Mott Macdonald Ltd v London & Regional Properties Ltd
| Jurisdiction | England & Wales |
| Judge | HH Judge Thornton QC,Judge Thornton QC |
| Judgment Date | 23 May 2007 |
| Neutral Citation | [2007] EWHC 1055 (TCC) |
| Docket Number | Case No: HT-07–29 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 23 May 2007 |
[2007] EWHC 1055 (TCC)
IN THE HIGH COURT OF JUSTICE
Technology and Construction Court
St Dunstan's House,
131 – 137 Fetter Lane,
London,
EC4A 1HD
Hh Judge Thornton QC
Case No: HT-07–29
Mr Alexander Nissen QC (instructed by Shadbolt & Co LLP, Chatham Court, Lesbourne Road, Reigate, Surrey, RH2 7LD, DX 30402, Reigate-1, mail@shadboltlaw.com, Ref: MRD/SC/KET/2716.1/432327.1) for the claimant.
Mr Hamish Lal, Solicitor Advocate (Dundas & Wilson LLP, Northwest Wing, Bush House, Aldwych, London, WC2B 4EZ, DX 127 LDE, Hamish.Lal@dundas-wilson.com Ref: HL/EB.LON016.0243) for the defendant.
Hearing dates: 1 March 2007 followed by written submissions
Judge Thornton QC
The claimant, Mott MacDonald Ltd (“MM”) is a specialist engineering multi-disciplinary consultancy providing services to the construction industry and the defendant, London & Regional Properties Ltd (“LRP”) is a property developer. LRP is developing a business park at Park Royal, London known as First Central Park and MM undertook professional services as Highways and Transport Engineers in relation to the planning and engineering design for the phase 2 infrastructure works for this development, particularly in relation to the necessary planning application and the subsequent detailed engineering design work for various roadworks and bridges, necessary negotiations and liaison with interested parties and site supervision. These services were carried out between December 1997 and February 2006. MM continued thereafter to carry out professional services in relation to this development.
A dispute arose as to the non-payment of invoiced fees that had been earned in the period January 2003 until February 2006. The total sum claimed, exclusive of VAT, was £62,767.52. LRP had declined to pay these sums due to disagreements as to whether MM was entitled to claim fees on the grounds that the formal agreement providing for MM's consultancy services on this project had not been finalised and executed and because, at the time that the dispute crystallised into a formal adjudication claim, that it might have a set off. However, since no proper withholding notices had been served, the dispute related entirely to whether MM had a contractual entitlement to claim fees and, if so, on what basis.
MM served an adjudication notice dated 25 October 2006 and on 26 October 2006 applied to the RICS to appoint an adjudicator under the construction contract it was contending governed the parties' contractual relationship or under the Scheme for Construction Contracts (England and Wales) Regulations 1998 if there was no contractual adjudication clause in existence. An adjudicator was appointed by the RICS on 31 October 2006. LRP raised a jurisdictional challenge which the adjudicator was not prepared to accede to and, following an agreed extension of the time by which he had to reach his decision until 13 December 2006, the adjudicator issued to the parties a decision dated 13 December 2006 which MM and LRP received by post on 14 December 2006. That decision provided for the payment in full of MM's claim within 7 days of the date of the decision but it declined to direct payment of MM's claims for contractual interest. The decision directed that 90% of the adjudicator's fees, totalling £8,803.69 should be paid by LRP and the balance by MM. Since MM had already paid the entire sum invoiced by the adjudicator to him, the decision directed that LRP should reimburse MM that sum. LRP has declined to pay MM the directed sum or the share of the adjudicator's fees it was directed to pay and, in a claim form issued on 30 January 2007, MM now seeks summary judgment of these sums plus interest by way of enforcement of the decision.
The basis on which enforcement is resisted was only finally and clearly established in the detailed written submissions that I directed should be served following the brief one hour oral hearing. This procedure was adopted because the claim is for a relatively small sum but the enforcement issues were complex and only one hour had been fixed for the hearing. This time estimate was inadequate and the hearing would have had to have been adjourned part heard to a different day had written submissions not been directed as an alternative. The parties' advocates are to be commended for the quality and clarity of the written and oral submissions that they provided before, during and following this brief hearing.
