Mr Christopher Shaw and Mrs Gabriele Shaw v Mfp Foundations and Pilings Ltd
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE EDWARDS-STUART |
| Judgment Date | 23 July 2010 |
| Neutral Citation | [2010] EWHC 1839 (TCC) |
| Date | 23 July 2010 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-1074 |
[2010] EWHC 1839 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Before: THE HONOURABLE MR JUSTICE EDWARDS-STUART
Case No: HT-1074
Mrs Gabriele Shaw (instructed by Knights Solicitors) for the Claimant
Mr Richard Bradley (instructed by C. E. Law) for the Defendant
Hearing date: 14 July 2010
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.
The Hon Mr Justice Edwards-Stuart:
Introduction
This is an arbitration claim. By a Claim Form issued on 5 March 2010 the Claimants (“Mr and Mrs Shaw”) seek permission to appeal an award of an arbitrator, Mr Anthony Bingham, made on 30 November 2009 (Award No 2) under section 69 of the Arbitration Act 1996, and to challenge the award under section 68 of the Act. Mr and Mrs Shaw also seek an extension of time for lodging the claim form.
Since the appeals are made under both sections 68 and 69 of the Act, by an order made on 25 March 2010, I directed that the matter should be listed for hearing on 14 July 2010 for a full day in order to determine the application for the extension of time, the application for permission to appeal and the appeal under section 68 unless there was an application by the Defendant (“MFP”) for the question of the extension of time to be dealt with separately. There was no such application. In the circumstances I decided to order, without objection from either of the parties, that this arbitration claim should be heard in public pursuant to CPR 62.10.
I should mention that in the event that the applications by Mr and Mrs Shaw are successful MFP indicated that it would seek permission to appeal Award No 1 and an extension of time within which to do so.
This dispute arises out of a Minor Works Contract dated 27 April 2007 by which MFP agreed with Mr and Mrs Shaw to perform works of extension, repair and conservation to the East Lodge of Great Moreton Hall, Cheshire, for £168,253 in accordance with specifications, schedules of works and drawings prepared by an architect, Mr John Carter, employed by Mr and Mrs Shaw (Mr Carter is described in the contract as the Adviser). His role was similar to that of the typical architect in that he was responsible for issuing further information and instructions, inspecting the work in progress and had the power to reject work not in accordance with the contract.
At the hearing before me Mr and Mrs Shaw were represented by Mrs Shaw, who is a qualified but non-practising barrister, and MFP was represented by Mr Richard Bradley. The cases on both sides were argued succinctly, given the amount of detail involved, and with realism. Both sides provided very helpful skeleton arguments.
The application by Mr and Mrs Shaw under section 68 of the Act was made under section 68(2)(d) on the ground that the arbitrator failed to deal with all the issues that were put to him. The issues that Mr and Mrs Shaw say were not dealt with can be summarised as follows:
(1) The arbitrator failed to consider whether the liquidated damages provision in the contract (which provided for liquidated damages of £Nil) survived the repudiation of the contract by MFP and whether, in consequence, Mr and Mrs Shaw were entitled to recover the costs of the delay in carrying out the works.
(2) The arbitrator failed to consider whether or not there should be a substantial deduction in the preliminaries claimed by MFP in respect of services that were not provided, such as the requirement to have a competent foreman on site at all times.
(3) The arbitrator failed to consider the defects in the new external oak patio French windows supplied by MFP (but ultimately not installed by them). The defects consisted of splits in the oak uprights of the doors.
(4) When considering the claim for prolongation by MFP the arbitrator failed to make a deduction in the sum claimed for preliminaries to reflect the fact that certain services were not provided, ought to have taken into account the absence of any extensions of time granted by the architect and, finally, failed to address the question of whether it was fair, when considering MFP's claim for prolongation, to allow MFP to recover prolongation costs whilst denying Mr and Mrs Shaw any entitlement to liquidated damages.
