Deluxe Art & Theme Ltd v Beck Interiors Ltd
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Coulson |
| Judgment Date | 12 February 2016 |
| Neutral Citation | [2016] EWHC 238 (TCC) |
| Docket Number | Case No: HT-2015-000436 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 12 February 2016 |
[2016] EWHC 238 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
The Rolls Building, Fetter Lane,
London, EC4A 1NL.
The Hon Mr Justice Coulson
Case No: HT-2015-000436
Mr Rupert Choat (instructed by TLT LLP) for the Claimant
Ms Brenna Conroy (instructed by Rosenblatts) for the Defendant
Hearing date: 4 February 2016
INTRODUCTION
The claimant ("DATL") seeks by way of summary judgment to enforce two decisions of the well-known adjudicator, Mr Matthew Bastone. The enforcement application is resisted by the defendant ("Beck"). At the heart of the application is a dispute about whether, pursuant to paragraph 8(1) of the Scheme for Construction Contracts, an adjudicator has the jurisdiction, without the consent of all parties, to adjudicate at the same time on more than one dispute.
I should say at the outset that I am extremely grateful to both counsel who dealt clearly and concisely with the issues. As practitioners experienced in this sort of work, I know they will have shared my consternation that a relatively simple enforcement dispute was the subject of no less than six full lever arch files. Four of these files were never referred to. It is exceedingly rare that any adjudication enforcement dispute requires more than one lever arch file of documents. The time is fast approaching when, unless the parties and their solicitors cooperate properly and comply with the TCC Guide, the court will simply refuse to hear cases with such promiscuous and unnecessary bundling.
THE RELEVANT FACTS
On 7 March 2014, Beck engaged DATL as a sub-contractor to supply and install joinery items in the Lanesborough Hotel at Hyde Park Corner, London. Beck were refurbishing the hotel as the main contractor.
There have been a total of three adjudications between the parties, each started by DATL and resisted by Beck. In Adjudication 1, by a decision dated 10 July 2015, the adjudicator awarded DATL the sum of £72,888.95 plus VAT and interest for variations and acceleration costs. That sum was paid by Beck.
DATL started Adjudication 2 on 22 October 2015. The dispute that was referred was said in the notice to concern "the further extension of time due to [DATL] and the amount of loss and/or damage to be reimbursed by [Beck] to [DATL] as a consequence of the prolongation of the execution of the Sub-Contract Works on site."
By a decision in Adjudication 2 dated 4 December 2015, the same adjudicator awarded DATL the sum of £120,559.56 plus VAT and interest. He also decided that DATL were entitled to an extension of time up to 30 June 2015.
On 9 November 2015, during the currency of Adjudication 2, DATL started Adjudication 3. In consequence of their policy of appointing the same adjudicator to deal with disputes under the same contract, the RICS again appointed Mr Bastone. The dispute that was referred in Adjudication 3 was said to concern "the failure of [Beck] to reduce the rate of retention from 5% to 2.5% upon practical completion of the sub-contract works."
In a letter dated 24 November 2015, Beck objected to the adjudicator dealing with two disputes at the same time. It is not suggested that this objection was made too late or that the delay in making the objection amounted to a waiver of the jurisdictional challenge or an acceptance by Beck of the adjudicator's jurisdiction in Adjudication 3.
By a decision in Adjudication 3, dated 11 December 2015, the adjudicator awarded DATL the sum of £38,491.64 plus VAT and interest by reference to retention.
IS THERE A SINGLE DISPUTE BETWEEN THE PARTIES OR ARE THERE TWO DISPUTES, AND DOES IT MATTER?
One or Two Disputes?
The first issue to decide is whether or not Adjudications 2 and 3 encompassed a single dispute between the parties, or whether in fact they encompassed two separate disputes. Although the point was raised towards the end of Mr Choat's skeleton argument on behalf of DATL, it seems to me that, logically, this issue needs to be addressed first. If I concluded that DALT were right and there was only one dispute between the parties, then Ms Conroy's objection to the adjudicator dealing with two disputes at the same time would of necessity fall away.
I am in no doubt that there were two separate disputes in this case. There are a number of reasons for that.
