Corebuild Ltd v Mr Tom Cleaver and Another
| Jurisdiction | England & Wales |
| Judge | Mr Adam Constable |
| Judgment Date | 07 August 2019 |
| Neutral Citation | [2019] EWHC 2170 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2019-000073 |
| Date | 07 August 2019 |
[2019] EWHC 2170 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
7 Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Adam Constable QC
Case No: HT-2019-000073
Hearing date: 25 July 2019
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.
Mr Adam Constable QC (SITTING AS A DEPUTY HIGH COURT JUDGE)
Mr Adam Constable QC:
Introduction
This is an application for summary judgment by the Claimant, Corebuild Limited, to enforce an adjudication award dated 12 November 2018 in which the Defendants, Mr Tom Cleaver and Ms Hanna Osmolska, were ordered to pay £80,023.82, it having been determined that the Defendants had sought wrongly to terminate the contract, and were thereby in repudiatory breach. All of the sums awarded depended upon the finding of repudiation. As well as resisting the claim for summary judgment, the Defendants contend in the alternative that the financial position of the Claimant is such that there is a compelling reason not to give summary judgment, or that a stay of execution should be ordered.
Mr Hennesy represented himself at the hearing of the application, and Mr Cleaver represented the Defendants. Whilst it is irrelevant to the substance of the application, it is noted that Mr Cleaver is a practising barrister and, as Mr Hennesy courteously acknowledged, the efficiency of the application has been assisted by the Defendants' preparation of bundles containing all the relevant materials and authorities in a sensible format.
The proceedings were commenced on 5 th March 2019. By Order of Mr Justice Fraser on 13 March 2019, the Claimant was required, as is usual, to serve as soon as practicable upon the Defendants the Claim Form, a response pack and any statement relied upon. The Defendants were required to provide evidence on 15 April 2019, and any further evidence by the Claimant was to be served on 22 April. There was to be a hearing on 7 May 2019. A copy of the Claim Form, Response Pack and statement was not served on the Defendants until 25 March 2019, and a sealed copy was not served on the Defendants until 15 April 2019, the date upon which the responsive evidence was to be served. On 1 and 15 April 2019, the Defendants suggested a variation to the timetable, but on 16 April 2019, Mr Hennesy served a short witness statement saying that the time for filing evidence had expired and the matter should proceed to hearing in the absence of such evidence on 7 May. An application was made by the Defendants to extend the timetable on 25 April 2019; this application was heard on 7 May 2019 when, without prior notice or explanation to the Defendants or the Court, Mr Hennesy did not appear at all. On that date, the dates for the service of evidence from the Defendants and responsive evidence from the Claimant were varied to 27 May and 4 June respectively, and the latter was extended again until 12 July 2019. Mr Cleaver served evidence raising numerous specific concerns about the Claimant's financial viability. However, no further evidence was served by the Claimant in answer to Mr Cleaver's evidence. On 22 July 2019, Mr Hennesy informed the Court by email that he would not be able to attend the hearing listed for 25 July 2019, as he was due to be at a wedding. Mr Cleaver's skeleton argument was then predicated on the basis that Mr Hennesy would not be attending the hearing. On the eve of the hearing, Mr Hennesy did then provide a written response to the skeleton argument submitted by Mr Cleaver, and indeed attended the application hearing and represented himself in person. Notwithstanding the potential difficulties with proceeding in these circumstances which were foreshadowed by Mr Cleaver's skeleton, neither party objected to proceeding to hear the application substantively on 25 July 2019.
Background
The parties entered into a contract on 7 August 2018 to design and construct a single story rear extension, internal modifications and internal and external refurbishment works to a residential property in London, SE4 (‘the Contract’). The Contract was in the form of a JCT Intermediate Form with Contractor's Design 2016. On 22 nd June 2018, the Architect and Contract Administrator, Mr Griffies, sent a letter advising that he considered the Claimant to be in default under Clause 8.4.2 for failing to proceed regularly and diligently with the Works, and that if the Claimant were to continue with that default for 14 days from the date of the letter then the Defendants may exercise their right to terminate the Claimant's employment. Mr Griffies said that he would monitor the progress on site over the following 14 days against various specified items to assess whether or not the default continued. Mr Hennesy responded on 3 July 2018, and this letter was in turn responded to on 5 July. On 11 July, Mr Griffies indicated by email that the previous specified default previously notified had continued over a 14 day period, and on 13 July the Defendants terminated the contract.
