ISG Construction Ltd v Platform Interior Solutions Ltd

JurisdictionEngland & Wales
JudgeMr Roger ter Haar
Judgment Date07 May 2020
Neutral Citation[2020] EWHC 1120 (TCC)
Docket NumberCase No: HT-2020-000070
CourtQueen's Bench Division (Technology and Construction Court)
Date07 May 2020

[2020] EWHC 1120 (TCC)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

TECHNOLOGY AND CONSTRUCTION COURT (QBD)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Roger Ter Haar QC

Sitting as a Deputy High Court Judge

Case No: HT-2020-000070

Between:
ISG Construction Limited
Claimant
and
Platform Interior Solutions Limited
Defendant

Patrick Clarke (instructed by Brodies LLP) for the Claimant

Rupert Choat (instructed through the Licensed Access Scheme) for the Defendant

Hearing date: 24 April 2020

Approved Judgment

Mr Roger ter Haar QC:

1

On the 21 st April 2020 under the Covid-19 Protocol I handed down judgment in Case No. HT-2020-000038. In that case the Claimant is Platform Interior Solutions Limited (“Platform”) and the Defendant is ISG Construction Limited (“ISG”). In that action Platform sought to enforce an adjudicator's decision issued by Ms Lisa Cattanach on 11 December 2019. I granted summary judgment as sought by Platform.

2

That judgment can be found on Bailii: Neutral Citation Number [2020] EWHC 945 (TCC). I do not intend to burden this judgment by a recital of matters contained in that judgment save to the minimum extent necessary for the purposes of this judgment.

3

In this action ISG is the Claimant and Platform is the Defendant.

4

The present action is brought under CPR Part 8. ISG seeks declarations as follows:

“(a) The decision of the adjudicator is wrong and beyond rational justification in that the adjudicator's assessment of sums due to Platform was inconsistent with the terms of the Sub-Contract;

“(b) Platform is not entitled to the sums awarded by the adjudicator; and/or

“(c) Insofar as this claim is determined prior to or at the same time as Platform's application for summary judgement to enforce the Decision in claim HT-2020-000038, that Platform is not entitled to judgment enforcing the Decision.”

5

The terms of those declarations make it clear that the purpose of this action is to prevent enforcement of the Adjudicator's Decision.

6

Case HT-2020-000038 was commenced on 31 January 2020. This case was commenced on 27 February 2020.

7

On 10 March 2020 this Court directed as follows:

“There is insufficient time to timetable this Part 8 Claim for hearing with the Part 7 enforcement hearing, which raises different issues for determination. Please could you obtain a time estimate from both parties for the Part 8 hearing so that a date can be fixed.”

8

ISG attempted to persuade this Court to change its mind, but on 13 March O'Farrell J. refused that application and directed that this Part 8 claim should be listed for a separate hearing. In accordance with this direction, Platform's Part 7 claim was heard by me on 24 March, and this Part 8 claim on 24 April 2020.

9

On both occasions because of the present public health crisis, the hearings were by telephone with the consent of the parties. I would like to thank the parties for the co-operation of both counsel and solicitors which made both hearings possible.

ISG's position on the substantive issues arising out of the Adjudication

10

In the contract between the parties, Clause 27 of the Sub-Contractor Conditions was headed “Termination of Sub-Contractor's Employment” and provided:

“(1) ISG may without prejudice to any other of its rights or remedies immediately terminate the Sub-Contactor's employment under this Sub-Contract in respect of the whole or any part of the Works if the Sub-Contractor:

“….

“(h) is in material or persistent breach of this Sub-Contract.

“….

“(4) The Sub-Contractor shall within 14 days of being so notified, submit an application for payment for works executed by him up to the date of termination. Such application shall be treated in all respects as if it was a final account submitted by the Sub-Contractor pursuant to clause 2(12) and the procedures set out in clause 2 shall apply in respect of such an application.

“(5) ISG shall be entitled to recover from the Sub-Contractor all losses, expenses, costs and damages suffered or which may be suffered by ISG by reason of such termination.”

11

In the Details of Claim on the Claim Form in this action ISG sets out its case as to the approach adopted by the Adjudicator as follows:

“20. As set out above, on the termination of the Contract under Clause 27(1) of the Sub-Contract Conditions, Clauses 27(4) and 27(5) govern the parties' entitlements to payment. However, Clauses 27(4) and 27(5) were not applied by the adjudicator.

