Cantillon Ltd v Urvasco Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
Judgment Date27 February 2008
Neutral Citation[2008] EWHC 282 (TCC)
Docket NumberCase No: HT 08 07
Date27 February 2008

[2008] EWHC 282 (TCC)

IN THE HIGH COURT OF JUSTICE

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Akenhead

Case No: HT 08 07

Between:
Cantillon Limited
Claimant
and
Urvasco Limited
Defendant

Mark Raeside Qc (instructed By Wheelers) For The Claimant

Sean Brannigan (instructed by Fenwick Elliott LLP) for the Defendant

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Hearing dates: 8 February 2008

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APPROVED JUDGMENT

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Mr. Justice AKENHEAD:

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Introduction

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1. This is a claim to enforce an adjudication decision issued on 28 November 2007. It raises issues about natural justice, jurisdiction and the possible severability, or separable enforceability, of parts of the decision.

6

2. By a contract dated 1 August 2005 (“the Contract”), Urvasco Ltd (“Urvasco”) engaged Cantillon Ltd (“Cantillon”) to carry out demolition, piling and some other works (“the Works”) at 335–6, Strand, London WCThe two buildings to be demolished were at the western end of Aldwych. The contract was in the Standard Form of Building Contract issued by the JCT, Private Without Quantities 1998 Edition, which contained the standard adjudication clause.

7

3. Disputes arose between the parties largely revolving around Cantillon's claimed entitlement to extensions of time and in particular to two claims, one for 16 weeks and the other for 13 weeks, together with related loss and expense. A compendious dispute encompassing these two claims was submitted to adjudication and Dr Franco Mastrandrea was appointed as adjudicator in late June 2007. Following the exchange of written submissions and evidence and two meetings, he produced his decision which, against a much higher claim, allowed to the Claimant £391,565.60 plus VAT. Of this, on analysis, some one fifth relates to the claim for 13 weeks.

8

4. It is argued by Urvasco that Dr Mastrandrea had no jurisdiction and failed to follow the rules of natural justice with regard to his dealing with the prolongation costs relating to the 13 weeks. It is said that, as Cantillon expressly claimed for a particular 13 week period and for the specific preliminary type costs said to have been incurred in that period, the adjudicator could not jurisdictionally and should not have allowed costs for a different and later period, at least without giving Urvasco the opportunity to adduce evidence and argument that the costs during that later period were significantly less than the earlier period.

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The history and the adjudication

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5. Under the Contract, the named Architect was Foster & Partners (‘Foster’) whilst the Quantity Surveyor was Davis Langdon LLP (‘DL’). Works comprised the asbestos removal, soft strip out and demolition of the whole site, retention of Marconi House's listed facades, the perimeter piling and excavation works to form new additional basement levels and the relocation of the existing EDF [electrical] substations. These Works were designed to enable, ultimately, a new hotel, the Silken Hotel, to be constructed. The Contract Sum was £4,626,756. The contractual Date for Completion was 27 March 2006, while the Date for Possession was 15 July 200Practical Completion was said, ultimately, to have been achieved on 20 December 2006.

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6. From a fairly early stage, Cantillon apparently suffered delays. For instance, by letter dated 12 October 2005 to Fosters, Cantillon gave notice purportedly, pursuant to the contractual extension of time clause, that an extension was sought for some eight events which it was said was likely to have delayed completion.

12

7. By 19 April 2006, Fosters had granted an extension of time of 13 weeks in respect of a variation relating to the ‘in-board permanent piling’. That was confirmed in their letter to Cantillon of 19 April 2006. I will refer to this and the money claim relating to it as ‘The 13 Weeks Claim’.

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8. By letters dated 13 June 2006 and 30 June 2006 to Fosters, Cantillon made Interim Claim Submissions Nos. 1 and 2 respectively for further extensions of time. These related to events which occurred in 2005.

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9. By letters dated 22 November and 4 December 2006 to Fosters, Cantillon submitted claims for 8.5 and 7.5 weeks extension of time and related loss expense and damages. These claims were known as Statements of Claim Nos. 1 and 2. The sum claimed in those two claims was about £1.5m. In each letter, there appeared this paragraph:

“Accordingly, please ensure that you rectify undervaluation/ under certification of loss and/or expense previously certified in respect of this claim and the 21 weeks extension of time granted to date by reference to the said Appendix 6…”

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Thus Statement of Claim Nos. 1 and 2 were for a total of 16 weeks; I will refer to this as the '16 Weeks Claim'. The reference to there having been a “21 weeks extension of time granted to date” is the fact that, in addition to the 13 Weeks Claim, there was also a further eight weeks extension allowed for matters which were not ultimately referred to Dr Mastrandrea.

