Mylcrist Builders Ltd v Buck
| Jurisdiction | England & Wales |
| Judge | THE HON.MR.JUSTICE RAMSEY |
| Judgment Date | 19 September 2008 |
| Neutral Citation | [2008] EWHC 2172 (TCC) |
| Docket Number | Case No: HT-08-15 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 19 September 2008 |
[2008] EWHC 2172 (TCC)
The Hon.Mr.justice Ramsey
Case No: HT-08-15
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
David Mallinson (of Girlings, Solicitors) for the Claimant
Mrs Buck appeared in person
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.
Approved Judgment
The Honourable Mr Justice Ramsey:
Introduction
This is an application by the Claimant under s.66 of the Arbitration Act 1996 seeking permission to enforce an arbitration award dated 1 February 2007 (“the Award”). The background to that award is as follows.
In 2004 the Defendant, Mrs Buck, decided to have a single story extension built to the front of a bungalow in Beltrise Herne Bay, Kent. The extension was to provide a bed room and bathroom for Mrs Buck's disabled father. She, herself, is now a pensioner.
Mrs. Buck engaged Peter Jackson Architects (“the Architect”) in Whitstable to prepare a design. They produced two drawings which showed the floor plans and elevations of the existing bungalow and the proposed extension, together with details of the work to be done.
Mrs Buck contacted Mr Geoff Mylcrist of the Claimant, Mylcrist Builders Limited of Whitstable. She provided him with the Architect's drawings. He produced an estimate on 2 December 200On 7 December 2004 he wrote to Mrs Buck to say “We confirm your order to proceed with works as described in our estimate of 2 December … and revert as follows”.
The letter of 7 December contained seven paragraphs with a number of sub-paragraphs in each. On the third page it stated “Please sign and return the enclosed copy of this revised letter to our office as soon as possible to confirm your order so that we can schedule you in.”
There was a box at the end of the letter for completion by Mrs Buck. It stated: “We have understood and agreed with the estimate and its terms and conditions and confirm our order with Mylcrist Builders Ltd to commence work on the property as detailed above.” Mrs Buck signed the box and dated the document 8 December 2004. This therefore formed the agreement between Mrs Buck and the Claimant and I shall refer to this as “the Contract”.
There were references in the letter and in that box to terms and conditions. On the reverse of the first page of the letter were the Claimant's Standard Terms and Conditions which included at paragraph 11 the following provision concerning Arbitration:
“Should any other disagreement arise in connection with or out of this contract the matters in dispute shall be referred in accordance with the Arbitration Act 1950 or any statutory modification or re-enactment thereof for the time being in force.”
The Claimant commenced work and after some five months a dispute arose between Mrs Buck and the Claimant as to whether certain sums which had been set out on page 2 of the letter of 7 December 2004 were included within the price of £23,580 which had been set out on paragraph 1 of that letter.
Mrs Buck went to see Kent County Council Trading Standards Department. In a letter dated 6 July 2005 Ms. Tidy of that department wrote to Mr Mylcrist saying she had been contacted by Mrs Buck. She referred to the Unfair Terms in Consumer Contracts Regulations 1999 (“the 1999 Regulations”) and said that she had considered the Claimant's standard terms and conditions and felt that there were a number of clauses that had the potential for unfairness. She added that only a court could ultimately decide whether a clause is unfair.
Mrs Tidy concluded by inviting Mr Mylcrist to contact her to discuss the position. He evidently did so because on 24 August 2005 Ms Tidy wrote to Mr Mylcrist referring to the 1999 Regulations and stating that, having considered the contract between the Claimant and Mrs Buck, there were terms which she considered unfair. Those terms were set out in a schedule to the letter.
In that schedule it was stated in relation to Term 11, Arbitration: “It may be seen as a restriction of consumers rights to impose an arbitration scheme as a final remedy.” Reference was made to Schedule 2 paragraph 1(q) of the 1999 Regulations.
Mrs Buck says that she has contacted two solicitors who agreed with what the trading standards department had said. She says that her solution was for Mr Mylcrist to start proceedings against her in Canterbury Crown Court which she described as “a quick solution”, but he refused and said that he never goes to Court but only to Arbitration.
There were evidently discussions between Mr Mylcrist and Mrs. Buck concerning the dispute. The way in which matters proceeded in relation to the arbitration was set out in the Award and in the other documents, as follows:
(1) In March 2006 a Notice of Arbitration was given by the Claimant to Mrs Buck.
