CC Construction Ltd v Raffaele Mincione
| Jurisdiction | England & Wales |
| Judge | Eyre |
| Judgment Date | 15 September 2021 |
| Neutral Citation | [2021] EWHC 2502 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2021-000129 |
[2021] EWHC 2502 (TCC)
HH JUDGE Eyre QC
Case No: HT-2021-000129
HT-2021-000130
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
7 Rolls Building, Fetter Lane,
London, EC4A 1NL
Nicholas Collings (instructed by Ashfords LLP) for CC Construction Limited
Gideon Shirazi (instructed by Charles Russell Speechlys LLP) for Raffaele Mincione
Hearing date: 13 th July 2021
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.
HH Judge Eyre QC:
Introduction .
Mr. Raffaele Mincione (“the Employer”) owns 57 – 59 Clabon Mews, London SW1 (“the Property”). In 2016 the Employer engaged CC Construction Ltd (“the Contractor”) to design and build the shell and core of a new house at the Property. The new house was to be of three storeys with three basement levels and the works included the demolition of the two existing mews houses. The written agreement of 21 st April 2016 (“the Contract”) adopted the JCT Design and Build Contract (2011 Edition) albeit with a number of amendments and the works were to be performed for the sum of £2,587,250. The Contract was varied in September 2017 when the Contract Sum was increased to £3,130,602 and the completion date postponed.
The Employer has declined to pay the sum of £483,512.12 (net of VAT but inclusive of interest) which the Contractor says is due following the service of a Final Statement and pursuant to an adjudication decision (“the Decision”) determining that this sum is payable. The Employer's case is that the operation of the terms of the Contract in the circumstances of this case and in the light of the parties' actions means that the Final Statement served by the Contractor was not conclusive; that in fact a balance is owing to the Employer; and that the Decision is not enforceable. The Contractor disputes the Employer's interpretation of the Contract and contends that it is entitled to enforce the Decision.
The matter came before me on 13 th July 2021 for a remote hearing by way of MS Teams of the Employer's Part 8 Claim seeking declarations as to the effect of the Contract in the circumstances which had arisen and of the Contractor's claim for summary judgment in respect of its Part 7 Claim to enforce the Decision.
The Factual Background .
The Contract was dated 21 st April 2016 but the Contractor had in fact taken possession of the site about a fortnight earlier.
The Works were defined as:
“The design and construction of a new three storey single dwelling including three basement levels at the property shown edged red on the site plan annexed at Annex B.”
The Contract did not utilise the provision in the standard form of contract for the division of the Works into Sections.
Clause 1.7.1 provided that:
“Any notice or other communication between the Employer … and the Contractor that is expressly referred to in the Agreement for these Conditions (including without limitation, each application, approval, consent, confirmation counter-notice, decision, instruction or other notification) shall be in writing.”
The Contract defined “Final Statement” as having the meaning provided in clauses 1.8 and 4.12. Clause 1.8.1.1 of the standard form of contract had been deleted and as a consequence clause 1.8 provided for the effect of the Final Statement as follows:
“.1 As from the due date for the final payment specified in clause 4.12.5 and in addition to the effect referred to in clause 4.12.6, the Final Statement or, as the case may be, the Employers Final Statement (‘the relevant statement’) shall, except as provided in clauses 1.8.2, 1.8.3 and 1.8.4 (and save in respect of fraud), have effect in any proceedings under or arising out of or in connection with this Contract (whether by adjudication, arbitration or legal proceedings) as:
…
.2 conclusive evidence that all and only such extensions of time, if any, as are due under clause 2.25 have been given: and
.3 conclusive evidence that the reimbursement of direct loss and/or expense, if any, to the Contractor pursuant to clause 4.20 is in final settlement of all and any claims which the Contractor has or may have arising out of the occurrence of any of the Relevant Matters whether such claim be for breach of contract, duty of care, statutory duty or otherwise.
