Enterprise Managed Services Ltd v Tony Mcfadden Utilities Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 23 June 2010 |
| Neutral Citation | [2010] EWHC 1506 (TCC) |
| Docket Number | Case No: HT-09425 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 23 June 2010 |
[2010] EWHC 1506 (TCC)
Before: The Honourable Mr Justice Akenhead
Case No: HT-09425
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Camille Slow (instructed by HBJ Gateley Wareing LLP) for the Claimant
Mark Chennells (instructed by Mishcon de Reya) for the Defendant
Hearing dates: 16 June 2010
Mr Justice Akenhead:
Introduction
Following the judgement of Mr Justice Coulson on 2 December 2009 which disposed of the substantive matters in dispute between the parties, the parties have made written submissions on costs arising out of the claim and the hearing, which I have been asked to deal with in Mr Justice Coulson's absence.
The details are set out in the learned judge's judgement and I will not repeat them. In summary, in 1998 TWUL employed Subterra who in turn in 2002 sub-contracted (pursuant to the “NLSDA Sub-Contract”) some of the work to Tony McFadden Ltd (“TML”). Enterprise acquired the business of Subterra in 2003. There was a Deed of Novation as between Enterprise and TWUL. Enterprise made various payments to TML but, following a termination of its agreement by TWUL, Enterprise purported to terminate its “Sub-Contract Agreement” in April 2004. Enterprise engaged TML on three other contracts, “Lot 8”, “Three Valleys” and the “Van Hire” Sub-Contracts. In May 2006 TML went into administration and later into liquidation in 2007. TML's liquidators served various claims in relation to sums said to be due under these Sub-Contracts in 2008. In June 2009, the liquidators purported to assign to the Defendant, Tony McFadden Utilities Ltd (“TMUL”) what was said to “the ‘Net EMSL Balance’, defined by reference to “the sum due to TML from Enterprise upon the taking of accounts of what was due from each party to the other in respect of the mutual dealings between TML and Enterprise pursuant to Rule 4.90 of the Insolvency Rules 1986”.
Thereafter, on 21 September 2009, TMUL gave notice of assignment and started an adjudication process by simultaneously serving a notice of intention to adjudicate. The adjudication, relating to the NLSDA Sub-Contract, started on 24 September 2009. The Referral on that date included, for the first time, a copy of the Deed of Assignment. Piecemeal extensions were granted or agreed to enable the adjudicator to issue his decision by 23 December 2009. Enterprise reserved its position as the jurisdiction of the adjudicator.
Having sought to persuade TMUL to delay the adjudication proceedings, Enterprise issued Part 8 proceedings in the TCC on 27 October 2009. It is clear that the court proceedings were brought not only in the context of the adjudication but also with a view to establishing that the adjudicator had no jurisdiction.
Mr Justice Coulson set out at Paragraph 16 of his judgement the issues which he was required to address:
“(a) Was the NLSDA Sub-Contract between Subterra and TML novated in favour of Enterprise?
(b) What rights and liabilities were the subject of the Deed of Assignment of 15 th June 2009 between TML and Utilities?
(c) Was the Deed a valid assignment?
(d) Can Utilities as assignees adjudicate the NLSDA claim against Enterprise?
(e) Does the Adjudicator have the necessary jurisdiction to undertake this adjudication?”
On the first two of these issues, the learned judge decided in favour of TMUL in that he found that the NLSDA Sub-Contract was novated and that it was the net balance envisaged by Rule 4.90 of the Insolvency Rules which was assigned to TMUL by the liquidators of TML. Delete “However, on the three remaining issues, he effectively” and replace it with “On the third issue, he decided that whilst the right to an account and any payment arising on that account under Rule 4.90 of the Insolvency Rules had been validly assigned, none of the sub-contracts nor the right to make claims under or for breach of them had been assigned. On the two remaining issues, he”
By way of explanation of this suggested amendment: it was not TMUL's case that the NLSDA Sub-Contract (or any of the other contracts between the parties) had been assigned. However, on the three remaining issues, he effectively decided in favour of Enterprise in that the NLSDA Sub-Contract itself, or the right to make a claim either under or for breach of that Sub-Contract or any of the other three sub-contracts, had not effectively been assigned by TML to Utilities, that Utilities could not adjudicate the claim under the NLSDA Sub-Contract and that no dispute had crystallised in any event such as would enable the adjudicator to have had jurisdiction. At Paragraph 99, Mr Justice Coulson was critical about the course of the adjudication:
“In my judgment, the adjudicator ought to have taken more of a grip on this adjudication at the start, and reached early views both as to jurisdiction and as to whether it could be dealt with fairly in the time period. Had he done so, I think it likely that for one, or maybe even both, of these reasons he would have concluded that the adjudication could not be properly or fairly progressed and that the right course was resignation. That would have obviously saved a good deal of time and money, not least the costs of these Part 8 proceedings which, as I understand it, are now put at the barely credible figure of £240,000. The fact that, as a matter of practicality and fairness, this claim was not...
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...winner to recover not only the costs specific to the issues which he has won but also the common costs." 7 In Enterprise Managed Services Ltd v Tony McFadden Utilities Ltd [2010] EWHC 1506 (TCC), Akenhead J said at [10]: "A number of general observations can properly be made in the context......
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Table of cases
...Ltd v East Midland Contracting Ltd [2008] EWhC B3 (TCC) I.5.120, I.5.125 Enterprise Managed Services Ltd v McFadden Utilities Ltd [2010] EWhC 1506 (TCC) III.26.262 Enterprise Managed Services Ltd v Tony McFadden Utilities Ltd [2010] BLr 89 (TCC) II.6.78, II.6.419, III.20.81, III.24.07, III.......
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Litigation
...Cleveland Bridge UK Ltd (2008) 122 Con LR 88 at 105–106 [72], per Jackson J; Enterprise Managed Services Ltd v McFadden Utilities Ltd [2010] EWHC 1506 (TCC); BSkyB Ltd v HP Enterprise Services UK Ltd (No 2) (2010) 131 Con LR 42 at 46 [6]–47 [13], per Ramsey J; Fox v Foundation Piling Ltd [2......