A Notice of Adjudication was served on 5 September 2018, and Mr Paul Jensen appointed as Adjudicator. The Referral was accompanied by a witness statement from Mr Hennesy. A lengthy response, running to over 117 pages, together with witness statements from Mr Griffies and the Employer's QS, was served by the Defendants. This Response was accompanied by 1500 pages of exhibited correspondence and documentation. The Claimant's Reply was accompanied by a witness statement from Mr Hennesy running to over 70 pages, and a Rejoinder and Surrejoinder followed.
The Defendants' Grounds
The grounds upon which the Defendants seek to resist summary judgment are:
i) the Adjudicator answered the wrong question in relation to contractual termination, with the result that he failed to address the Defendant's actual case;
ii) the Adjudicator then had no regard at all to any of the evidence going to the progress of the works;
iii) the Adjudicator rejected the Defendants' submission as to whether wrongful termination was repudiatory on the basis of a point which was unargued and which the Defendants had no opportunity to address;
iv) the Adjudicator proceeded to determine an extremely complicated quantum case notwithstanding the huge amount of new material required to be dealt with, so that the Adjudicator was considering a dispute which had not crystallised and/or one which the Defendants did not have a fair opportunity to deal with.
Grounds 1 and 2
The Law
It is now well established that an adjudicator can make an inadvertent error when answering a question put to him, and that mistake will not ordinarily affect the enforcement of his decision ( Bouygues (UK) Ltd v Dahl Jensen (UK) Ltd (1999) 70 Con LR). Where, however, an adjudicator takes an erroneously restrictive view of his own jurisdiction, with the result that he decides not to consider an important element of the dispute that has been referred to him, this failure may be regarded as a breach of natural justice. In Pilon Ltd v Breyer Group plc [2010] 130 Con LR 90, Coulson J, as he then was, summarised the law on this category of natural justice challenges, as follows:
“22.1 The adjudicator must attempt to answer the question referred to him. The question may consist of a number of separate sub-issues. If the adjudicator has endeavoured generally to address those issues in order to answer the question then, whether right or wrong, his decision is enforceable […]
22.2 If the adjudicator fails to address the question referred to him because he has taken an erroneously restrictive view of his jurisdiction (and has, for example, failed even to consider the defence to the claim or some fundamental element of it), then that may make his decision unenforceable, either on grounds of jurisdiction or natural justice. […]
22.3 However, for that result to obtain, the adjudicator's failure must be deliberate. If there has simply been an inadvertent failure to consider one of a number of issues embraced by the single dispute that the adjudicator has to decide, then such a failure will not ordinarily render the decision unenforceable: see Bouygues and Amec v TWUL. […]
22.4 It goes without saying that any such failure must also be material. […] In other words, the error must be shown to have had a potentially significant effect on the overall result of the adjudication: see Keir Regional Ltd v City and General (Holborn) Ltd [2006] EWHC 848 (TCC).
22.5 A factor which may be relevant to the court's consideration of this topic in any given case is whether or not the claiming party has brought about the adjudicator's error by a misguided attempt to seek a tactical advantage. […]”
In that case, the Court then added that under section 68 of the Arbitration Act 1996, a party alleging serious irregularity because an arbitrator failed to have regard to a particular issue has an ‘ uphill task’ and that the argument cannot be any easier in the context of adjudication.
Analysis
At the heart of the adjudication was (i) the liability question of whether the Defendants were in repudiatory breach of contract when terminating the Contract; and (ii) to the extent that the Claimant established liability, what loss flowed. There is no doubt that, put this broadly, the Adjudicator attempted to answer these questions, albeit he did so, in the Defendant's submission, wrongly. The liability question then obviously breaks down into sub-issues:
i) Did the Defendants terminate lawfully by letter dated 13 July 2018?
ii) If not, was that wrongful termination repudiatory?
The Adjudicator also addressed his mind to these sub-issues. The manner in which he...
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