application of the contractual provisions on liquidated damages. That figure was founded upon a damages rate of £2500 per section per week of delay and did not take account of the fact that the Defendant had taken certain parts of the Works into possession at an earlier date than other parts (§179).
xii) There had been a number of delays to the Works (§306) which had not been the responsibility of the Claimant and which together entitled the Claimant to an extension of time to the Date for Completion of the Works from 26 April 2019 to 14 November 2019 (§329).
xiii) The Defendant was entitled to liquidated damages for delay in completing the Works. Having regard to (a) the contractual rate of £2500 per week and (b) apportionment of damages between the units/sections completed on the date of Practical Completion and those completed prior to 14 November 2019, the Defendant had been entitled to withhold £6368.08 (§331).
xiv) The Adjudicator did not accept the Defendant's argument that the defence of rectification had entitled it to proceed on the basis that the liquidated damages provisions of the Signed Contract entitled it to £2500 per section per week, as per the Original Contract (§§209–217).
xv) Since the Defendant had deducted £234,641.56 in respect of liquidated damages, the Defendant was required to pay £228,273.48 to the Claimant (§332). The Defendant was also required to pay £25,387.82 in interest (§337) and the Adjudicator's fees and expenses (§339).
The Defendant did not make the payments directed by the Adjudicator (save for paying half of the Adjudicator's fees and expenses). The Claimant therefore, on 12 October 2021, issued the current claim to enforce the Adjudicator's decision. On 21 October 2021, O'Farrell J gave permission for the Claimant to immediately serve an application for summary judgment and made provision for the hearing which took place before me.
At the hearing, the Defendant resisted the claim, and the application for summary judgment, on two grounds. First, it was argued that the Adjudicator's findings as to the applicable contractual terms were made in breach of natural justice because they were based on arguments that were not advanced by either of the parties and which were not canvassed with the parties. Second, it was argued that in refusing to accept the defence of rectification regarding the contractual rate for liquidated damages, the Adjudicator took a restrictive view of his jurisdiction which he did not canvass with the parties, thereby breaching natural justice and failing to exhaust his jurisdiction.
The relevant law
As O'Farrell J recently stated in Global Switch Estates 1 Ltd v Sudlows Ltd [2020] EWHC 3314 (TCC), §44: “ It is important to emphasise that the courts take a robust approach to adjudication enforcement”. She cited the well-known summary of the relevant legal principles given by Jackson J in Carillion v Devonport Royal Dockyard [2005] EWHC 778 (TCC), who had stated (§80, with citations omitted):
“1. The adjudication procedure does not involve the final determination of anybody's rights (unless all the parties so wish)”;
2. The Court of Appeal has repeatedly emphasised that adjudicators' decisions must be enforced, even if they result from errors of procedure, fact or law;
3. Where an adjudicator has acted in excess of his jurisdiction or in serious breach of the rules of natural justice, the court will not enforce his decision.
4. Judges must be astute to examine technical defences with a degree of scepticism consonant with the policy of the [Housing Grants, Construction and Regeneration Act 1996]. Errors of law, fact or procedure by an adjudicator must be examined critically before the Court accepts that such errors constitute excess of jurisdiction or serious breaches of the rules of natural justice.”
The Court of Appeal in Carillion endorsed the summary of Jackson J and added, materially (§§85, 87):
“The objective which underlies the Act and the statutory scheme requires the courts to respect and enforce the adjudicator's decision unless it is plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair. It should be only in rare circumstances that the courts will interfere with the decision of an adjudicator…
In short, in the overwhelming majority of cases, the proper course for the party who is unsuccessful in an adjudication under the scheme must be to pay the amount that he has been ordered to pay by the adjudicator. If he does not accept the...
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