Dawnus Construction Holdings Ltd v Marsh Life Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge McKenna |
| Judgment Date | 11 May 2017 |
| Neutral Citation | [2017] EWHC 1066 (TCC) |
| Docket Number | Case No: HT-2017-000063 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 11 May 2017 |
[2017] EWHC 1066 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge McKenna
Case No: HT-2017-000063
Crispin Winser (instructed by Douglas-Jones Mercer Solicitors) for the Claimant
Michael Curtis QC (instructed by Silver Shemmings LLP) for the Defendant
Hearing date: 4th May 2017
Judgment Approved
Introduction
This is an application dated 10 th March 2017 by the Claimant, Dawnus Construction Holdings Limited, for summary judgment for the enforcement of an adjudication decision given by Mr Peter Collie, a barrister practising from 3 Paper Buildings ("the Adjudicator"), on 6 th March 2017 (revised on 9 th March 2017) ("the Decision") in which the Adjudicator directed the Defendant, Marsh Life Limited, to pay the Claimant the total sum of £1,038,018.30 plus VAT. The Adjudicator also directed the Defendant to pay his fees and expenses in the sum of £43,597.00 plus VAT.
The Defendant has failed to pay the sum ordered either to the Claimant or indeed to the Adjudicator and the Claimant claims the contractual sum awarded together with ongoing interest. The total amount due as at the date of the hearing is £1,249,674.50 (inclusive of VAT and interest).
The Claimant's application is supported by two witness statements filed by Philip Graham, the Claimant's solicitor, dated respectively 10 th March and 21 st April 2017. The Defendant for its part relies on a witness statement dated 13 th April 2017 from William James Marsh, a director of the Defendant company.
At the hearing, the Defendant sought to defend the application on the grounds of a failure by the Adjudicator to apply the rules of natural justice as a result of an alleged failure to consider and deal with defences put forward by the Defendant in what has been described as the SSE Cable and Winter Works loss and expenses claims, leading counsel for the Defendant having abandoned all but those arguments from the plethora of criticisms of the Decision made by Mr Marsh in an unnecessarily long and discursive statement.
The Claimant for its part took an initial point and submitted that the court did not need to deal with the merits of the breaches of natural justice challenge because of the existence of a threshold defence to the Defendant's challenge in the light of an invitation by the Defendant to the Adjudicator to revise his Decision on various grounds, including the alleged breaches of natural justice. In short, by inviting the Adjudicator to correct errors in the Decision under the slip rule it was said that the Defendant was accepting the validity of the Decision and thereby electing to forego any opportunity it might otherwise have had to challenge the decision, there having been no general reservation of rights.
That raised an important point of principle and, for that reason, having informed the parties that I would enter summary judgment for the Claimant, I reserved judgment.
Factual background
The Defendant is a special purpose vehicle which was set up to develop a site known as the Lifeboat Quay in Poole. By a JCT 2011 Design & Build Contract dated 25 th July 2014 ("the Contract") the Defendant engaged the Claimant to design and build a hotel together with retail and restaurant units on the site ("the Project"). The Contract price was approximately £6.9 million. The works started in September 2014 and the original completion date was 13 th July 2015.
The Project suffered from various delays including, for the purposes of this application, the discovery of an incorrectly placed electricity cable belonging to SSE which led to the imposition of an exclusion zone over part of the site and impeded the progress that the Claimant was able to make until the cable had been re-routed. The delays caused by the SSE Cable issue pushed weather sensitive works into the winter which caused further delays.
In November 2016, by which stage the Project was effectively complete and a number of commercial tenants had moved in, the Contract was terminated in disputed circumstances.
Various disputes have arisen between the parties and there have been a total of four adjudications, the fourth of which, a referral, it is to be noted, by the Defendant to the Adjudicator, sought a valuation of the account upon termination and is the one with which this court is concerned.
It is fair to say that Mr Marsh's statement is long and detailed and as counsel for the Claimant submitted, strays well beyond the proper ambit of a statement in opposition to a claim for the enforcement of an adjudication decision. The thrust of Mr Marsh's evidence is that he is aggrieved by the substance of the Adjudicator's decision. However, as I have indicated, by the time of the hearing of the Claimant's application, the ambit of the Defendant's attack on the Adjudicator's decision had been focused much more narrowly to the SSE Cable and Winter Working loss and expense claims.
