Lanes Group Plc v Galliford Try Infrastructure Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 06 July 2011 |
| Neutral Citation | [2011] EWHC 1679 (TCC) |
| Docket Number | Case No: HT–11- 190 and 194 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 06 July 2011 |
[2011] EWHC 1679 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge Waksman Qc Sitting as a Judge of The High Court
Case No: HT–11- 190 and 194
Richard Wilmot-Smith QC, Karen Gough and Rachael O'Hagan (instructed by Barton Legal, Solicitors) for the Claimant
Piers Stansfield (instructed by McGrigors, Solicitors) for the Defendant
Hearing date: 21 June 2011
Introduction
By a Decision dated 17 May 2011, the adjudicator, Mr Daniel Atkinson decided that the sub-contractor, Lanes Group Plc ("Lanes") should pay the main contractor, Galliford Try Infrastructure Limited ("GTI") the sum of £1,360,145.28 (as later corrected) together with the adjudicator's fees ("the Decision"). On 23 May 2011, Lanes brought Part 8 proceedings to challenge the Decision. On 26 May 2011, GTI brought a separate claim to enforce. It is common ground that if Lanes' challenge succeeds on any basis there can be no enforcement, but if it fails, GTI will be entitled to summary judgment in the sums awarded by the adjudicator. So both claims were heard together.
Lanes contends that Mr Atkinson's Decision is a nullity because:
(1) He had no jurisdiction to make it because GTI had previously commenced, but not pursued, an adjudication on the same point before a different adjudicator, namely Mr Howard Klein and was not entitled to start again before Mr Atkinson; and/or
(2) Mr Atkinson's Decision is the product of apparent bias.
GTI denies both of these claims. In addition it contends that the point referred to in paragraph 2 (1) above, even if well-founded, could and should have been made in an earlier injunction application heard by Mr Justice Akenhead shortly after commencement of the adjudication by Mr Atkinson whereby Lanes sought (unsuccessfully) to prevent its continuation. Accordingly, it is an abuse of process to make it now.
The Contract
Lanes agreed with GTI to re-roof the Network Rail Traction Maintenance Depot in Inverness. It did so pursuant to an order dated 13 May 2008 made under the Civil Engineering Contractor's Association "Blue Form" Sub-contract terms and conditions ("the Sub-Contract"). Clause 18B thereof incorporated a right to adjudicate any disputes under the Institution of Civil Engineers ("ICE") Adjudication Procedure 1997 in the following terms:
"(1) (a)…the Contractor and the Sub-Contractor each has the right to refer any matter in dispute arising under or in connection with the Sub-Contract or the carrying out of the Sub-Contract Works to adjudication and either party may at any time give notice in writing (hereinafter called the Notice of Adjudication) to the other of his intention to do so. The adjudication shall be conducted under "The Institution of Civil Engineers' Adjudication Procedure (1997) "…
(b) Unless the adjudicator has already been appointed he is to be appointed by a timetable with the object of securing his appointment and referral of the dispute to him within 7 days of such notice."
The ICE Adjudication Procedure ("the Procedure")
This provides, amongst other things, as follows:
"1.2 The object of adjudication is to reach a fair, rapid and inexpensive determination of a dispute arising under the Contract and this Procedure shall be interpreted accordingly.
The Adjudicator shall be a named individual and shall act impartially…
Any Party may give notice at any time of its intention to refer a dispute arising under the Contract to adjudication by giving a written Notice of Adjudication to the other Party. The Notice of Adjudication shall include:
(a) the details and date of the Contract between the Parties;
(b) the issues which the Adjudicator is being asked to decide;
(c) details of the nature and extent of the redress sought…
[If a specific adjudicator is not agreed upon]…then either Party may within a further three days request the person or body named in the Contract or if none is so named The Institution of Civil Engineers to appoint the Adjudicator. Such request shall be in writing on the appropriate form of application for the appointment of an adjudicator and accompanied by a copy of the Notice of Adjudication and the appropriate fee.
The Adjudicator shall be appointed on the terms and conditions set out in the attached Adjudicator's Agreement and Schedule and shall be entitled to be paid a reasonable fee together with his expenses. The Parties shall sign the agreement within 7 days of being requested to do so.
If for any reason whatsoever the Adjudicator is unable to act, either Party may require the appointment of a replacement adjudicator in accordance with the procedure in paragraph 3.3.
