Mr Emile Lobo v Mr Robert Corich
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stuart-Smith |
| Judgment Date | 21 June 2017 |
| Neutral Citation | [2017] EWHC 1438 (TCC) |
| Date | 21 June 2017 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2016-000359 |
[2017] EWHC 1438 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Stuart-Smith
Case No: HT-2016-000359
HT-2017-000076
Mr Riaz Hussain QC (instructed by Gordon Dadds LLP) for Mr Emile Lobo
Mr Jeffrey Gruder QC & Mr Jeremy Brier (instructed by Osborne Clarke LLP) for Mr Robert Corich
Hearing date: 7 June 2017
Introduction
There are two related actions and two related applications before the Court. They arise from a dispute under a contract to carry out building works that was made in writing on 19 May 2010.
The first action was issued by Mr Lobo (to whom I shall refer throughout as the Claimant) after a notice of termination had been sent on his behalf to Mr Corich (to whom I shall refer as the Defendant) in April 2014 and a certificate issued in February 2016 certifying sums due from the Defendant to the Claimant. When the certified sums were not paid, the Claimant referred the dispute to adjudication under the Scheme. In October 2016, the Adjudicator provided his decision, which was that the Defendant should pay the certified sums to the Claimant. When those sums were not paid, the Claimant issued his action (HT-2016-00359) on 23 December 2016 to enforce the adjudicator's decision. On 9 February 2017 Jefford J gave summary judgment in favour of the Claimant for £630,022.66 plus indemnity costs of £30,811.00. On 28 February 2017, Coulson J made an interim charging order on 25 Gunter Grove, London SW10, a property of which the Defendant is the registered owner. The Claimant now applies for the interim charging order to be continued. That is the first application before the Court.
The Defendant took no part in either the adjudication process or the claimant's action until March 2017, when he instructed solicitors to act on his behalf. On 27 March 2017 the Defendant's solicitors took two procedural steps. First, they issued a Part 8 Claim (HT-2017-000076) claiming to set aside the adjudication decision on which the Claimant's claim in his action is founded. Second, they issued an application in the Claimant's action requesting that (i) the order of Jefford J be set aside; (ii) the interim charging order of Coulson J be set aside; alternatively (iii) there be a stay of execution pending the outcome of his application to set aside the order of Jefford J and/or the outcome of his Part 8 claim to set aside the Adjudication Decision on which the Claimant's Action is founded. That is the second application before the Court.
The basis of the Defendant's opposition to the Claimant's application for the charging order to be continued and his claim that the adjudication decision and the order of Jefford J should be set aside appears from the Defendant's Claim Form. It is that:
"… The Adjudication Decision was reached in breach of principles of natural justice, was procedurally unsound and unfair, in that it proceeded in the absence of the [Defendant] and without the [Defendant] ever having been made aware of any aspect of the Adjudication such that he played no part in it and could not put forward his case on the merits. …"
The present hearing was to resolve these applications. In support of his position, the Defendant had submitted a witness statement asserting that he had no knowledge of the Adjudication or the Claimant's Action until he was informed of the interim charging order by another mortgagee on or about 1 March 2017. Since this assertion was not accepted by the Claimant, the Defendant was called to give evidence and was cross-examined. I shall comment on his evidence later in this judgment when dealing with the factual background.
The issues as they stood at the end of the hearing can be summarised as being:
i) Was the Defendant aware of the adjudication proceedings or the Claimant's proceedings?
ii) Were the adjudication proceedings properly constituted with due notice being given to the Defendant?
iii) Were the Claimant's proceedings duly served on the Defendant?
iv) In the light of the answers to questions (i) to (iii):
a) Should the adjudication decision be set aside?
b) Should the judgment of Jefford J be set aside?
c) Should the charging order be set aside?
For the reasons set out later in this judgment, I find in favour of the Claimant on both applications and answer the questions posed in [6(iv)] above: No.
