Glendalough Associated SA v Harris Calnan Construction Company Ltd
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Edwards-Stuart |
| Judgment Date | 21 October 2013 |
| Neutral Citation | [2013] EWHC 3142 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 21 October 2013 |
| Docket Number | Case No: HT-13-367 |
[2013] EWHC 3142 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
London EC4A 1NL
Mr Justice Edwards-Stuart
Case No: HT-13-367
Miss Anneliese Day QC (instructed by Stephenson Harwood LLP) for the Claimant
Miss Anna Laney (instructed by Silver Shemmings LLP) for the Defendant
Hearing Dates: 14 th October 2013
Introduction
This is an application which arises out of the adjudication between the Defendant ("HCL") and the Claimant ("Glendalough") by which HCL claims that Glendalough is not entitled to deduct liquidated damages for delay in the performance of a contract by which HCL was engaged to build a residential development and B1 studios in North London. The application is by Glendalough and is for:
i) A declaration that the adjudicator has no jurisdiction in relation to the adjudication purportedly referred on 23 August 2013 and must resign.
ii) Further or alternatively, an injunction restraining HCL from continuing with the adjudication.
iii) Further or in the further alternative, a declaration that any decision reached by the adjudicator is a nullity and unenforceable.
The story in brief is this. In September 2009 Glendalough put the works out to tender. HCL submitted a tender, which was subsequently revised, and by a letter dated 24 February 2010 Glendalough instructed HCL to proceed with the works pending agreement of a formal contract based the "JCT 2005 Intermediate Form of Contract with Contractor's Design".
It seems that no formal contract was ever entered into and HCL carried out and completed the works under, it now claims, the terms of the letter of intent. However, the work took longer than anticipated and Glendalough asserts that it is entitled to deduct liquidated damages for the delay. On 1 July 2013 its then solicitors, RPC, issued a Withholding Notice in which it was alleged that HCL was 64 weeks in delay and therefore had a liability for liquidated damages in the sum of £250,000.
HCL disputes this. The following month it referred the dispute to adjudication and an adjudicator was appointed.
At the hearing of the application Glendalough was represented by Miss Anneliese Day QC, instructed by Stephenson Harwood, and HCL was represented by Miss Anna Laney, instructed by Silver Shemmings. I am grateful to both of them for the quality and succinctness of their submissions.
Glendalough's objections to the jurisdiction of the adjudicator
On 16 August 2013 HCL sent a Notice of Adjudication to Glendalough, at Stephenson Harwoods's address. The notice said this:
"We seek a Decision from the Adjudicator that:
i. the Employer is not entitled to deduct liquidated damages from amounts otherwise due to us;
ii. the Employer is not entitled to payment from us for liquidated damages;
iii. the Employer shall pay us the sum of £245,278 forthwith and without set off or such other sum as the Adjudicator shall decide;
iv. the Employer shall pay us interest in such sums as the Adjudicator shall decide;
v. the Employer should pay all of the Adjudicator's fees and expenses in this matter, or such other apportionment as the Adjudicator shall decide."
Paragraph 2.1 of the Referral dated 23 August 2013 described the contract as follows:
"By an agreement [Glendalough] employed [HCL] to carry out the construction of a Residential Block and B1 Studios at 121–127 Church Walk, London."
By an email dated 24 August 2013 Glendalough's solicitor wrote to the adjudicator in the following terms:
"As regards the Referral, it appears that [HCL] has not complied with the Scheme for Construction Contracts in that it has not provided copies of documents upon which it wishes to rely including the construction contract in accordance with section 7(2).
In view of the above, Glendalough must reserve its position fully as to whether the proper procedure as to the service of the Referral and appointment of the Adjudicator has been followed in accordance with the Scheme for Construction Contracts.
As regard the contents of the Referral, this fails to set out any details in support of [HCL's] purported case for the return of the deducted liquidated damages to enable Glendalough to understand the case that it has to meet and to respond to the same in its defence. As such [HCL's] referral is embarrassing and provides no evidence or material upon which you could find other than that its case is not proved.
By copy of this e-mail we therefore invite [HCL] to avoid wasting further time and costs on this purported adjudication and to withdraw its current Notice of Dispute and Referral and bring these proceedings to an end."
By a further email later the same day Glendalough's solicitor wrote again to the adjudicator in the following terms:
"However, what [HCL] failed to do, is to provide any explanation or support for its contention that RPC was wrong to advise Glendalough that it was entitled to make such a deduction. [HCL] has not even provided, with the Referral, the Contract or the RPC letter referred to (together with any other documents upon which it seeks to rely), in breach of section 7 of the Scheme for Construction Contracts.
…
In the meantime all of Glendalough's rights remain reserved."
