MG Scaffolding (Oxford) Ltd v Palmloch Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Adam Constable |
| Judgment Date | 09 July 2019 |
| Neutral Citation | [2019] EWHC 1787 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2019-000164 |
| Date | 09 July 2019 |
[2019] EWHC 1787 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Rolls Building,
Fetter Lane
London, EC4A 1NL
Mr Adam Constable QC
Case No: HT-2019-000164
Gideon Shirazi for the Claimant
Simon Arnold (instructed by Preston & Co. Law Firm Limited) for the Defendant
Hearing date: 1 July 2019
Approved Judgment
Mr Adam Constable QC:
This is an application for summary judgment to enforce an adjudicator's decision. The central issue for determination is whether the adjudicator lacked jurisdiction in circumstances where the adjudication was commenced, and pursued, by the Claimant, MG Scaffolding (Oxford) Limited (‘ MGS’) as Referring Party, against a Responding Party named ‘MCR Property Group’ (‘ MCRPG’), a trading name, and where, as MGS now accepts, the correct contractual counterparty is a company called Palmloch Ltd (‘ Palmloch’), the Defendant to this action.
The Court has been provided with the witness statements of Mr Peter Cooper on behalf of MGS and Mr Martin Brown on behalf of Palmloch.
Background to the Adjudication
In 2017, Mr Binfield, then employed by a scaffolding company called Craven Scaffolding Ltd, was asked by a Mr Warren Lewin to provide a quote for a scaffolding scheme, which he did in the sum of £38,154.00. Mr Lewin's email address ended ‘@mcrproperty.com’. This quotation was sent to Mr Warren Lewin at ‘MCR Property Group’ at an address at Universal Square, Manchester. A Purchase Order was subsequently raised, dated 3 October 2017. The PO was headed ‘Palmloch Limited’, and a reference given ‘ Palm/016’. The PO stated: ‘ Please invoice to:- Palmloch Limited’, with the same postal address as that to which the quotation for MCRPG had been sent. At the foot of the invoice, was stated ‘Head Office: Palmloch Ltd….’ with the same Universal Square address.
Mr Binfield subsequently moved to MGS, and on 21 February 2018, Ms Phillips of MGS emailed a quotation reference PC5953 in the same sum of £38,154, now on MGC paper, to Mr Lewin. On 23 February 2018, Mr Lewin emailed to ask if MGS could start on 5 March. MGS alleges it started work on 5 th March 2018 pursuant to the instruction.
On 8 March, 2018, the previous PO was re-issued, with ‘Craven Scaffolding Ltd’ deleted and MG Scaffolding inserted in manuscript. This PO was still, therefore, in the name of Palmloch. The covering email from Mr Lewin (‘@mcrproperty.com’) stated
‘ This is a copy of the original PO, it will be the same number, so please make sure your accounts include this on the invoices and also note the company that needs invoicing, as any mistakes will delay payment.’
Mr Brown suggests that MGS commenced work on 12 March 2018, rather than 5 March 2018.
Invoices were presented, as requested, to Palmloch. Various communications during the course of the works took place with Mr Lewin emailing from his ‘@mcrproperty.com’ email address.
Both sides agree in these proceedings that the correct parties to the scaffolding contract were MGS and Palmloch. I note that, although the question of the correct parties is no longer in dispute, there nevertheless remains a disagreement between the parties about precisely how the contract was formed, which may affect whether or which standard terms apply. That is not a matter which either side has invited the Court to express view about in this Judgment, and I do not do so.
During the project, disputes arose between the parties. In October and November 2018 there were email communications between Mr Cooper of MGS and Mr Brown of Palmloch about these disputes.
The Adjudication
On 7 December 2018, MGS commenced an adjudication against ‘MCR Property Group’ by Notice of Adjudication. This was sent by email from MGS to Mr Brown of Palmloch. The Notice alleging that the contract had been formed by (a) the provision of the quotation on 21 February 2018 and (b) the acceptance and instruction to commence work by email of 23 February 2018.
The entitlement to payment was based upon the absence of a valid pay less notice following an application for payment. MGS sought payment of the sum it claimed to be outstanding by reason of the non-valuation of its application, rather than upon any substantive investigation into entitlement.
The Adjudicator was appointed on 10 December 2018 by the RICS. The Referral Notice was served on 14 December 2018.