The Factual Background
The Defendant describes himself as a music publisher and property developer. He draws no distinction between property development and contracting to carry out building works for other people. He lives a relatively peripatetic lifestyle, having property both in the United States and in the United Kingdom and travelling frequently between those and other countries. He gave evidence in cross-examination about where he would either stay or live from time to time. I accept and bear in mind the submission of Mr Gruder QC that the Defendant travels a lot and has an association with a number of properties both here and abroad. Ultimately, Mr Gruder did not quarrel with a description of the Defendant as an educated and intelligent businessman. His conduct falls to be considered in that light.
The Contract
The contract between the Claimant and the Defendant was made in writing on 19 May 2010 on the terms of the JCT Intermediate Building Contract, Revision 2 2009, which the parties signed. The parties were Dr C. E. Lobo and the Claimant as the Employer and the Defendant as the Contractor. The Defendant's address was given in the Articles of Agreement as 7 Gunter Grove, London SW210 0UN. The Contract Sum was £683,000; the Architect was Mr Nicholas Blythe; the Base Date was 30 January 2010; and the date for completion of the works was "60 weeks".
Clause 1–7 of the Contract Form provided:
1. Any notice or other communication between the Parties, or by or to the Architect/Contract Administrator or Quantity Surveyor, that is expressly referred to in the Agreement or these Conditions (including without limitation, each application, approval, consent, confirmation, counter-notice, decision, instruction or other notification) shall be in writing.
2. Subject to clause 1.7.4, each such notice or other communication and any documents to be supplied may or (where so required) shall be sent or transmitted by the means (electronic or otherwise) and in such format as the Parties from time to time agree in writing for the purposes of this Contract.
3. Subject to clauses 1.7.2 and 1.7.4, any notice, communication or document may be given or served by any effective means and shall be duly given or served if delivered by hand or sent by pre-paid post to:
— 1 the recipient's address stated in the Contract Particulars, or to such other address as the recipient may from time to time notify to the sender: or
— 2 if no such address is then current, the recipient's last known principal business address or (where a body corporate) its registered or principal office.
4. Any notice expressly required by this Contract to be given in accordance with this clause 1.7.4 shall be delivered by hand or sent by Recorded Signed for or Special Delivery post. Where sent by post in that manner, it shall, subject to proof to the contrary, be deemed to have been received on the second Business Day after the date of posting.
Clause 8.4 of the Contract Form provided:
"-1 If, before practical completion of the Works, the Contractor:
1. …
5. fails to comply with clause 3.18,
The Architect/Contract Administrator may give to the Contractor a notice specifying the default or defaults (the 'specified default or defaults').
— 2 If the Contractor continues a specified default for 14 days from receipt of the notice under clause 8.4.1, the Employer may on, or within 21 days from, the expiry of that 14 day period by a further notice to the Contractor terminate the Contractor's employment under this Contract."
Clause 8.7 of the Contract Form provided:
"If the Contractor's employment is terminated under clause 8.4, …:
.1 the Employer may employ and pay other persons to carry out and complete the Works and to make good any defects …;
…
.4 within a reasonable time after the completion of the Works and the making good of defects …, an account of the following shall be set out in a certificate issued by the Architect/Contract Administrator or a statement prepared by the Employer:
— 1 the amount of expenses properly incurred by the Employer, …;
— 2 the amount of payments made to the Contractor, and
— 3 the total amount which would have been payable for the Works in accordance with this Contract;
5. if the sum of the amounts stated under clauses 8.7.4.1 and 8.7.4.2 exceeds the amount stated under clause 8.7.4.3, the difference shall be a debt payable by the Contractor to the Employer or, if that sum is less, by the Employer to the Contractor.
Clause 8.2.3 provided that notices under section 8 should be given in accordance with clause 1.7.4. Accordingly, notice of breach under clause 8.4.1 and notice of termination under clause 8.4.2 had to be delivered by hand or sent by Recorded Signed for or Special Delivery post.
There was provision for Adjudication, it being common ground that the Scheme applies; and there was an arbitration clause, it being common ground that there is no arbitration on foot.
It was the Defendant's evidence that the contract with the Claimant was the first time that he had used the JCT Intermediate Form of Contract. He said that he flipped through the contract early on but did not read it in any detail until later. Specifically, he said that he did not read Clause 8.7 until March 2017. Whether...
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