There then followed a brief debate about the timing of the adjudicator's appointment. Stephenson Harwood then sent a further email to the adjudicator on the 25 August 2013 in which they said this:
"[The adjudicator] has clarified the timing of his appointment and therefore Glendalough is satisfied that he was appointed prior to service of the Referral as required by the Scheme for Construction Contracts."
Stephenson Harwood then repeated its contention that to continue the adjudication on the current basis would be to breach the requirements of the Scheme and be manifestly unfair to Glendalough. Later the same day Stephenson Harwood sent a further email to the adjudicator which began as follows:
"To avoid any misunderstanding, Glendalough does not contest your appointment. Glendalough does, however, maintain that [HCL]:
1. has failed to comply with Section 7(2) of the Scheme for Construction Contracts; and
2. has failed to provide any detail in its Referral to enable Glendalough to understand the case that it has to meet and to respond other than by way of a general denial.
In Glendalough's respectful submission, the above failures have deprived you of jurisdiction to determine this dispute (which for the avoidance of doubt Glendalough does not give you jurisdiction to decide) and/or constitute a breach of Natural Justice which will render any decision by you, invalid.
Further and/or in the alternative, the lack of explanation and particularisation by [HCL] of its case, means in Glendalough's respectful submission, that in the face of a general denial from Glendalough, that you are unable to reach any finding other than that [HCL] has not proved its case. This will lead to the incurrence of unnecessary expense and wasted time.
Lastly, if in spite of the above, you decide to proceed with this Adjudication, then Glendalough will reluctantly participate in the process, whilst reserving all of its rights to challenge the enforcement of any decision on the grounds of a lack of jurisdiction and/or a failure to comply with Natural Justice."
Glendalough served its Response on 30 August 2013. In response to HCL's description of the contract it said this:
"3. Save for the further details set out in paragraph 4 below, paragraph 2.1 is admitted.
4. The form of Contract was the JCT Standard Form of Building Contract Revision 2 2009 with Quantities. Completion was to take place in stages; Section 1 being the 'Main Building' and Section 2 being 'External Works'. The completion date for both sections was 8 July 2011 (the ' Original Completion Date').
I should note at this stage that the form of contract referred to in the Response was not the same as the form of contract referred to in the letter of intent dated 24 February 2010 (see paragraph 2 above).
At no stage during these early exchanges with the adjudicator did Glendalough raise the point that HCL was or might be relying on an agreement that was made otherwise than in writing so that it had no right to refer the dispute to adjudication. Miss Day submitted that this was quite understandable: the point was not raised, she said, until the service of a Surrejoinder by HCL on 26 September 2013. Glendalough's case is that the effect of the Surrejoinder is that HCL was asserting a contract that did not comply with section 107 of the 1996 Act.
Glendalough submits that it made a full reservation of its rights in relation to the jurisdiction of the adjudicator and so it is not open to HCL to contend that in some way it has waived its right to contend that the contract contended for by HCL in its Surrejoinder does not comply with section 107.
For my part, I think it is doubtful whether Glendalough did in fact reserve its rights as to whether the adjudicator could be appointed at all. As I have mentioned, on 25 August 2013 Stephenson Harwood said in an email that they did not contest the appointment of the adjudicator. In these circumstances I have some difficulty in seeing how any reservation of rights, however general, could be taken to extend to the validity of the adjudicator's appointment. The thrust of Glendalough's objections was that HCL, in failing to supply the documents upon which it relied with its Referral, had not complied with the Scheme and that as a result Glendalough did not know what case it had to meet. In those circumstances to continue with the adjudication, it contended, would result in a breach of natural...
To continue reading
Request your trial
-
Malcolm Charles Contracts Ltd v Mr Charles Julian Crispin and Another
...will be implied if there is no agreement)…". (See also Glendalough Associated SA v Harris Canlan Construction Col Ltd (2013) EWHC 3142, [2014] 1 WLR 1751, per Edwards-Stuart J at paragraph 60.) 57 Where parties carry on lengthy negotiations, the court must look at the whole correspondence ......
-
Table of cases
...207 III.23.15, III.24.37, III.24.45, III.24.47, III.24.111, III.24.139 Glendalough Associated SA v Harris Calnan Construction Co Ltd [2013] EWHC 3142 (TCC) II.6.78, II.6.84 “Glendarroch”, he [1894] P 226 II.13.212 Glen Eight Pty Ltd v Home Building Pty Ltd [2005] NSWSC 309, 907 III.20.46, I......
-
Price and payment
...Son v he Camber [2007] eWHc 1626 (QB) at [16]–[21], per HHJ hornton QC; Glendalough Associated SA v Harris Calnan Construction Co Ltd [2013] EWhC 3142 (TCC). Compare Adonis Construction v O’Keefe Soil Remediation [2009] EWhC 2047 (TCC) at [45], per Christopher Clarke J. 265 Macaulay, “Const......