Iluminesia Ltd (t/a Alterego Facades) v RFL Facades Ltd

Hearing date: 20 November 2023

Approved Judgment

This judgment was handed down remotely at 10.00am on 6 December 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives (see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html).

HH JUDGE Davis-White KC

(SITTING AS A JUDGE OF THE KING'S BENCH DIVISION)

HH JudgeDavis-WhiteKC:

Introduction

This is my judgment on a summary judgment application in adjudication enforcement proceedings brought by the Claimant, Iluminesia Limited (trading as AlterEgo Facades) (“AlterEgo”) against the Defendant, RFL Facades Limited (“RFL”).

The hearing had been adjourned by agreement due to the unavailability of counsel by reason of illness.

In addition to the adjudication enforcement proceedings, RFL has commenced Part 8 Proceedings (the “Part 8 Proceedings”). It has also served, without any court order, particulars of claim in the Part 8 Proceedings. By the Part 8 Proceedings, and in the event that it fails on the summary judgment application, RFL seeks declaratory relief, in effect, overturning the Adjudicator's decision in whole or part on the basis of error of law, any such decision of the court being a final one and replacing the interim decision of the Adjudicator.

It has been agreed before me that I should first deal with and give judgment on the summary judgment application in the adjudication enforcement proceedings. In light of that judgment, the parties will then address me further as to the appropriate procedural course to take. In particular (among other things), in the event that I grant summary judgment, there may be an issue as to whether I should stay any order for summary judgment pending resolution of the Part 8 Claim.

The Adjudication

The Adjudication in this case was conducted by Mr Donald Pugh MSc, FCIArb, FCIOB, Solicitor (“Mr Pugh” or the “Adjudicator”). It was commenced by a Notice of Intention to Refer to Adjudication dated 23 June 2023 (the “NOI”). AlterEgo requested the President of the Royal Institution of Chartered Surveyors (“RICS”) to nominate an adjudicator. By email dated 24 June 2023, RICS appointed Mr Pugh, a solicitor. Mr Pugh accepted the appointment on 26 June 2023. His final decision was given on 28 July 2023.

On 29 June 2023 AlterEgo served a Referral Document. The Defendant's Response was served on or about 14 July 2023. A Reply was served on 18 July 2023. A Rejoinder was served on 20 July 2023. By his decision dated 28 July 2023 the Adjudicator ordered RFL to pay AlterEgo £776,920.32 plus applicable VAT, interest and 80% of the Adjudicator's fee, within 7 days of the decision.

During the adjudication process, RFL raised three jurisdictional challenges, in brief that (1) the NOI failed to identify the relevant contract (or identified the incorrect one: this being a case where the formation of the contract depends upon an analysis of relevant correspondence between the parties); (2) the NOI and Referral failed to particularise breach of an “Order Acceptance” which document I shall refer to below and which was said by RFL to be the only contract identified in the NOI and (3) that a common law claim (of a repudiatory breach of contract), as opposed to breach of contract claim, was said to be raised as an alternative claim which was not a dispute arising under a contract for the purposes of s108 of the relevant Act. It then raised a fourth jurisdictional challenge, which was that the nature of the dispute and details of where and when it arose were included in the NOI but a brief description of the dispute was not. AlterEgo contested each of these challenges.

On 7 July 2023, the Adjudicator gave his non-binding views on jurisdiction. His conclusion was that there was nothing raised that would lawfully deprive him of jurisdiction, at least at that stage.

RFL then raised a fifth jurisdictional challenge which was that the contract in question was not a “construction contract” for the purposes of s104 of the Housing, Grants, Construction and Regeneration Act 1996 (the “1996 Act”). Adjudication could only apply if AlterEgo's terms and conditions were incorporated into the contract which, said RFL, they were not. By further written submissions dated 10 July 2023, RFL made yet further submissions on its five jurisdictional challenges and engaged with and challenged the Adjudicator's non-binding views. RFL also complained about the costs being incurred in the adjudication.