The Adjudicator issued his Decision on 6 th March 2017 following which both parties made submissions to him inviting him to correct alleged errors in the Decision. On 7 th March 2017 the Claimant invited the Adjudicator to correct a mathematical error which had the effect of increasing the net sum payable to the Claimant, whilst on 8 th March 2017 the Defendant invited the Adjudicator to revise his Decision based on various matters, including the alleged breaches of natural justice, which form the subject matter of their opposition to the application for summary judgment. In his email of 8 th March 2017, after quoting paragraphs 96.1, 96.2, 96.5 and 96.7 of the Decision (reproduced below) Mr Silver (the Defendant's solicitor) wrote as follows:
"This we believe to be a slip. At no time did Marsh Life argue that Dawnus was not entitled to an extension of time. As in the Referral, within its Reply Marsh Life maintained that Dawnus was entitled to an extension of time for the SSE Delay Event, and that this was a relevant event being the carrying out by a Statutory Undertaker of Work Pursuance of its Statutory Obligations in relation to the Works. Marsh life argued, however, that there was no relevant matter entitling the recovery of loss and expense for such an event. Further, it was Dawnus who argued that the event was not a delay associated with the carrying out by a Statutory Undertaker of Work Pursuance of its Statutory Obligations in relation to the Works no doubt recognising that such event was not a relevant matter."
Similar comments apply to Delay Event 3 Winter Working Effect in that Marsh Life maintained that this was a relevant event being the carrying out by a Statutory Undertaker of Work Pursuance of its Statutory Obligations in relation to the Works.
In that you decided in favour of Marsh Life at paragraph 96.7 and that both the Delay Event 2 and Delay Event 3 were the carrying out by a Statutory Undertaker of Work Pursuance of its Statutory Obligations in relation to the Works we believe you have made slips in including sums for loss and expense in the Scott schedule whereas you had intended to include nil monies against both.
Further you have allowed for the recovery of O/H and Profit for such period whereas again we believe you intended to include nil monies for such periods.
We, therefore, ask that you correct these slips."
On 9 th March 2017 the Adjudicator produced a revised decision correcting the mathematical error and increasing the net sum payable to the Claimant from £972,050.30 to £1,038,018.30. At the same time he rejected the points raised by the Defendant.
Approbation/Reprobation
The doctrine of election prevents a party from "approbating and reprobating" or "blowing hot and cold" in relation to an adjudicator's award. The point was made by Dyson J, as he then was, in Macob Civil Engineering Limited v Morrison Construction Limited (1999) BLR 93 at 99 as follows:
"What the defendant could not do was to assert that the decision was a decision for the purposes of being the subject of a reference to arbitration but was not a decision for the purposes of being binding and enforceable pending any revision by the arbitrator…once the defendant elected to treat the decision as one being capable of being referred to arbitration, he was bound also to treat it as a decision which was binding and enforceable unless revised by the arbitrator."
In Shimizu Europe Limited v Automajor Limited [2002] BLR 113, albeit obiter, HHJ Richard Seymour QC said as follows:
"26. Although it is not strictly necessary to do so in the light of the conclusions which I have already expressed, I should like to comment on the alternative case put forward by Mr. Constable, that even if Mr. Haller had exceeded his jurisdiction in making the Award, any right which there would otherwise have been to raise objection on behalf of Automajor had been waived by making part payment of the sum awarded by Mr Haller and/or by inviting him to correct the Award…"
29. In my judgment it cannot be right that it is open to a party to an adjudication simultaneously to approbate and to reprobate a decision of the adjudicator. Assuming that good grounds exist on which a decision may be subject to objection, either the whole of the relevant decision must be accepted or the whole of it must be contested. It may, of course, be important correctly to characterise what constitutes a decision of the adjudicator. It is likely that, to be relevant for the purposes now under consideration, a decision will be the answer to a question referred to the adjudicator, rather than a conclusion reached on the way to providing such an answer…
30. In the present case Mr. Haller's...
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