Gary Paice and Another v Matthew J Harding (trading as MJ Harding Contractors)

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
JudgeFinola O'Farrell
Judgment Date05 August 2016
Neutral Citation[2016] EWHC B22 TCC
Docket NumberCase No: HT-2016-000166

[2016] EWHC B22 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Ms Finola O'Farrell QC

(Sitting as a Deputy High Court Judge)

Case No: HT-2016-000166

Between:
(1) Gary Paice

and

(2) Kim Springall
Claimants
and
Matthew J Harding (trading as MJ Harding Contractors)
Defendant

Mr David Sears QC and Mr Charles Pimlott (instructed by Silver Shemmings LLP) for the Claimants

Mr Piers Stansfield QC (instructed by Davies and Davies Associates Ltd) for the Defendant

Hearing date: 29 July 2016

Finola O'Farrell QC:

Introduction

1

This is an adjudication enforcement application by the claimants against the defendant pursuant to Part 24 of the Civil Procedure Rules to enforce the decision of Mr Christopher Linnett dated 27 April 2016, in which he directed the defendant to pay the claimants the sum of £296,006.44.

2

The defendant resists enforcement of the decision on the following grounds:

i) the adjudicator's decision was reached too late and therefore was a nullity;

ii) apparent bias on the part of the adjudicator;

iii) part of the decision was outside the adjudicator's jurisdiction.

Factual Background

3

On 25 March 2013 the claimants entered into a contract with the defendant, whereby the defendant agreed to construct and fit out two residential houses, together with related landscaping and access works, at a site in Purley, Surrey.

4

The contract incorporated the JCT Intermediate Building Contract, 2011 edition, as amended by the parties, and included at Article 7 and Clause 9.2 an adjudication agreement.

5

The work commenced in April 2013 but relations between the parties deteriorated and in September 2013 the works came to a standstill. Each party has purported to terminate the contract and there have been five adjudications in respect of the ensuing dispute.

6

The first adjudication concerned the defendant's claim for payment in respect of an interim application. In a decision dated 4 November 2013, Mr Sliwinski, the adjudicator, ordered the claimants to pay the defendant £8,252.72 in respect of that application.

7

The second adjudication concerned the defendant's claim for payment in respect of a further interim application. In a decision dated 28 November 2013, Mr Sliwinski ordered the claimants to pay the defendant £249,769.59 plus VAT and interest.

8

The third adjudication concerned the defendant's claim for payment in respect of its account following termination, submitted on 8 August 2014 under clause 8.12 of the contract. In a decision dated 6 October 2014, Mr Linnett, the adjudicator, ordered the claimants to pay the defendant £397,012.48 on the basis that the claimants had failed to serve a compliant pay less notice.

9

The fourth adjudication concerned the claimant's claim for determination of the proper value of the contract works and repayment of any balance due from the defendant. In a judgment dated 21 November 2014, Matthew Harding (t/a M J Harding Contractors) v Gary George Leslie Paice and Kim Springall [2014] EWHC 3824 (TCC), Edwards-Stuart J declined to grant an injunction to prevent the fourth adjudication from going ahead. That decision was upheld by the Court of Appeal in Matthew Harding (t/a M J Harding Contractors) v Paice & Another [2015] EWCA Civ 1231 (CA). In a decision dated 15 December 2014, Mr Sliwinski, the adjudicator, ordered the defendant to pay the claimants the sum of £325,484.00 together with his fees of £15,487.50.

10

In a judgment dated 10 March 2015, Gary Paice and Kim Springall v MJ Harding (t/a M J Harding Contractors) [2015] EWHC 661 (TCC), Coulson J declined to enforce the decision on the grounds of apparent bias.

11

On 8 January 2015 the defendant made a formal complaint to the RICS, the adjudication appointing body, in respect of Mr Sliwinski's acceptance of the appointment and conduct in the fourth adjudication. An investigation was carried out by the RICS and the Head of Regulation was satisfied that there was a reasonable prospect of establishing that Mr Sliwinski was liable for disciplinary action in failing to make appropriate checks to ascertain whether there had been unilateral contact by either party and in failing to disclose that there had been such contact. The disciplinary hearing was disposed of by a confidential consent order in December 2015.

12

The fifth adjudication concerned the same issue as the fourth adjudication, namely the claimant's claim for determination of the proper value of the contract works and repayment of any balance due from the defendant. In a decision dated 27 April 2016, Mr Linnett, the adjudicator, ordered the defendant to pay the claimants the sum of £296,006.44 by way of repayment of sums overpaid in respect of the works. It is the fifth adjudication that the claimants seek to enforce by this application.

