Matthew Harding (t/a M J Harding Contractors) v 1) Gary George Leslie Paice and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Edwards-Stuart,Mr. Justice Edwards-Stuart |
| Judgment Date | 21 November 2014 |
| Neutral Citation | [2014] EWHC 3824 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-14-371 |
| Date | 21 November 2014 |
[2014] EWHC 3824 (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-14-371
Gideon Scott Holland Esq (instructed by Davies and Davies LLP) for the Claimant
Charles Pimlott Esq (instructed by Silver Shemmings LLP) for the Defendants
Hearing date: 29 th October 2014
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 by the Claimant for an injunction to restrain the Defendants from proceeding with a reference to adjudication started by a Notice of Adjudication dated 14 October 2014. Mr. Gideon Scott Holland, instructed by Davies & Davies, appeared for the Claimant, and Mr. Charles Pimlott, instructed by Silver Shemmings, appeared for the Defendants.
The application was made initially on two grounds:
i) that the Defendants have acted unreasonably and/or oppressively by pursuing the adjudication without first complying with the Decision dated 6 October 2014 in a previous adjudication ("the third adjudication") between the parties; and
ii) that the adjudicator appointed in the new (fourth) adjudication does not have jurisdiction to decide the dispute referred to him because that dispute is the same or substantially the same as that already decided in the previous adjudication.
By a letter dated 27 October 2014 Silver Shemmings notified Davies & Davies that their clients would not be defending the application to enforce the decision in the third adjudication. However, they said that their clients needed to put arrangements in place in order to find the money and they asked the Claimant to extend the time for payment until 3 November 2014.
This offer, although made after the Claimant's application had been issued, has largely undermined the Claimant's first ground for making this application. However, Mr. Scott Holland expressed concern that the Defendants might not make the promised payment and wished to reserve his client's position. In relation to the first ground, the application is stayed, with permission to apply.
When I had heard submissions from both parties I reached the conclusion that there was clearly a triable issue and that the balance of convenience favoured granting a short interim injunction until 4 November 2013. A few days' delay would make little difference and it might avoid the need for the Claimant to spend time and money preparing a Response in the fourth adjudication were I to grant the relief sought by the Claimant. Accordingly, I granted interim relief on that basis.
The facts
The Claimant is a building contractor and at all material times the Defendants were property developers.
The parties entered into a building contract dated 25 March 2013 in the form of the JCT Intermediate Form of Building Contract 2011 with amendments ("the Contract"). The Claimant undertook to carry out the construction and fit out of two residential houses together with related landscape and access works at a site in Purley, Surrey. Work commenced in April 2013.
The Contract provided for the right to refer a dispute or difference to adjudication in accordance with the Scheme for Construction Contracts.
The relationship between the parties deteriorated and, by a letter dated 18 September 2013, the Defendants purported to terminate the Contract, alleging a failure to proceed regularly and diligently with the works, and a refusal to accept the Defendants' choice of Contract Administrator and refusal of access to the site.
In response, the Claimant rejected the Defendants' right to terminate and argued that his work was actually ahead of schedule. His case was that he was being prevented from making progress by the Defendants' failure to make a valid appointment of a replacement architect and/or, from about mid June 2013 onwards, to provide the required design information.
By the end of September 2013 work had come to a standstill. On 30 November 2013 the Claimant gave the Defendants notice pursuant to clause 8.9.2.2 of the Contract that the works had been suspended because of the Defendants' failure to appoint a replacement Architect/Contract Administrator and to provide the design information necessary to continue with construction beyond wall plate level. In the same letter the Claimant gave the Defendants notice pursuant to clause 8.9.3 that they had 14 days in which to cease the suspension, otherwise the Claimant would be entitled within 21 days from the expiry of that 14 days to terminate its employment under the Contract.
On 3 January 2014 the Claimant served notice of termination of its employment under the Contract pursuant to clause 8.9.3.
By the terms of clause 8.12.3 of the Contract, following termination by the contractor he was entitled to submit an account setting out the value of the work carried out, including the total value of the work properly executed up to the date of termination, the cost of removal from site and any direct loss or damage.
The Claimant duly submitted his account to the Defendants under that clause on 8 August 2014. In that account the value of the works carried out up to the date of termination was said to be £797,859.49, and the balance owing taking into account sums already paid was £397,912.48 plus VAT.
Under clause 8.12.5 the Defendants were obliged to pay the amount properly due in respect of the account within 20 days of its submission. That was by 6 September 2014.
The Claimant's case is that if the Defendants wanted to pay less than the amount stated in the account, they had to issue a Pay Less notice in accordance with the requirements of paragraphs 9 and 10 of the Scheme for Construction Contracts, and that the latest date for serving a Pay Less notice is seven days before the final date for payment. On this basis, according to the Claimant, a Pay Less notice had to be served by the Defendants by 30 August 2014. In addition, the Pay Less notice had to set out the sum that the payer considers to be due and the basis on which that sum is calculated.
The third adjudication
This was commenced by Notice of Adjudication dated 1 September 2014. The Notice, given by Blue Sky ADR who were acting for the Claimant, was in the following terms:
"Accordingly, on behalf of [the Claimant] we hereby give notice pursuant to clause 9.2 of the Contract of [the Claimant's] intention to refer, and hereby do refer, the dispute between [the Claimant] and you, the Employer, concerning [the Claimant's] clause 8.12 Contractors Account dated 8 August 2014 which you rejected '… in its entirety …' under cover of PJ English Associates Ltd's letter dated 18 August 2014.
We shall request the Adjudicator to make the following declarations and give the following decisions:
1. A declaration that after taking into account amounts actually and physically previously paid to [the Claimant] under the Contract the amount properly due to [the Claimant] in respect of the account and that shall be paid by you to [the Claimant] on or before 6 September 2014, without deduction of any retention, (or any other sum for that matter), shall be the sum of £397,912.48 or such other sum as the Adjudicator shall decide;
2. A decision that you shall pay [the Claimant] the sum of £397,912.48 being the outstanding sum under the Contract or such other sum as the Adjudicator shall decide;
…"
In his decision, dated 6 October 2014, the adjudicator noted that in order to determine whether or not the Claimant was entitled to the sum claimed it was necessary to decide who terminated the Contract.
The adjudicator made a number of observations about the volume of material that been put before him, including hundreds of pages of authorities, and particularly the fact that much of it came in electronic form when he had asked for hard copies. He also noted that the Claimant refused to extend the time period for his decision, from 28 to 42 days. He said that the reason given for this refusal was because the adjudication was "an open and shut matter" about the failure to...
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