Bothma and another (t/a DAB Builders) v Mayhaven Healthcare Ltd
| Jurisdiction | England & Wales |
| Judge | JUDGE HAVELOCK-ALLAN |
| Judgment Date | 16 November 2006 |
| Neutral Citation | [2006] EWHC 2601 (QB) |
| Date | 16 November 2006 |
| Court | Queen's Bench Division |
| Docket Number | Claim no. 6BS90599 |
[2006] EWHC 2601 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN's BENCH DIVISION
BRISTOL DISTRICT REGISTRY (TCC)
Court No.11
The Guildhall
Small Street
Bristol BS1 1DE
His Honour Judge Havelock-Allan QC
(sitting as a Judge of the High Court)
Claim no. 6BS90599
Mr Mercer appeared on behalf of the Claimants
Miss Lee (instructed by Michelmores, Exeter) appeared on behalf of the Defendant
This judgment determines an application and a cross-application relating to the enforcement of an award of an adjudicator.
The award was made under a contract dated 1 June 2005 between the defendant as employer and the claimant as contractor. It was a contract for the alteration and enlargement of a nursing home and it was concluded on the JCT IFC 1998 form of contract. The contract sum was £488,695.38.
The architect originally appointed under the contract as the contract administrator was Mr Robin Hancock. The contract provided for the contractor to receive interim payments on a monthly basis and it contained, in accordance with the JCT IFC standard form, an arbitration clause and also a provision for adjudication. The provision for adjudication was in Article 8 and provided that either party was at liberty to refer any dispute or difference arising under the contract to adjudication. The arbitration clause in Article 9A of the contract was in a qualified form which provided that all disputes arising under or in connection with the contract were to be referred to arbitration save for disputes in connection with the enforcement of the decision of any adjudicator.
The provisions in the JCT form for the appointment of an adjudicator were deleted by the parties, so this was a contract in respect of which the adjudication provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1998 applied. I shall refer to that hereafter as “the Scheme”.
In April 2006 the contractor served a Notice of Adjudication and in due course Mr Hinchcliffe of the firm of EC Harris was appointed as adjudicator. Objection was taken by the employer to his jurisdiction and I will come back to that issue later. Nevertheless, the employer participated in the adjudication process under reservation of that jurisdictional objection. Mr Hinchcliffe found in his award that he did have jurisdiction and he published his award on 12 June of this year, making a number of findings.
The applications before the court are, first, an application under Part 24 brought by the contractor for summary judgment in the amount of the adjudicator's award and, second, a cross-application by the employer to strike out this claim, either under Part 3 or under Part 24 of the Civil Procedure Rules, on the ground that the award was made without jurisdiction. An ancillary application is made by the employer for a stay of the matters that were referred to the adjudicator under section 9 of the Arbitration Act 1996. It is accepted that the contractor's application and the cross-application are the obverse and reverse sides of the same coin.
It is necessary to say a little about the matters which gave rise to this adjudication. There is a dispute between the parties as to the date of completion in the contract. The contract form had the date inserted in it in manuscript. It is the contractor's case that that date originally was intended to be 31 March 2006 but that in error when the contract was entered into, the date of “31 March 2005” was inserted. Given that the contract was entered into in June of last year, the reference to 2005, if March was the month, must indeed have been a mistake. However, it is apparent from the photocopy of the contract I have seen that the manuscript date was overwritten at some stage so as to read “31 December 2005”. As I understand it, the contractor disclaims any responsibility for that amendment.
The contract was performed between July 2005 and 15 March 2006 by Mr Hancock issuing interim certificates of payment numbers 1 to 8 in favour of the contractor, all of which were paid by the employer.
On 11 January 2006 the contractor, perhaps out of an abundance of caution, applied to the contract administrator for an extension of time of 64.5 days.
