Broughton Brickwork Ltd v F Parkinson Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Stephen Davies |
| Judgment Date | 21 October 2014 |
| Neutral Citation | [2014] EWHC 4525 (QB) |
| Docket Number | Claim No. A50MA103 |
| Court | Queen's Bench Division |
| Date | 21 October 2014 |
[2014] EWHC 4525 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
TECHNOLOGY AND CONSTRUCTION COURT
Civil Justice Centre
1 Bridge Street West
Manchester
M60 9DJ
His Honour Judge Stephen Davies
Sitting as a Judge of the High Court
Claim No. A50MA103
Counsel for the Claimant: Mr Jonathan Lee (Instructed by Freeths LLP, Solicitors, Manchester)
Counsel for the Defendant: Miss Anneliese Day QC (Instructed by Squire Patton Boggs (UK) LLP, Solicitors, Manchester)
THE JUDGE: This is an application for summary judgment to enforce a decision of an adjudicator, Mr Paul Greenwood, made on 4 th September 2014, in which he decided that the defendant should pay the claimant £96,000 odd including interest. The defendant's case is that there should be no enforcement of that decision because there was a real and a serious breach of natural justice. In short, it is submitted by the defendant's counsel, Miss Day QC, that this is a case where something has genuinely gone seriously wrong, and where what has occurred was not rough justice, which she accepts cannot prevent a decision being enforced, but no justice at all. The defendant's first specific complaint is that the adjudicator decided a particular point which was of considerable importance to the determination of the dispute on a basis which was not the way in which the parties had argued it, and without first giving the parties the opportunity to comment. Its second complaint is that in deciding that point the adjudicator failed, through inadvertence, to address a particular document which the defendant had placed before him and which, had he considered it, would have led to his reaching a different conclusion in the defendant's favour, as indeed says the defendant the adjudicator has subsequently acknowledged.
In short the claimant's case, as presented by its counsel Mr Lee, is that there was no breach of natural justice at all in this case, let alone a real or a serious breach. In summary Mr Lee submits that the adjudicator was not just entitled but required to decide the point which he did, and that there was no need for him to revert to the parties before doing so. He also submits that his inadvertent error in not seeing and, therefore, not considering the particular document was firstly largely contributed to, if not wholly caused, by the defendant's own conduct and secondly, and in any event, was no more than a mere procedural error which does not invalidate the decision.
Background to the dispute
The defendant building contractor, F Parkinson Limited, engaged the claimant, Broughton Brickwork Limited, as a subcontractor to carry out certain works at sites in Warrington pursuant to the terms of the subcontract made between them. The terms and conditions of sub-contract applied the adjudication provisions contained in the Scheme for Construction Contracts and, in that regard, I have been referred to paragraph 17 of the Scheme, which provides that "the adjudicator shall consider any relevant information submitted to him by any of the parties to the dispute and shall make available to them any information to be taken into account in reaching his decision". The terms and conditions also included a clause providing for service of contractual notices either by post, e-mail or facsimile, and that if served by e-mail or facsimile between 9am and 5pm on a business day they would be deemed received on that day.
In June 2014 the claimant submitted its interim application number 12 which, it is common ground, the defendant has not paid. The adjudicator subsequently found, contrary to the defendant's case in the adjudication, that this application was a valid payment application, that no valid payment notice or pay less notice had been served by the defendant in accordance with the contractual timetable which he decided was applicable (in short, a 35 day payment cycle with provision for when notices were required to be served by the defendant) and, accordingly, that there was no defence to the claim for payment of application 12 in itself. These findings are not, and cannot be, the subject of challenge in these enforcement proceedings. In particular, there can be and is no challenge to his conclusion that under the contract, as he construed it, a pay less notice had to be effectively served within twelve days of the due date for payment.