(5) The arbitrator failed to take into account certain items claimed in respect of the costs of completing the work incurred by Mr and Mrs Shaw. Further, it is alleged that the arbitrator's approach to valuation was wrong in that he should have allowed Mr and Mrs Shaw to recover any costs reasonably incurred in order to complete the works, rather than the reasonable cost of completing the work that was not fully carried out.
In the alternative to the last point set out above, Mr and Mrs Shaw submit that the arbitrator's approach to the question of the proper measure of damage for MFP's failure to complete was obviously wrong so that his Award No 2 should be set aside on an appeal under section 69 of the Act.
It will be apparent at once from this brief introduction that on analysis some of the points raised under section 68 may amount to errors of law so that any appeal should have been made under section 69, rather than section 68.
The work started in late April 2007 and the contractual completion date was 10 October 2007. For various reasons, most of them in issue before the arbitrator, the work was delayed and in early February 2008 Mr and Mrs Shaw terminated the contract. Their reason for doing so was MFP's refusal to replace some defective stone windows, which had become damaged in the course of transport or installation, instead of repairing them as MFP proposed. By his Award No 1 the arbitrator decided that MFP's failure or refusal to replace the defective stone windows amounted to a repudiatory breach of contract which was accepted by Mr and Mrs Shaw on 8 February 2008.
In addition to the problems with the stone windows, Mr and Mrs Shaw complained of the fact that MFP did not keep a competent foreman on site at all times as the contract required, of delays in carrying out the work and of numerous defects in the works. In addition, they claimed the cost of completing the work that was not carried out or of rectifying defects in the work that was carried out.
By his Award No 2, the arbitrator decided that a balance of £44,190.37 was due to MFP, to which he added £3,519.26 by way of interest, making a total sum payable within 14 days of the Award of £47,509.97. In addition, he held that MFP should have completed the work by Christmas 2007, and that they were entitled to an extension of time up to then from 10 October 2007 with loss and expense.
I attach as an appendix to this judgment a chronology of the relevant events which tells the story of this unhappy project. It is based substantially on the chronology contained in Mr Bradley's skeleton argument, but I have removed those parts which are contentious or might be thought to be tendentious.
Sections 68 and 69 of the Arbitration Act 1996
At this point I should summarise the relevant provisions of the Act. Section 68 provides as follows:
“1. A party to arbitral proceedings may…apply to the Court challenging an award in the proceedings on the grounds of serious irregularity affecting the tribunal, the proceedings or the award…
2. Serious irregularity means an irregularity of one or more of the following kinds which the Court considers has caused or will cause substantial injustice to the applicant
(a) Failure by the tribunal to comply with Section 33 (general duty of the tribunal)…
(d) Failure by the tribunal to deal with all the issues that are put to it.”
Section 69 provides:
“(1) …a party to arbitral proceedings may…appeal to the Court on a question of law arising out of an award made in proceedings…
(2) An appeal should not be brought under this action except…
(b) With leave of the Court;
The right to appeal is also subject to the restrictions in Section 70(2) and (3).
(3) Leave to appeal shall be given only if the Court is satisfied
(a) That the determination of the question will substantially affect the rights of one or more of the parties;
(b) That the question is one which the Tribunal was asked to determine;
(c) That on the basis of the findings of fact in the award
(i) The decision of the tribunal on the question is obviously wrong or
(ii) The question is one of general public importance and the decision of the tribunal is at least open to serious doubt and
(d) That, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the Court to determine the question…
(5) The Court shall determine an application for leave to appeal under this section without a hearing unless it appears to the Court that a hearing is required.”
So under section 68(2)(d) the court must be satisfied that there has been a failure by the tribunal to deal with all the issues that were put to it and that this failure has caused or will cause substantial injustice to the applicant.
Under section 69 an appeal can only be brought either with the agreement of all of the other parties to the proceedings or with the leave of the court. In this case Mr and Mrs Shaw seek the permission of the court. It will be apparent that, so far as material to this case, the section provides that leave to appeal shall be given only if the court is satisfied (a) that the determination of the question will substantially affect the rights of one or more of the parties, (b) that the...
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