Dalkia Energy & Technical Services v Bell Group

JurisdictionEngland & Wales
JudgeMR JUSTICE COULSON
Judgment Date21 January 2009
Neutral Citation[2009] EWHC 73 (TCC)
Docket NumberCase No: HT-09–16
CourtQueen's Bench Division (Technology and Construction Court)
Date21 January 2009
Between
Dalkia Energy and Technical Services Limited
Claimant
Bell Group UK Limited
Defendant

[2009] EWHC 73 (TCC)

Before: Mr Justice Coulson

Case No: HT-09–16

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

St. Dunstan's House,

133–137 Fetter Lane,

London, EC4A 1HD

MR CALUM LAMONT (instructed by Anne-Marie Porisse, of the Claimant's Legal Dept) appeared for the Claimant

MR MICHAEL BLACK QC (instructed by Nabarro LLP) appeared for the Defendant

Hearing Dates: 19th and 20th January 2009

MR JUSTICE COULSON

MR JUSTICE COULSON:

A. BACKGROUND

1

This is a claim under CPR Part 8 arising out of an ongoing adjudication between the same parties. The claimant (“Dalkia”) seeks a variety of declarations against the defendant (“Bell”) relating to the terms of the contract agreed between the parties and the alleged lack of jurisdiction on the part of the adjudicator. Many of the points taken by Dalkia are unashamedly technical and devoid of any obvious merit, but that does not mean that they can be peremptorily dismissed. The courts have repeatedly made it clear that, because of the potentially draconian effects of the summary adjudication process, the parties are obliged to follow the proper procedure for appointing an adjudicator with the necessary jurisdiction to decide the dispute between them, and that failure to do so can be fatal to the validity of an entire adjudication.

2

It is agreed by the parties that, in May 2007, Dalkia subcontracted to Bell certain repair and painting works at 143 stations and 22 footbridges owned or controlled by Central Trains. The parties are agreed that this was a construction contract in writing, but they disagree over whether or not the Bell conditions of contract were incorporated into that contract.

3

In 2008 Bell sought payment of sums allegedly due under the contract, together with payment for variations. Having not received any further monies from Dalkia, they decided to commence adjudication proceedings. Following one false start, the second notice of intention to adjudicate (“the adjudication notice”) was dated 8 th December 2008 and delivered by post to Dalkia on 9 th December 2008.

4

The same day Bell sought a nomination of the adjudicator from the RICS. Their letter was received by the RICS on 10 th December. Mr Geoff Brewer was nominated on 11 th December and was appointed as the adjudicator on 15 th December. It is common ground that this nomination and appointment occurred by reference to Bell's standard terms and conditions. Both before and after the appointment of Mr Brewer, Dalkia took a number of points to the effect that the adjudicator did not have the necessary jurisdiction to determine the dispute. Some of those contentions are now no longer relied on. But Dalkia argued—and maintained in these proceedings—that either the Bell conditions were not incorporated into the contract, or, if they were, they did not comply with section 108 of the Housing Grants, Construction and Regeneration Act 1996 (“the 1996 Act”) and that, as a result, the Scheme for Construction Contracts applied instead. Dalkia submitted that in such circumstances the adjudicator, who had been appointed under the Bell standard terms and conditions, had no jurisdiction to determine the dispute.

5

On 18 th December the adjudicator decided that the Bell conditions were incorporated into the contract and that he did have the necessary jurisdiction. He reiterated this view in writing on 22 nd December 2008. On 14 th January 2009, having played no active part in the adjudication in the meantime, and having failed to serve a response on 9 th January in accordance with the adjudicator's order, Dalkia commenced these proceedings under CPR Part 8 seeking declarations that:

a) The Bell standard terms and conditions were not incorporated into the contract between the parties.

b) If they were, the Bell standard terms and conditions did not comply with section 108 of the 1996 Act, and so therefore the Scheme applied instead.

c) The adjudicator did not have the jurisdiction to decide the dispute referred to him, principally because:

i) He had been appointed under the Bell standard terms and conditions and not the Scheme;

ii) The approach to the RICS took place before the provision of the notice of adjudication to Dalkia;

iii) The notice of adjudication purported to refer more than one dispute to the adjudicator.