Issues
The challenge to the enforcement application is in two parts, being in part a jurisdictional challenge relating to the adjudicator's alleged lack of jurisdiction when appointed and, in part, a procedural challenge relating to the timing of the delivery of his decision to the parties.
The jurisdictional issues are, on analysis, multi-layered. The first two issues were whether there was a contract at all (issue 1) and, if there was, whether it was it a construction contract (issue 2). The principle issue, raised by LRP, was, assuming that there was a construction contract, whether it was in writing as defined by section 107(2) of the Housing Grants Construction and Regeneration Act (“ HGCRA”) so as to make Part II of the HGCRA applicable (issue 3). If section 107(2) was not applicable, an issue arose as to whether section 107(5) of the HGCRA was applicable (issue 4). Finally, if section 107 did not provide the necessary statutory foundation for the adjudication, MM contended that LRP had nonetheless voluntarily submitted to the jurisdiction of the adjudicator (issue 5) and that the decision of the adjudicator that he had jurisdiction is now unreviewable since the relevant findings were made by the adjudicator within his jurisdiction (issue 6).
The procedural issues can be sub-divided into four sub-issues. Firstly, was the adjudicator entitled to impose a pre-condition on the delivery of his decision to the parties that his fees should first be paid by the referring party (issue 7)? Secondly, when did the adjudicator reach his decision (issue 8)? Thirdly, was a copy of the decision delivered to each of the parties as soon as possible after it had been reached (issue 9)? Fourthly, what is the effect on the validity and enforceability of the decision of the answers given to issues (7)—(9) (issue 10)?
Jurisdictional Challenges
Factual Background
The first contact between LRP and MM occurred in November 1997 when LRP invited MM to submit a proposal for its appointment to provide professional services in relation to the new business park being planned at Park Royal, London. The appointment was to be in connection with the intended planning application for the infrastructure works which would involve a significant highways and traffic element. MM's proposal was submitted in a letter dated 3 December 1997. No formal contract resulted but professional services were provided and invoiced by MM and paid for by LRP. Whatever the precise contractual relationship was between the parties during this phase of the design work, that contract came to an end once MM's planning permission services were completed.
By a letter dated 4 November 1998, LRP's consultants sent MM a request to provide a proposal for engineering consultancy services in respect of the detailed design and supervision stages of the project, being Phase 2 of the infrastructure works. MM submitted a detailed proposal which split the assumed work into three elements, being the design of the infrastructure roadworks and bridges, the negotiations with the various interested parties in relation to planning, highways and railways agreements and site supervision. The letter made it clear that it would be necessary to define elements of work and the scope of MM's services more precisely at a later stage. It was not clear at that stage whether MM would be engaged by LRP or by the contractor, when appointed, to provide similar design services under a design and build contract arrangement. Different forms of contract were proposed depending on which contracting arrangement was ultimately settled upon.
Planning for this phase of the pre-construction work developed somewhat slowly. Thus, on 6 April 1999, MM sent LRP's consultants a document entitled Scope of Services for Detailed Design of The Highways Works. On 14 May 1999, LRP's former solicitors sent MM a proposed appointment document. No schedule of services was appended since these remained to be compiled and agreed. The document was stated to be applicable only to the first of the three phases of the works, being the infrastructure roadworks but as also being the likely document for any other phase undertaken by MM.
MM sent LRP's consultants a preliminary fee profile for this proposed appointment on 6 July 1999. The letter stated that a full fee profile could be developed once the scope of works had been better defined and it would also need reviewing once other changes to structural elements had been finalised. A further fee profile was produced dated 6 August 1999 which was sent to the consultants with a letter dated 20 September 1999.
On 28 September 1999, the consultants sent MM a letter entitled “Letter of Intent: Highways and Transport Engineers”. This was clearly a reference to the proposed engagement to provide engineering consultancy services that had been sent to MM on 4 November 1998. The letter stated that it was the confirmation of LRP's instruction for MM to commence and proceed with the Works pending final agreement and execution of the Contract. The Works were defined as “the Highways and Engineers services for Phase 2 of the infrastructure works” and the scope of the works was stated to be identified in the bid letter dated 4 November 1999 and MM's proposal dated 26 November 1999 and its two...
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