.2 If adjudication, arbitration or other proceedings have been commenced by either Party before the due date for the final payment the relevant statement shall have effect as provided in clause 1.8.1 upon and from the earlier of either:
.1 the conclusion of such proceedings in which case the statement shall be subject to the terms of any decision, award or judgement in or any settlement of such proceedings; or
.2 the expiry of any period of 12 months from or after the submission of the statement, during which neither Party takes any further step in such proceedings…
.3 Subject to clause 4.12.6, if adjudication, arbitration or other proceedings are commenced by either Party on or after the due date for the final payment and not later than 28 days after the due date, the relevant statement shall have effect as conclusive evidence as provided in clause 1.8.1 save only in respect of the matters to which those proceedings relate.
.4 …”
Clause 2.28 provided for the issue of a Non-Completion Notice if the Contractor failed to complete the Works by the Completion Date. Clause 2.29 then provided for the Employer to withhold or to deduct or to require the payment of liquidated damages by a notice given no later than 5 days before the final date for payment provided that a Non-Completion Notice had been served and the Employer had given notice before the due date that he may so withhold, deduct, or require.
Clause 2.30 provided thus for the Employer to take possession of a part or parts of the Works:
“If at any time or times before the Practical Completion Statement or relevant Section Completion Statement the Employer wishes to take possession of any part or parts of the Works or a Section and the Contractor's consent has been obtained (which consent shall not be unreasonably delayed or withheld), then, notwithstanding anything expressed or implied elsewhere in this Contract, the Employer may take possession of such part or parts. The Contractor shall thereupon give the Employer notice identifying the part or parts taken into possession and giving the date when the Employer took possession (‘the Relevant Part’ and ‘the Relevant Date’ respectively).”
Clause 2.32 (incorporating the amendment of the standard form) provided as follows for a notice to be issued when defects in a Relevant Part had been made good:
“When any defects, shrinkages or other faults in the Relevant Part which the Employer has required to be made good under clause 2.35 have been made good, he shall issue a notice to that effect provided that the Employer shall not be required to issue that notice earlier than the expiry of the Rectification Period for the Relevant Part.”
Clause 2.35 provided that:
“If any defects, shrinkages or other faults in the Works or a Section appear within the relevant Rectification Period due to any failure of the Contractor to comply with his obligations under this Contract:
.1 such defects, shrinkages and other faults shall be specified by the Employer in a schedule of defects which he shall deliver to the Contractor as an instruction not later than 14 days after the expiry of that Rectification Period; and
.2 notwithstanding clause 2.35.1, the Employer may whenever he considers it necessary issue instructions requiring any such defect, shrinkage or other fault to be made good, provided no instructions under this clause 2.35.2 shall be issued after delivery of a schedule of defects or more than 14 days after the expiry of the relevant Rectification Period.
Within a reasonable time after receipt of such schedule or instructions, the defects, shrinkages and other faults shall at no cost to the Employer made good by the Contractor unless the Employer shall otherwise instruct….”
At 2.36 the Contract (again incorporating the amendment of the standard form) dealt as follows with the issuing of a Notice of Completion of Making Good:
“When the defects, shrinkages or other faults in the Works or a Section which the Employer has required to be made good under clause 2.35 have been made good, he shall issue a notice to that effect (a “Notice of Completion of Making Good”) provided that the Employer shall not be required to issue any Notice of Completion of Making Good earlier than the expiry of the Rectification Period. That notice shall not be unreasonably delayed or withheld, and completion of that making good shall for the purposes of this Contract be deemed to have taken place on the date stated that notice.”
Clauses 4.1 – 4.3 dealt with adjustments to the Contract Sum. For present purposes it is to be noted that those clauses did not make provision for the Contract Sum to be adjusted to take account of liquidated damages under clause 2.29.
Clause 4.12.1 provided for the Contractor to submit the Final Statement together with such supporting documents as the Employer may reasonably require following practical completion.
The calculation of the Final Statement was addressed thus at clause 4.12.2:
“The Final Statement shall set out the adjustments to the Contract Sum to be made in...
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