First, it is plain that DATL themselves considered that there were two disputes. It was for that reason that they commenced Adjudication 3 on 9 November 2015. If the dispute about retention monies was already included within Adjudication 2, there would have been no need for DATL to issue the fresh notice in Adjudication 3.
Secondly, the adjudicator ruled at the outset that these were, to all intents and purposes, different disputes. In his letter dated 11 November 2015, which was subsequently incorporated into his decision in Adjudication 3, Mr Bastone described this dispute as concerning "an alleged failure on the part of Beck to reduce the retention percentage from 5% to 2.5%" at practical completion. He went on to say, in respect of any possible challenge by Beck to his jurisdiction in Adjudication 3:
"…it seems to me that this is an entirely different question to that of whether an amount due in respect of loss and expense applied for an interim application for payment, should be subject to deduction of retention."
Accordingly, any attempt by DATL now to argue that the adjudicator was wrong to reach this conclusion may fall foul of the law of election, because it may amount to an attempt both to approbate and reprobate the adjudicator's decision. That is not permitted on an adjudication enforcement: see Wales and West Utilities Ltd v PPS Pipeline Systems GmbH [2014] EWHC 54 (TCC); [2014] BLR 163. The adjudicator's conclusion that this was a separate dispute was an important element of his reasoning in respect of Adjudication 2, a decision on which DATL now seek to rely. In my view, therefore, they cannot at the same time seek to ignore the adjudicator's conclusion that these were separate disputes.
Thirdly, I consider that, on an application of well-known principles, the dispute about extensions of time and loss and expense was a different dispute to the dispute about retention. Mr Choat sought to argue, by reference to the decision of Akenhead J in Witney Town Council v Beam Construction (Cheltenham) Ltd [2011] EWHC 2332 (TCC); [2011] BLR 707, that, on an application of the principles set out in this case, the delay claim and the retention claim were both part of the same dispute because they both related to what was due on 30 June 2015, the date of practical completion. But in my view, the proper application of Akenhead J's principles, referred to at paragraph 38 of his judgment in Witney Town, leads to the opposite conclusion.
Akenhead J said that: "A useful if not invariable rule of thumb is that, if disputed claim No 1 cannot be decided without deciding all or parts of disputed claim No 2, that establishes such a clear link and points to there being only one dispute." In this case, DATL's claim for an extension of time and loss and expense, as noted in paragraph 5 above, could easily be decided without any reference to the claim for the failure to reduce retention (as noted in paragraph 7 above), which was a separate and stand-alone claim. Indeed, at one point Mr Choat appeared to accept that, when he submitted that, in order to reach his decision in Adjudication 2, "the adjudicator did not need to decide decision 3". I respectfully agree. That demonstrates that these were not part of the same dispute.
There is nothing in Mr Choat's argument that both claims related to what was due on 30 June 2015. That date is not identified in either of the relevant notices of adjudication. Moreover, the relevant date for Adjudication 2 was the date of the critical application for an interim payment (see Section 5 below); the relevant date for Adjudication 3 was the date of practical completion.
Finally, it should be noted that there is no authority to support the proposition that two different disputes, deliberately raised by the claiming party in two separate adjudication notices, and described in very different terms, could still somehow be part of the same dispute. All of the authorities about the reference of more than one dispute, which culminate in Witney Town, were cases where there was one notice of adjudication, and the outcome depended on the nature of the issues that had been referred to the adjudicator under that single notice. Thus, whilst I accept that the mere fact that there were two notices may not necessarily be determinative, it might be thought that it would take a very unusual set of circumstances to conclude that the disputes referred to in the adjudication notices, started at different times, both formed part of the same dispute.
For all these reasons, I therefore conclude that there were two disputes between the parties, and those disputes were the subject respectively of Adjudications 2 and 3.
Does it Matter?
In my view, this finding does matter. That is because the weight of the adjudication authorities is that an adjudicator only has the jurisdiction to deal with a single dispute at any one time. That was what the Court of Appeal said when refusing permission to appeal in David and Theresa Bothma v Mayhaven Healthcare Ltd [2007] EWCA Civ. 527; [2007] 114 Con LR 131. That was also the view of Akenhead J in Witney Town,...
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