On 17 December 2018, a letter with an ‘MCR’ logo and footed with ‘ MCR Property Group is a trading name of MCR Management Limited’, was sent from Mr Brown to the Adjudicator. It contended that:
‘ MCR Property Group does not recognise any claim or issue requiring resolution from an adjudicator. MCR Property Group is no more than a brand name and holds no assets of its own. MCR Property Group has no debt outstanding with the referring party. Any claim, if any, requiring adjudication or dispute resolution should be directed towards the company whom the referring party has a dispute’.
The letter did not suggest that the proper responding party to (any) claim was Palmloch.
This was taken to be a jurisdictional challenge by the Adjudicator and MGS was given until 19 December 2018 to provide a response. MGS responded that ‘ the only conclusion that can be drawn from the above is that MCR Property Group and MCR Management Limited are effectively one and the same’. MGS no doubt took the reference in the letter to MCRPG being a trading name without assets in conjunction with the footer, and assumed that the assertion being made was that MCR Management Limited, rather than MCRPG, was the proper Responding Party. MGS indicated that it was prepared to re-issue, substituting the two names for MCR, but that this would be a waste of time. It did not do so.
The Adjudicator indicated that his non-binding view was that he was not persuaded by the Responding Party's challenge to jurisdiction, and that he would proceed to make a decision.
By letter dated 21 December 2018, Mr Brown again on MCR headed paper stated that,
‘ MCR Property Group is not the correct Responding Party. MCR Property Group is a trading name. The contracting party is Palmloch Limited, and in the event that the notice of adjudication is amended into the name of the correct Responding Party (Palmloch Limited), Palmloch Limited will serve a substantive response to the notice of adjudication. The correct Responding Party must be determined prior to the adjudication.’
In its Reply, MGS re-asserted that the contract was between it and MCRPG, on the basis of the quotation and the email response, and that MCRPG was a trading name for MCR Management Limited (as had been indicated on the footer to the MCR stationary), and not Palmloch. It contended in terms that the purchase order was sent from MCR Property Group and was issued after the works, and was irrelevant. Following receipt of the Reply, the Adjudicator asked various questions.
Both parties responded. Mr Brown, on MCR paper (with no footer indicating that MCRPG was a trading name for MCR Management Limited, this time) re-iterated that neither MCR Management Limited nor MCR Property Group were the correct counterparty and that:
‘ In the event that a decision is made against MCR Management Limited or MCR Property Group, the jurisdiction will be strongly challenged in any subsequent enforcement proceedings. Furthermore, in the event that a claim or adjudication notice were to be issued against Palmloch Limited, Palmloch Limited will serve a substantive defence to those proceedings.’
On 7 January 2018, the Adjudicator indicated a non-binding view that the true contracting party was Palmloch but that the party named in the Notice of Adjudication, ‘MCR Property Group’ could reasonably be construed to be the Responding Party on the basis that it was asserted by Palmloch that it was a trading name for Palmloch.
Shortly thereafter, a Mr Eades wrote to the Adjudicator on Palmloch Limited headed paper:
‘ In the circumstances and in view of your apparently [sic] decision to construe the Responding Party as Palmloch Limited, we believe it would be unjust for you to reach a decision (against Palmloch Limited) without first allowing Palmloch Limited sufficient time to issue a substantive response to the Notice of Adjudication. We therefore request a period of 14 days from the date of this letter to submit the said substantive response. In the event that you do not agree to this request, please note that Palmloch Limited will challenge the jurisdiction (in any subsequent court proceedings) of any decision made against it’.
The Adjudicator acceded to the request to permit Palmloch to submit a substantive response, albeit Palmloch was given 3 days to do so. The direction was complied with, and on 11 January 2019, by a letter from Mr Brown in a letter with the MCR logo, Mr Brown provided substantive submissions as to why it considered that MGS did not have a valid payee notice and that the amount did not present a notified sum that must be paid. The letter started by reaffirming ‘ our position that this adjudication has been commenced against the incorrect party and that your jurisdiction in this matter is invalid’. The letter did not suggest that the truncation of the time requested to provide a substantive response was prejudicial in any way, or a breach of natural justice (and such a claim would have been inappropriate). No point is taken in these proceedings that Palmloch did not, in the event, in fact have the opportunity of presenting a substantive defence to the issues raised.
The Parties Contentions
MGS contend that whether or not the Adjudicator has jurisdiction is determined by the service of the Notice of Adjudication. That should be construed broadly and flexibly, avoiding a strict or...
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