He also however had to go on to resolve a further defence raised by the defendant as to the impact of the subsequent payment cycles numbered 13 and 14, and it is his decision in relation to the subsequent pay less notices which the defendant contended had been served in accordance with the contract in relation to those payment cycles which is at the heart of this case.
The submissions before the adjudicator
In order to address the parties' respective cases I need to refer to the way in which this issue arose and was argued by the parties before the adjudicator and, in particular, the way in which the response incorrectly identified a document upon which the defendant relied to prove its case as to service of a subsequent pay less notice. Nothing of any relevance was said about these subsequent payment cycles in the referral notice, but it was something which was raised by the defendant by way of defence in its response. In particular, in paragraph 4.3 the defendant set out the relevant chronology, as it asserted it to be, in relation to payment cycles 12, 13 and 14. For present purposes it suffices to note that in relation to payment cycle 14 its case was that on 30 th July 2014 it issued a pay less notice against payment notice number 14. Mr Lee drew to my attention that it said "issued" as opposed to "serve" and also that payment notice 14 was issued on 18 th July so that if the notice had been served on 30 th July it would have been within time on the basis of the adjudicator's conclusions but, if served after that date, would not have been.
I also refer to paragraph 7.1 and 7.2 of the response, which introduced and set out the defendant's case to the effect that payment cycle 12 had been superseded by payment cycles 13 and 14 and, in particular, by the pay less notices issued in relation to those cycles. Paragraph 7.2 refers back to the chronology in paragraph 4.3 and asserted that it was clear from that chronology that the notice of adjudication was served by the claimant after it had issued payment notices numbers 13 and 14 and the defendant had issued pay less notice numbers 12 and 13. Then these words appear in brackets: "Pay less notice number 14 was issued to Broughton before the referral notice was served". Immediately after the words, "Pay less notice numbers 12 and 13", there appears in brackets page references to the documents which accompanied the response, namely 143 to 183. Immediately after the words "Pay less notice number 14" there appears in brackets a reference to pages 184 to 204. It is common ground that if one goes to page 184 of the bundle which was before the adjudicator, one finds the defendant's pay less notice in relation to payment cycle 14 which is dated 30 th July 2014 and which, as Mr Lee noted, contained no indication on its face that it was to be or had been submitted by e-mail as opposed to any other particular means. It is also common ground that if one was to turn back to page 183 which, as I have already said, was said to be the last page relevant to pay less notices number 12 and 13, that is in fact a copy of an e-mail sent by the defendant to the claimant at 16.44 hours on 30 th July which states that it attaches a copy of pay less notice number 14 and that a hard copy will be sent in the post.
In his submissions Mr Lee contended that there was material from which the court could draw the inference that this was not simply an inadvertent error but a deliberate tactic by the defendant, who did not want to prejudice its case in relation to service of the earlier pay less notices by drawing specific attention to the fact that the only evidence it had of service by e-mail of any of these notices related to notice number 14. Miss Day strongly contested that it was proper for the court to draw such an inference, at all or on any view on a Part 24 application. I am satisfied that there is no proper or sufficient evidential basis for me to make such a finding and I decline to do so.
However, I am satisfied that it was an error on the part of the defendant which on any view caused, or at least materially contributed to, the problem which subsequently emerged. In my view the error was threefold: (1) the failure specifically to assert in the body of the response that pay less notice 14 was, in fact, served by e-mail as opposed to any other means; (2) the failure in the body of the response specifically to draw to the adjudicator's attention the existence or relevance of the e-mail; (3) the misnumbering of the page references, so that if the adjudicator was looking for himself for evidence in relation to service of pay less notice 14 they would naturally look at page 184 onwards rather than to page 183.
Returning to the response, in paragraph 8.2(1) there appeared a positive case to the effect that even if the defendant was wrong about the 35 day payment cycle (that is the point to which I have referred as to when, contractually, notices were required to be served by the defendant), pay less notices number 13 and 14 were served in time on Broughton's own case in any event. It follows that the defendant was advancing a positive case that it was the...
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