“21. ISG's position in the adjudication was that Clauses 27(4) and 27(5) govern payment following termination as set out in paragraphs 11.1 and 11.2 of the Adjudicator's decision. Further ISG's losses under Clause 27(5) could be calculated by taking the difference between what ISG would have had to have paid Platform to complete the works but for the termination and the actual cost of completion.

“22. As to the approach to the valuation of sums due, at paragraph 11.28 of the Decision the Adjudicator decided that:

I concur with [ISG] that the termination valuation should be based upon the value of the works it would have paid to [Platform] less the costs it has actually incurred in completing the works within the Scope of the Referring Party's Sub-Contract.”

“23. Contrary to that determination ISG had not submitted that the ‘termination valuation’ of any sum due to Platform should be calculated on that basis. ISG had maintained that ISG's losses, and any sum due to ISG in respect of those losses, could be calculated by taking the total cost of completing the works and deducting the value of the works that ISG would have paid to Platform.

“24. The Adjudicator went on to determine that:

“a. If the works had been completed by Platform, the value of the works carried out by Platform would have been £2,506,096.38 (paragraph 11.30 of the Decision).

“b. The actual cost to ISG of completing the works, including sums paid to Platform was £2,088,555.05 (paragraph 11.31 of the Decision).

“c. ISG was therefore liable to make payment to Platform in the sum of £417,541.33, being the amount of the saving that ISG had made as a result of the termination, being the difference between the actual cost of completion of the works and the sums that would have been payable to Platform but for the lawful termination of the Sub-Contract. (paragraph 13.1 of the Decision)

“25. The Adjudicator's calculation of the sum due to Platform was not in accordance with the parties entitlements pursuant to Clauses 27(4) and 27(5) of the Sub-Contract Conditions or any clauses of the Sub-Contract or any claim before the Adjudicator.

“26. The Adjudicator did not value the works carried out by Platform in accordance with Clause 27(4) of the Sub-Contract Conditions or at all.

“27. In the premises the Adjudicator's decision that ISG was liable to pay any sum to Platform and/or that ISG was liable to pay the sum of £417,541.33 was incorrect and made in error.

“28. The Adjudicator's error is fundamental to the decision and Platform is not entitled to the sums that it has been determined ISG should pay.”

12

These points were developed further in the skeleton argument of Mr. Clarke, counsel for ISG.

13

Those arguments raise serious issues as to whether the approach adopted by the Adjudicator was correct as a matter of construction of the contract between the parties.

14

For his part, Mr. Choat, who appears for Platform, sidesteps the arguments as to the true construction of the contract for the reasons set out below.

15

In the event, I have not heard full argument on the proper approach to the contract. Nothing I say in this judgment should be taken as determining that ISG's submissions as to the correct application of the contract. There is a separate point which I must consider as to the submissions made by ISG to the Adjudicator and the extent to which they reflect the position taken by ISG in the Adjudication.

Hutton Construction Ltd v Wilson Properties Ltd

16

Both parties drew my attention to the decision of Coulson J (as he then was). in Hutton Construction Ltd v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC); [2017] BLR 344. That was a case in which in response to a claim form seeking to enforce an adjudication decision the party held by the adjudicator to be the paying party commenced Part 8 proceedings contending that the adjudicator's decision was incorrect. On the summary judgment application to enforce the decision, the defendant sought to defend the application on the grounds that the adjudicator was wrong to reach the conclusion that he did and that, in consequence, there should be no judgment in favour of the claimant.

17

As the learned judge pointed out, the defendant's stance was one which was increasingly common amongst those dissatisfied with an adjudicator's decision. As a result of the guidance in Hutton, the circumstances in which such an approach will be successful have been significantly restricted.

18

At paragraphs [3] to [5] of his judgment Coulson J. set out the relevant principles as follows:

“3. The starting point, of course, is that, if the adjudicator has decided the issue that was referred to him, and he has broadly acted in accordance with the rules of natural justice, his decision will be enforced: see Macob Civil Engineering Limited v Morrison Construction Limited [1999] BLR 93. Adjudication decisions have been upheld on that basis, even where the adjudicator has been shown to have made an error: see Bouygues (UK) Limited v Dahl-Jensen (UK) Limited [2000] BLR 522. Chadwick LJ summarised the principal reason for this in Carillion Construction Limited v Devonport Royal...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT