Kier Regional Ltd (T/A Wallis) v City & General (Holborn) Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE JACKSON |
| Judgment Date | 06 March 2006 |
| Neutral Citation | [2006] EWHC 848 (TCC) |
| Docket Number | Case No: HT-06-45 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 06 March 2006 |
[2006] EWHC 848 (TCC)
IN THE HIGH COURT OF JUSTICE
TECHNOLOGY AND CONSTRUCTION COURT
QUEEN'S BENCH DIVISION
St Dunstan's House
133137 Fetter Lane
London EC4A 1HD
The Honourable Mr Justice Jackson
Case No: HT-06-45
MR ADRIAN WILLIAMSON QC (instructed by Messrs Taylor Wessing) appeared on behalf of the Claimant
MR JOHN BLACKBURN QC (Instructed by Messrs Pinsent Masons) appeared on behalf of the Defendant
Monday, 6 March 2006
This judgment is in six parts, namely: Part 1, Introduction; Part 2, The Facts; Part 3, The Present Proceedings; Part 4, The Law; Part 5, Application to the Present Case; Part 6, Conclusion.
Part 1: Introduction
This is an application by a building contractor for summary judgment to enforce an adjudicator's award. The building contractor, who is claimant in these proceedings, is Kier Regional Limited, trading as Wallis ("Kier"). It is referred to in some of the documents from which I shall quote as "Wallis".
The employer, who is defendant in these proceedings, is City & General (Holborn) Limited ("CG"). The role of contract administrator in relation to the building project in question is being performed by a company called AYH Plc ("AYH").
The statutory background to this litigation is the Housing Grants Construction and Regeneration Act 1996 ("the 1996 Act"). It is not necessary for me to read out any provisions of the 1996 Act, since no issue arises concerning the meaning or effect or those provisions. The adjudication in the present case was carried out pursuant to contractual provisions which accord with the requirements of the 1996 Act.
There has been earlier litigation concerning the same building project between CG and AYH. The outcome of that litigation is recorded in City & General (Holborn) Limited v AYH Plc [2005] EWHC 2494 (TCC).
After these brief remarks by way of introduction, I must now turn to the facts of the present case.
Part 2: The Facts
By a contract dated 6 November 2001, made between CG and Kier, Kier agreed to carry out works of refurbishment and rebuilding at the site of the former Patent Office Library in London ("the Construction Contract"). The Construction Contract was made using the JCT Standard Form of Building Contract, 1998 edition with amendments. The contract sum was £11,650,000. The Contract Administrator named in the Construction Contract was and is AYH. Clause 25 of the Construction Contract provides that the Contractor Administrator may grant extensions of time on certain specified grounds. Clause 26 provides that Kier shall be entitled to recover loss and expense on certain specified grounds. Some of the grounds which entitle Kier to an extension of time under clause 25, also entitle Kier to recover loss and expense under clause 26.
Clause 41A of the Construction Contract provides for adjudication. It is accepted by both parties that the provisions of clause 41A comply with the requirements of the 1996 Act. Clause 41A includes the following sub-clauses:
"41A.5.2 The party not making the referral may, by the same means stated in clause 41A.4.2 send to the Adjudicator within 7 days of the date of the referral with a copy to the other party a written statement of the contentions on which he relies and any material he wishes the Adjudicator to consider.
41A.5.3 The Adjudicator shall, within 28 days of the referral under clause 41A.4.1 (and acting as an Adjudicator for the purposes of section 108 of the Housing Grants Construction and Regeneration Act 1996 and not as an expert or an arbitrator) reach his decision and forthwith send that decision in writing to the parties provided that the party who has made the referral may consent to allowing the adjudicator to extend the period of 28 days by up to 14 days and that by agreement between the parties after the referral has been made, a longer period than 28 days may be notified jointly by the parties to the Adjudicator within which the reach his decision.
41A.5.4 The Adjudicator shall not be obliged to give reasons for his decision.