On 7 February Mr Hancock granted an extension of time, but precisely what extension of time is not clear. At the end of January he appeared to indicate that he would extend the time for two months, but suggested that that was an agreed extension. Then on 7 February he confirmed that there was to be an extension of time of 24 days. However, there is another letter of the same date signed by Mr Hancock which seems to suggest that the extension allowed was one of 74 days. On none of these occasions did Mr Hancock indicate a view as to the date from which that extension should run, so that there was not only confusion as to the amount of any extension granted but also as to its duration, because of the dispute about the original completion date.
On 31 March 2006 a certificate of noncompletion was issued by Mr Hancock to the contractor. A few days later, on 4 April, the contractor made application for payment number 9, in which it valued the works which it had completed to date in the sum of £440,531.74. At or about that time the employer appears to have had second thoughts about retaining Mr Hancock as the contract administrator and he was replaced by Miss Carol Bell of the firm of Davis Langdon. On 10 April it was Miss Bell who issued the next interim payment certificate, that is certificate number 9, in which she valued the work completed in the sum of £417,201.
The invoice which the contractor raised in the light of that interim payment certificate was in a sum of £12,012.68. That invoice was in due course paid, but not before the contractor had indicated that it wished to refer a number of matters to adjudication. The Notice of Adjudication was drafted on behalf of the contractor with the assistance of solicitors and stated in paragraph 12 as follows:
“Disputes have now crystallised between the parties as follows:
1. The date for completion of the contract;
2. Scope and validity of architect's instructions issued to date;
3. The issue and nonwithdrawal of the notice of noncompletion; and
4. The sum of valuation number 9.”
These matters were the matters that were referred to Mr Hinchcliffe as adjudicator.
In his award of 12 June the adjudicator, in summary, found as follows: first, that the agreed date for completion of the contract (that is the original date) was 1 March 2006. It will be observed that this was neither the date contended for by the claimant nor the date contended for by the defendant. Second, that the contractor had been granted an extension of time of two months up to 1 May 2006. Third, that the certificate of noncompletion dated 31 March 2006 was invalid. Fourth, that all certificates and instructions issued by Mr Hancock until his replacement were valid. Fifth, that in respect of valuation number 9 the contractor was entitled to a further sum of £13,579 plus VAT but with no interest. And sixth, that the employer was liable to pay 85 per cent of the adjudicator's costs.
As I have already indicated, invoice number 9, which was raised by the claimant following Miss Bell's first certificate of interim payment, was paid at or about the time that the adjudication was commenced. It is a fact that since the adjudication was commenced and since the award, certificates for payments 10 and 11 have been issued and have been paid by the employer and that those certificates, with two possible exceptions, cover all the items which were the subject of financial claim by the claimant in the course of the adjudication.
The only sums therefore which are said to remain outstanding for payment pursuant to the award are (1) a sum of value added tax on a principal amount of £1,000 and (2) the award against the employer of 85 per cent of the adjudicator's costs. The adjudicator assessed 85 per cent of his costs in the sum of £6,668.25 plus VAT, so this amount of the award amounts to £7,952.69.
There is unfortunately a disagreement which persists between the parties as to whether the value added tax on the sum of £1,000, namely a sum of £117.50, is a sum which has yet to be paid, and therefore remains due and owing under the award if the award is enforceable.
My Lord, I think the claimant conceded that. It has been paid. I believe that is what he conceded.
My Lord, I am certainly not going to interrupt the judgment, first of all. I would point out at the end. May I perhaps just—
: No, perhaps I can pause at this moment to say that I understood you to tell me when I came into court that you do not drop the point.
Forgive me, my Lord; I thought I said we conceded the point.
: I thought you said you did not concede the point.
I apologise.
: I understand, and it is because of the acoustics in this court that I did not hear Mr Mercer on behalf of the claimant more clearly when I came into court a moment ago, that in fact that issue is now resolved, and I would add, in my view, rightly so, because the explanation that has been given to me of the sums that have been allowed and now paid under valuation number 10 in respect of plumbing and heating actually exceed the amount that was allowed by the adjudicator in his award. It must follow from that that if the sum allowed under valuation 10 has been paid plus its value added...
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