The referring Party shall within two days of appointment…under paragraph 3.3 send a full statement of his case which should include:
(a) a copy of the Notice of Adjudication;
(b) a copy of any adjudication provision in the Contract, and
(c) the information upon which he relies, including supporting documents.
The date of referral of the dispute to adjudication shall be the date upon which the Adjudicator receives the documents referred to in paragraph 4.1. The Adjudicator shall notify the Parties forthwith of that date.
The Adjudicator shall reach his decision within 28 days of referral, or such longer period as is agreed by the Parties after the dispute has been referred. The period of 28 days may be extended by up to 14 days with the consent of the referring Party.
The other Party may submit his response to the statement under paragraph 4.1 within 14 days of referral. The period of response may be extended by agreement between the Parties and the Adjudicator."
Termination and Adjudication
On 28 April 2009 GTI terminated Lanes' employment under the Sub-Contract and/or claimed to have accepted its repudiatory breach and sought damages. This issue will be the subject of an arbitration to take place before Mr Justice Ramsey in January 2012.
On 9 March 2011, GTI's solicitors in Glasgow, McGrigors, requested the ICE to appoint an adjudicator and sent to it a copy of its Notice of Intention to Refer a Dispute to Adjudication. In what follows I gratefully adopt the summary of facts set out by Akenhead J in his judgment in the injunction claim, Lanes Group Plc v Galliford Try Infrastructure Limited [2011] EWHC 1035.
In its Notice, GTI sought a declaration that it had lawfully determined Lanes' employment under the Sub-Contract, or alternatively that Lanes had repudiated the Sub-Contract, and claimed over £2.7m. In the letter seeking an appointment, GTI suggested that Mr Mark Dixon be appointed because he had previously acted as adjudicator. This was copied to Lanes' solicitors. On the same day Lanes' claim consultants, Bunton Consulting Partnership ("Bunton"), wrote to McGrigors saying that any adjudicator appointed would have no jurisdiction. They also wrote to the ICE saying that it would be inappropriate for Mr Dixon to be appointed:
"My clients object to this gentleman. Mr Dixon acted as Adjudicator in a previous Adjudication between the parties. My clients consider that the matter was not handled to my clients' satisfaction and further…if he was appointed, in this current matter, that Mr Dixon would be biased against my clients."
GTI's solicitors protested to the ICE about this.
On 10 March 2011, the ICE appointed Mr Howard Klein FCIArb, FIOB, who also is a Chartered Quantity Surveyor. He wrote to the parties on 10 March 2011 confirming that he was willing to act and that he had accepted his appointment. Lanes by their consultants continued to reserve its position on jurisdiction and wrote to Mr Klein to that effect.
On 11 March 2011, GTI's solicitors wrote to the ICE in the following terms:
"…You kindly nominated Mr Klein of Warrington as adjudicator. However, our firm view is that Mr Klein is not an appropriate adjudicator in this matter, as we shall explain. Our Mr Fraser conducted a series of adjudications about one year ago, in which Mr Klein acted for the other party. The series was relatively acrimonious, and involved suggestions of forgery and profoundly contradicting credibility. At one stage, Mr Klein misunderstood our submission that a witness statement may have been signed by someone other than its author. This episode triggered his attached fax (redacted to anonymise the parties). We had not, in fact, suggested that Mr Klein had done so, and Mr Klein had misunderstood our submission. With the greatest respect to Mr Klein, whose professional probity we do not question whatsoever, this history may make it difficult to him to be seen to be impartial in this new adjudication. Accordingly, we do not propose to proceed with the adjudication notice in which you have appointed Mr Klein. We have served a fresh adjudication notice, which is attached. We also attach a further
nomination application. We invite you to appoint an adjudicator other than Mr Klein (or, for that matter, Mr Dixon, whom you will recall was opposed by Lanes)…"
Bunton wrote to the ICE on 14 March 2011 saying in effect that they could not nominate another adjudicator and that Mr Klein was not biased. In fact, the ICE was not prepared at that stage to appoint another adjudicator. As at this point GTI had not served its statement of case as it should have done under paragraph 4.1 of the ICE procedure. On 15 March 2011, Bunton wrote to GTI's solicitors:
"We contend that the decision by [GTI] not to serve its statement of case under paragraph 4.1 of the ICE Adjudication Procedure is a repudiatory breach of the adjudication agreement set out in clause 18B of the Sub-contract between GTI and Lanes. Which Lanes hereby accepts. If you were, or are, of the view...
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