6

Dalkia's entitlement to these declarations is disputed, but, in addition to those points, Mr Black QC, on behalf of Bell, contends that this entire claim is unsuitable for CPR Part 8 and/or amounts to an abuse of the process. He also submits that the court has no jurisdiction to deal with the application. Obviously, given the threshold nature of these submissions, they are the most appropriate place to start. I deal with the suitability/abuse argument in Section B below and the arguments as to the court's jurisdiction in Section C below.

B. SUITABILITY/ABUSE OF THE PROCESS

B1 Suitability

7

Mr Black contends that this claim is unsuitable for CPR Part 8 because two matters of fact are in dispute which cannot be resolved without hearing oral evidence. The first issue concerns whether or not a document referring to Dalkia's terms and conditions was sent to Bell in April 2007 and the second relates to the provision of the notice of adjudication in early December 2008.

8

I accept that there is an issue, which cannot be resolved on paper, as to the provision or otherwise by Dalkia to Bell of their prequalification form in April 2007. Bell say they did not receive it until the beginning of May. However, that debate seems to me to be of very limited relevance to the contract issue, because Dalkia do not say that their terms and conditions (which were apparently sent out with the prequalification form) formed any part of the contract between the parties. Indeed, this document was never even referred to in any of the correspondence or emails which both parties agree make up the relevant contract in writing.

9

It is also right to say that, when theses Part 8 proceedings were commenced, Dalkia may not necessarily have known that this matter was going to be in issue at all. It seems to me that the TCC's procedure should be flexible enough to avoid the result that one, potentially unexpected, issue, in connection with what is an almost entirely irrelevant factual matter, should derail an otherwise valid Part 8 claim.

10

As to the issue relating to the service of the notice of adjudication, I am satisfied that, on analysis of the written material before me, there is, in truth, no dispute at all on the facts. It appears clear that the notice of adjudication was faxed to one of Dalkia's outlying offices on 8 th December 2008 and delivered by recorded delivery to the correct address on 9 th December, although it was not marked for the attention of Ms Maria Gonoude, the individual at Dalkia dealing with the dispute. The only issue is whether the date of delivery of the notice of adjudication should be taken to be 8 th or 9 th December, or, on Dalkia's primary case, 11 th December, which is when it was first seen by Ms Gonoude.

11

That issue (as explored in Section F3 of this judgment, paragraphs 85–87 below) would seem to me to be a matter of law. There is no dispute as to the underlying facts. It is therefore suitable for determination under CPR Part 8.

12

For those reasons, therefore, I do not accept Mr Black's contention that the dispute between the parties is unsuitable for CPR Part 8. More widely, it seems to me that the application is at least broadly in accordance with paragraph 9.4.1 of the TCC Guide, which sets out the TCC's jurisdiction to deal with proceedings arising out of ongoing adjudications, and the relevant guidance summarised in Vitpol Building Service v Samen [2008] EWHC 2283 (TCC).

B2 Abuse of Process

13

The abuse of process argument is more complicated, because it involves a consideration of the communications between the parties and the adjudicator during December 2008. However, it can be simply summarised. Bell say that, because of the delays on the part of Dalkia, and their repeated taking of points before the adjudicator—which were misleading or at the very least were so bad that they have now been abandoned—Dalkia are, as Mr Black neatly put it, “an unworthy recipient” of a discretionary remedy, such as the granting of the declarations currently sought. In support of that proposition Mr Black relies on the decision of Neuberger J (as he then was) in FSA v. Rourke (19 th October 2001, unreported).

14

The first notice of adjudication was dated 1 st December 2008 and sent out by Bell on 2 nd or 3 rd December. It suggested that a Mr Mackinnon should be appointed as the adjudicator, and enclosed his CV.

15

Dalkia did not respond to that notice until very late on 8 th December. They did not agree to the appointment of Mr Mackinnon because there was no information as to his fees. Amongst the other points they took was the suggestion that Bell had failed to serve the referral notice or appoint the adjudicator within seven days of the notice of adjudication. I am bound to say that that seems to me to be an extraordinarily bad point, since that delay was almost entirely due to Dalkia themselves.

16

In addition, they also took the points, both subsequently abandoned, that there was no contract in writing between the parties and that no dispute had yet crystallised. It is difficult not to conclude that, at least at that stage, Dalkia were prepared to take every possible point—whether good, bad or indifferent—in the hope of avoiding, or at least delaying, the adjudication...

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