On 14 July 2023, the Adjudicator gave further supplemental non-binding views on jurisdiction. Among other things, he confirmed his view set out in an earlier email where he accepted that his earlier expressed view that the contract would be a “construction contract” was wrong:

“ However, as properly mentioned by [RFL's solicitors], a right to adjudicate potentially exists because of clause 13.1 of AEF s terms and conditions. The formation of the contract (and applicable terms) is a matter yet to be decided. It is a substantive issue in the adjudication and, properly, cannot be decided until submissions from both parties have been received. However, RFL confirm, as is to be expected, that they will address the issue in the Response.”

He also referred to a further submission by RFL, inviting him to resign on the basis that he should direct a preliminary issue as to the issue of contract formation but that as there was now no time to do so, he could be satisfied that he could not fairly and reasonably arrive at a decision in the allotted time (citing Coulson on Construction Adjudication (4 ^th edn) paras 4.64/65). He rejected that invitation. His overall conclusion remained unchanged.

The Adjudicator's final decision was, as I have said, given on 28 July 2023.

Advocates and evidence before me

The Claimant was represented before me by Mr McMillan of Counsel. The Defendant was represented by Mr Bowling. I am grateful to them for their helpful written and oral submissions.

The evidence before me on the summary judgment application comprised two witness statements of Mr Jan Rzedzian, of Hay & Kilner LLP, solicitors for the Claimant, AlterEgo and one witness statement of Mr Timothy Seal of Ridgemont Legal Services Limited, solicitors for the Defendant, RFL.

In addition extra documents were handed up during the hearing, without objection, by Mr Bowling, These comprised further pages 388 to 404 of the hearing bundle comprising a revised purchase order of RFL dated 9 January 2023, omitting the GRC Fins; a letter of 20 February 2023 from Hay & Kilner LLP on behalf of AlterEgo dealing with termination of the contract; the Letter of Claim sent by Hay & Kilner LLP dated 27 March 2023; the Letter of Reply of Ridgemont Legal Services Limited dated 5 May 2023 and another copy of the quotation of 15 December 2021.

The Parties and the background

AlterEgo is a supplier of architectural stone and concrete cladding.

The dispute in this case relates to a supply, or potential supply of cladding materials by AlterEgo to RFL in relation to RFL's works on a site at Eastbourne Terrace, London W2 (the “Site”).

One of the issues between the parties is whether a supply contract was entered into between them, and if so on what terms, in relation to the supply of goods/materials by AlterEgo to RFL.

As part of the relevant negotiations it was envisaged that a separate contract would be entered into by each of the parties before me and main contractor to RFL, RFL being its sub-contractor, regarding the relevant supply (the “Advance Payment Agreement”). The following detail is taken from a draft of that agreement. CSHV IUK ET Devco Limited (the “Employer”) and Gilbert Ash Limited (the “Main Contractor” or “GA”) had entered into a building contract under which the Main Contractor, GA, was to provide the design and build of cladding at the Site. The Main Contractor, GA, entered into a sub-contract with RFL for the purposes of carrying out the relevant defined works. RFL was in turn looking to enter into a contract with AlterEgo for the purposes of AlterEgo providing materials and/or goods for the works. In broad terms, under the proposed agreement between (1) GA, (2) RFL and (3) AlterEgo, in the event of a relevant payment default by RFL, GA would assume responsibility for the payment obligations of RFL to AlterEgo under the contract between AlterEgo and RFL and title to the goods that GA paid for would pass directly from AlterEgo to GA.

At various times, as I shall explain, AlterEgo quoted for the supply to RFL of 3 components (a) about 770 GRC (glass reinforced concrete) cladding panels (referred to as “GRC Fins”); (b) a hanging system for the GRC Fins, including casting rod, hanging clasp and rail (referred to before me as the “Carrier Rails System”) and (c) a subframe, including mullions and brackets (referred to before me as the “Subframe”). Over time the quotations changed as prices varied. However, some indication of the different prices at stake can be gleaned from a quotation from AlterEgo dated 15 December 2021 where the break down was (a) GRC Fins: £674,803.30; (b) Rails: £90,770.40 and (c) Sub-Frame: £102,116.70.

AlterEgo supplied RFL with the Carrier Rails System and Sub-Frame in about May 2022. However, RFL decided not to proceed with taking delivery of any GRC...