ISG Retail Ltd v Castletech Construction Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Edwards-Stuart,Mr. Justice Edwards-Stuart |
| Judgment Date | 22 May 2015 |
| Neutral Citation | [2015] EWHC 1443 (TCC) |
| Date | 22 May 2015 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2015-000182 |
[2015] EWHC 1443 (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-2015-000182
Luke Wygas Esq (instructed by Knights Solicitors LLP) for the Claimant
Peter Oliver Esq (instructed by Contract & Construction Consultants Ltd) for the Defendant
Hearing dates: 14 th May 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is an application for summary judgment to enforce a decision of an adjudicator. By a decision dated 4 March 2015 the adjudicator decided that the defendant, Castletech Construction Ltd ("CC") had provided nothing of value to the claimant ISG Retail Ltd ("ISG"), so that, in breach of contract, there had been a complete failure of consideration by CC. Since ISG had made an advance payment to CC of £35,000 plus VAT, the adjudicator ordered CC to repay that sum forthwith.
He also decided that ISG was not entitled to interest on that sum.
CC resists the application on the ground that the adjudicator lacked jurisdiction to do what he did.
ISG was represented by Mr. Luke Wygas, instructed by Knights Solicitors LLP, and CC was represented by Mr. Peter Oliver, instructed by Contract & Construction Consultants Ltd.
The facts
The Notice of Adjudication dated 3 February 2015 set out the terms of the contract and then asserted (at paragraph 10) that a dispute had arisen between the parties under the contract.
It then recited that "pursuant to the contract" ISG had paid £35,000 plus VAT to CC. It asserts that CC completely failed to perform its obligations so that there was "a complete failure of consideration".
At paragraph 13 the Notice of Adjudication said this:
"ISG has suffered loss as a consequence of CC's breaches, in the sum of £35,000 plus VAT. This sum must be repaid to ISG forthwith, plus interest plus costs."
At paragraph 14 of its Referral Notice, which was served two days later, ISG asserted:
"As a matter of law, if a defendant has been paid in advance but fails fully to perform its obligations as it promised to do, it follows that the claimant can recover its advance payment by virtue of total failure of consideration. That is exactly what has occurred in this matter."
Then, at paragraph 17:
"In the event, ISG has incurred a loss and is entitled to recover in restitution the sum of £35,000 plus VAT by reason of a total failure of consideration."
This paragraph, together with paragraph 16 immediately before it, included for the first time a reference to restitution.
Under the heading "The Redress Sought", ISG said that it wanted the adjudicator to make the following decisions:
"32.1 That CC acted in breach of contract as set out above.
32.2 That as a result ISG suffered the loss summarised above.
32.3 That CC owes sums to ISG as a consequence.
32.4 That ISG is entitled to payment by CC in the sum of £35,000 plus VAT, or such other greater or lesser sum as the Adjudicator may decide is due.
32.5 That ISG is entitled to interest on such sums."
In its Response CC did not dispute that there was a contract, although it denied that the documents forming the contract were those relied on by ISG. At paragraph 4.1 it said this:
"ISG are not entitled to the remedy that they have claimed (restitution) in adjudication at all because that is an equitable remedy not within an adjudicator's jurisdiction/power."
Then, at paragraph 4.4:
"There is no pleaded or factual basis on which the adjudicator can find any breach of contract/partial failure of consideration other than a 100% failure to perform (which is clearly not the case on the evidence)."
The point was repeated at paragraph 15 where CC denied being in breach of contract or that there was a total failure of consideration.
In relation to the question of restitution, CC submitted, at paragraph 22 of the Response:
"This confirms that ISG's restitutionary claim is not made under the sub-contract — because restitutionary claims are not made under contracts, they are made in equity, restitution being an equitable remedy — and as such the adjudicator has no jurisdiction/power to decide it."
The reference to "under contracts" is a reference to paragraph 1 of Part I of the Scheme for Construction Contracts (made by way of SI No 649 of 1998) which confers the right on any party to a construction contract to refer to adjudication "any dispute arising under the contract".
The grounds on which CC resists the application for summary judgment
CC resists the application for summary judgment on the grounds that the adjudicator had no jurisdiction because:
i) The adjudicator made a decision that was outside the scope of the dispute referred to him; or
ii) The dispute was not a dispute arising under the contract.
In its skeleton argument CC says that it refused to repay ISG as it had undertaken substantial work and because ISG had no right to seek accelerated performance under the contract (paragraph 11).
CC submits, correctly, that the scope of the referral is determined by the terms of the Notice of Adjudication. It then submits that, since there is no mention of, let alone a claim for, restitution in the Notice of Adjudication, the adjudicator can have had no jurisdiction to decide that ISG was entitled to a sum by way of restitution.
The authorities
I was referred by counsel to several authorities, but it is necessary to refer only to a few of them. Some of the authorities were directed to the proposition that the words...
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Projects And Construction Law Update - June 8, 2015
...certain performance results. To view the full text of the decision, please click here ISG Retail Ltd v Castletech Construction Ltd [2015] EWHC 1443 (TCC) Here the court found an adjudicator had jurisdiction to award restitution as an available remedy following a breach of contract. The case......
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...Dawson JJ; Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLr 516 at 525; ISG Retail Ltd v Castletech Construction Ltd [2015] EWhC 1443 (TCC) at [16]–[19] and [23], per Edwards-Stuart J; Simpson Marine (SEA) Pte Ltd v Jiacipto Jiaravanon [2019] SGCa 7; Birks “Failure of Conside......
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