Late Decision

13

The issue is whether the defendant agreed to an extension of time for the adjudicator to reach his decision or whether there was no such agreement and the decision was late.

Relevant Law

14

Clause 9.2 of the contract provides that the Scheme for Construction Contracts applies to adjudications between the parties (subject to specific amendments by the parties).

15

Paragraph 19(1) of the Scheme provides that:

"The adjudicator shall reach his decision not later than –

(a) twenty eight days after receipt of the referral notice …

(b) forty two days after receipt of the referral notice if the referring party so consents, or

(c) such period exceeding twenty eight days after receipt of the referral notice as the parties to the dispute may, after the giving of that notice, agree."

16

If the adjudicator fails to reach his decision within the prescribed time, or as agreed by the parties, it is invalid and unenforceable: Cubitt Building & Interiors Ltd v Fleetglade Ltd [2006] EWHC 3413 (TCC) per Coulson J at para.76.

17

If an adjudicator requests an extension of time for his decision, it is incumbent on the parties to respond plainly and promptly to such request; failure to do so may give rise to an estoppel precluding a party from subsequently disputing that the extension of time was agreed: AC Yule & Son Ltd v Speedwell Roofing & Cladding Ltd [2007] EWHC 1360 (TCC) per Coulson J at paras.15–20.

The Relevant Facts

18

On 8 March 2016 Mr Linnett notified the parties that he had been nominated as adjudicator in respect of the fifth adjudication.

19

By emails dated 8 March 2016 and 14 March 2016 respectively Mr Davies, on behalf of the defendant, made a general reservation in respect of the defendant's rights as regards its participation in the adjudication and the jurisdiction of the adjudicator.

20

On 10 March 2016 the Referral was received by Mr Linnett, and therefore the date for his decision was 9 April 2016 in accordance with paragraph 19(1)(a) of the Scheme.

21

On 24 March 2016 the defendant served its Response, in which it asserted that the adjudicator did not have jurisdiction because the claimants had attempted to refer the dispute to adjudication under the wrong procedural rules (see paragraphs 12–23 and 59–61). However, the defendant requested the adjudicator to act on a different basis and undertake an assessment of the account as between the parties (see paragraphs 11 and 61).

22

By letter dated 29 March 2016 the adjudicator noted the defendant's request for him to carry out an assessment of the account and requested the claimants to confirm (a) whether they agreed to a non-binding expert determination or (b) whether they maintained that the adjudicator had jurisdiction to continue the adjudication. In response Mr Silver, on behalf of the claimants, confirmed that they maintained that the adjudicator had jurisdiction to act as adjudicator, following which the adjudicator stated that he would continue to act as adjudicator and not as an expert.

23

It is common ground that the time for the adjudicator's decision was extended by the claimants to 21 April 2016 in accordance with paragraph 19(1)(b) of the Scheme.

24

Following service of the Reply on 4 April 2016, the adjudicator indicated that it would be helpful for the parties to attend a meeting before him and the meeting was fixed for 20 April 2016.

25

On 9 April 2016 the adjudicator stated that he would not be able to issue his decision one day after the meeting and requested the parties to let him know whether they agreed to allow an extension of time of one week following the meeting i.e. to 27 April 2016.

26

By email dated 9 April 2016 the claimants agreed to the extension.

27

On 11 April 2016 Mr Davies responded on behalf of the defendant:

"…Without prejudice to Mr Harding's position and pursuant to Mr Harding's Response document of 24 March 2016, Mr Harding agrees you may have a further week to undertake your non-binding determination, but given that Mr Harding denies that a valid adjudication under the contractual adjudication mechanism is presently proceeding he is unable to agree to an extension to that which he maintains does not exist…"

28

There was then a flurry of emails between the parties in which the parties' representatives disagreed as to what had been agreed. This was followed by the adjudicator's letter dated 12 April 2016:

"… I find the exchange extraordinary and unnecessary. In an email at 08:53 hours yesterday, 11 April 2016, Davies & Davies stated that 'Mr Harding agrees you may have a further week.' This agreement was given subject to Mr Harding's on-going reservation about my jurisdiction, but that was to be expected.

I confirm that my Decision shall be issued on or before Wednesday 27 April 2016 and I see no objection to this, beyond Mr Harding's general objection as to my jurisdiction to act in this matter."

29

It is common ground that at the meeting held on...

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