41A.5.5 In reaching his decision, the Adjudicator shall act impartially and set his own procedure and, at his absolute discretion, may take the initiative in ascertaining the facts and the law as he considers necessary in respect of the referral which may include the following:
.5.1 Using his own knowledge and/or experience;
.5.2 Subject to clause 30.9 opening up, reviewing and revising any certificate, opinion, decision, requirement or notice issue given or made under this contract as if no such certificate, opinion, decision, requirement or notice had been issued, given or made;
.5.3 Requiring from the parties further information than that contained in the notice of referral and its accompanying documentation, or in any written statement provided by the parties, including the results of any tests that have been made or of any opening up.
.5.4 Requiring the parties to carry out tests or additional tests or to open up work or further open up work.
.5.5 Visiting the site of the works or any workshop where work is being or has been prepared for this Contract.
.5.6 Obtaining such information as he considers necessary from any employee or representative of the parties provided that, before obtaining information from an employee of a party, he has given prior notice to that party.
.5.7 Obtaining from others such information and advice as he considers necessary on technical and on legal matters, subject to giving prior notice to the parties together with a statement or estimate of the cost involved.
.5.8 Having regard to any term of this Contract relating to payment of interest, deciding the circumstances in which or the period for which a simple rate of interest shall be paid."
A number of delays and problems have arisen during the course of the works for reasons which are in dispute between the parties. Kier contends that the sum which is due to it on the final account is approximately £30 million.
Disputes between the parties have already generated five different Adjudications. In Adjudication No.2, the Adjudicator was Mr Ellis. Mr Ellis awarded to Kier an extension of time of 28 weeks. This was in addition to an extension of time of 31 weeks previously granted by the Contract Administrator.
Following Adjudication No.2, Kier made an application for loss and expense in respect of the period for which it had received an extension of time. After some correspondence on this matter, Kier's claim was finally formulated in Interim Application No.32. The loss and expense claimed on that occasion was £1,330,012. The sum was made up of the following components: site administration, multi-service gang, welfare, site accommodation, scaffolding, plant, tower crane, temporary electrics, water, telephone, fax, copier, email, protection, site clean and bond.
On 13 August 2004, AYH issued Interim Certificate of Valuation no.32. This certificate included loss and expense in the sum of £527,192. It can be seen from the contemporaneous documents that this is a sum which had been awarded to Kier some months previously. Interim Certificate 32 does not include any additional loss and expense in respect of the extension of time awarded in Adjudication No.2.
Kier was dissatisfied with the sums certified in Interim Certificate 32. Accordingly, on 14 September 2004, Kier commenced a further adjudication. This was Adjudication No.3. Mr Ellis was again appointed as Adjudicator. Kier's Notice of Adjudication and Referral first set out Kier's contentions in some detail. It then set out the remedies sought in section 6. Section 6 includes the following passage:
"6.1 The Referring Party requests that the Adjudicator considers and makes a decision as to whether it is entitled to an ascertainment and Interim Certificate for loss and/or expense for £1,330,012 based on contract preliminary rates as set out in Application No.32. The Referring Party requests that such decision be made in favour of the Referring Party in accordance with clauses 26.1, 30.1.1.1 and 30.2.2.2 based on the information set out in the Referral.
6.2 Alternatively, the Referring Party requests that the Adjudicator considers and makes a decision to award the Referring Party loss and/or expense based on contract preliminary rates which the Adjudicator considers appropriate and states under which clauses such extension is to be granted based on the information set out in the Referral."
(In reading out this extract, I have corrected what is clearly one clerical error).
CG served its Notice of Response on 23 September 2004. CG advanced four lines of defence. These were as follows: (1) the Adjudicator had no jurisdiction, because no dispute had crystallised; (2) Kier was claiming loss and expense on a basis that did not accord with the terms of the Construction Contract; (3) there were concurrent causes of delay for which Kier was not entitled to reimbursement; a significant part of the loss and expense claimed by Kier ought to be attributed to these concurrent causes; (4) if Kier was entitled to loss and expense on the basis claimed, then the actual figure should be substantially reduced on two principal grounds, which were set out in paragraph 6.2 of the Notice of Response as follows:
"6.2.1 There are a number of preliminary items that do not relate to the works that were carried out during the period in respect of which the Referring Party is claiming an entitlement to loss and/or expense; and
6.2.2 Where the preliminaries do relate to works that were delayed by reason of an event that gives rise to an...
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