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10. Over the following months there were three references to adjudication, of which the second was abortive. In Adjudication 1, the Adjudicator, Mr Holloway, decided on 30 March 2007 that Cantillon was entitled to extensions of time in respect of what were called Event Nos. 1, 2 and 3, which applies at least in part to the 16 Weeks Claim.

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11. In the third adjudication, Mr Holloway again as Adjudicator decided on 18 May 2007 in effect that Cantillon was entitled to 16 weeks extension and that £480,000 which had been deducted as liquidated damages in respect of that period by Urvasco should be repaid.

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12. Thus it was that on 22 June 2007, Knowles on behalf of Cantillon served, in respect of the fourth adjudication, Notice of Adjudication and wrote in the following terms:

“We refer, inter alia, to Cantillon's Statements of Claim No. 1 and No. 2 for extension of time and loss and/or expense and/or damages issued on 22 November and 4 December 2006 respectively and the Adjudicator's Decisions in Adjudications No.1 and 3.

In the same letters Cantillon requested that Foster rectify undervaluation of the under certification of loss and/or expense and/or damages against its claims and also against Foster's Notification of Revisions to Completion Date…

Foster has failed to certify any amounts against Cantillon's claims dated 22 November 2006 or for December 2006, or Cantillon's claims prior to those submissions in respect of the same Listed Matters, and has under certified amounts for loss and/or expense/damages in respect of the 13 weeks extension of time awarded by Foster under its Notification of Revision to Completion Date No. 1 dated 24 March 2006.

By the said claims Cantillon sought payment of loss and/or expense/damages against, inter alia:

(i) Statement of Claim 1…

(ii) Statement of Claim 2…

(iii) Claims made prior to (i) and (ii) and pursuant to and prior to Foster's Notification of Revision to Completion Date No. 1 dated 24 March 2006 (EOT 1) amplified by Foster's letter dated 19 th April 2006 as to the relevant period of delay for the 13 weeks extension of time awarded by Foster due to the piling variation.

(iv) Updated requests for payment including Cantillon's letter dated 22 May 2007.”

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13. In the Notice of Adjudication itself attached to that letter, there was a more detailed exposition of what was being claimed. Paragraph 7 related in effect to the 16 Weeks Claim, which in effect related to events in 2005, whilst Paragraph 9 referred to the 13 Weeks Claim which related to events in 2006. It was explained that the further eight weeks extension was not the subject of this adjudication. Paragraph 10(h) referred to the fact that Foster had certified £260,000 in respect of the 13 weeks claim already. At Paragraph 14 Cantillon asks the Adjudicator to decide (amongst other things) the following:

'(A) That Cantillon is entitled to be paid the principal amount of loss and/or expense and/or damages in the sum of £1,416,418.73 plus interest / financing charges or such other sum plus interest/financing charges that the Adjudicator shall decide is due and payable, less any amount previously paid by Urvasco.'

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14. Following that Notice of Adjudication Dr Mastrandrea was appointed as Adjudicator. He is well-known in the arbitration and adjudication ‘business’. Apart from being a chartered surveyor and a fellow of the Chartered Institute of Arbitrators, he also is a qualified barrister.

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15. Under cover of a letter dated 29 June 2007 to Dr Mastrandrea, Knowles on behalf of Cantillon served its Referral Notice. A very substantial amount of documentation was attached to this notice. In the Referral Notice the Executive Summary states as follows:

“(a) Cantillon has claimed the 29 weeks extension of time for events in 2005 and 2006 and associated loss and/or expense/damages providing regular notifications in accordance with clauses 25 and 26 of the Contract.

(b) Foster granted 13 weeks extension of time for in-board piling in 2006 but failed to grant 16 weeks for events in 2005.

(c) Cantillon issued claims for time and money including its claims dated 22 November and 4 December 2006 (known as SOC 1 and 2) and these claims were rejected by Foster.

(d)The Adjudicator in Adjudications 1 and 3 decided that Foster was wrong to reject Cantillon's claim and Urvasco were required to repay £480,000 in LAD's plus interest to Cantillon. The Adjudicator gave an extension of time of 16 weeks for events in 2005 but was not asked to ascertain any loss and/or expense/damages.

(e)Due to Foster's failure to grant 16 weeks extension of time, decided on Adjudication No. 3, Foster also failed to certify payment of the related loss and/or expense to Cantillon, hence Cantillon's Notice of Adjudication No. 4.

(f)Cantillon asks the Adjudicator to decide on the amount due and payable now to Cantillon in respect of loss and expense and interest to the financing charges as claimed in the Notice...

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