(2) RSS Limited, consultants acting on behalf of the Claimant, then contacted Mr David Hannent FRICS MCIArb to see whether he would be willing to act as arbitrator.
(3) On 9 June 2006 Mr Hannent sent a letter to RSS Limited, copied to Mrs Buck, in which he confirmed his fees and requested confirmation from both parties of certain information.
(4) On 19 June 2006 Mrs Buck telephoned Mr Hannent “indicating that she did not wish to make representation on the dispute”.
(5) Mrs Buck wrote to Mr Hannent on 22 June 2006 to say that “On advice from the Legal Department of Trading Standards we have no wish to go to arbitration as ours is a legal matter. We have repeatedly sent letters confirming this”.
(6) Mr Hannent wrote to RSS Limited on 23 June 2006 pointing out that Mrs Buck did not wish to take part.
(7) Mrs Buck telephoned Mr Hannent and denied “the liability for Arbitration”.
(8) On 28 June 2006 Mr Hannent received an Agreement to Appoint dated 26 June 2006 signed only by the Claimant.
(9) On 3 July 2006 Mrs Buck responded “indicating that there was a process taking place by which she would respond”.
(10) On 7 July 2006 Mr Hannent produced an order for directions “confirming my appointment as one party had signed the Agreement and provided the deposit for both”.
(11) Mrs Buck in a letter of 12 November 2006 confirmed that she did not wish to participate in the arbitration.
(12) Mr Hannent proceeded to consider the Claimant's statement of account which accompanied a letter dated 6 December 2006.
In the Award dated 1 February 2007 Mr Hannent decided that Mrs Buck was liable to pay the Claimant an outstanding amount of £5,230.21 (including VAT), £4,366.29 (including VAT) for the Claimant's costs and £2,079.75 (including VAT) for his fees in the arbitration. He awarded interest at 2% per month on the outstanding amount to the date of the award and compound interest at 4 % above base rate on sums not paid under the award.
On 21 January 2008 the Claimant issued the Claim Form seeking permission to enforce the Award in the same manner as a Judgment or Order of the Court to the same effect.
Directions were given for service of the Claim Form on Mrs Buck. After Acknowledgement of Service directions were given for the exchange of evidence and written submissions, with the application being dealt with on paper without a hearing.
As a result of that evidence and submission it became apparent to the there were two issues which in principle might affect the enforceability of the award:
(1) Whether Mr Hannent had been properly appointed as arbitrator.
(2) Whether the arbitration clause was an unfair term within the 1999 Regulations and therefore unenforceable against Mrs Buck.
I asked whether the parties wished to submit any further written submissions on these issues. The Claimant did so and I now deal with those two issues and their effect on the Award and the application under s.66 of the Arbitration Act 1996 (“the 1996 Act”).
The appointment of the Arbitrator
The arbitration clause provided no mechanism for the appointment of an arbitrator. It merely states that disputes are to be referred in accordance with the Arbitration Act 1950 or any statutory modification or re-enactment thereof for the time being in force. That means that the provisions of the 1996 Act apply.
The 1996 Act provides at s.15(3) that if, as here, there is no agreement as to the number of arbitrators, the tribunal shall consist of a sole arbitrator. Similarly, s.16(3) provides for what is to happen when, as here, there is no agreement on the procedure for the appointment of the sole arbitrator. It provides:
“If the tribunal is to consist of a sole arbitrator, the parties shall jointly appoint the arbitrator not later than 28 days after service of a request in writing by either party to do so.”
There was a Notice of Arbitration given by the Claimant. However, it is clear on the facts that Mr Hannent was not jointly appointed by the parties. He was initially approached unilaterally by the Claimant and in the end only the Claimant signed the Agreement to Appoint. Mrs Buck made it clear that she was not participating in the process.
In those circumstances, in the absence of a joint appointment under s16(3), there was a failure of the appointment procedure and s.18 of the 1996 Act provides that the court can then appoint an arbitrator. That did not occur in this case.
Instead, Mr Hannent was appointed unilaterally by the Claimant. This is accepted by the Claimant. They say that Mrs Buck denied that the arbitration clause was applicable and had made it known that she was unwilling to participate in the arbitration. Rather the Claimant says that it served the signed Agreement to Appoint on Mrs Buck and that this was clear...
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