Niken Construction Ltd v Trigram Carver Street Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
JudgeJudge David Grant
Judgment Date01 September 2016
Neutral Citation[2016] EWHC 2232 (TCC)
Docket NumberCase No: C50BM024
Date01 September 2016

[2016] EWHC 2232 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

BIRMINGHAM DISTRICT REGISTRY

TECHNOLOGY AND CONSTRUCTION COURT

The Priory Courts

33 Bull Street,

Birmingham B4 6DS

Before:

His Honour Judge David Grant

(Sitting as a Judge of the High Court)

Case No: C50BM024

Between:
Niken Construction Ltd.
Claimant
and
Trigram Carver Street Ltd.
Defendant

Omar Ensaff of counsel appeared for the Claimant, instructed by ORJ Solicitors of Queensville House, Stafford ST17 4NL

Paul Hevingham of counsel appeared for the Defendant, instructed by Emms Gilmore Liberson of Lancaster House, 67 Newhall Street, Birmingham B3 1NQ

JUDGMENT APPROVED

Judge David Grant
1

The application

This is an application by Niken Construction Ltd. ("Niken") for summary judgment so as to enforce the decision of an adjudicator. It is opposed by Trigram Carver Street Ltd. ("Trigram").

2

Trigram has also commenced separate proceedings in action C50BM023 in which it seeks final determination of the issues which form the subject matter of this adjudication, as well as various other issues which have arisen between the parties. In those separate proceedings Trigram has made an application to consolidate those proceedings with the present proceedings, which Niken has commenced in order to enforce the adjudicator's decision. Trigram also relies on the fact that it has made such an application to consolidate the two sets of proceedings as a further ground of opposition to Niken's application for summary judgement.

3

Niken is represented at this hearing by Mr. Ensaff of counsel. Trigram is represented by Mr. Hevingham of counsel.

4

The building contract

The particulars of claim in these proceedings state the details of the building contract as follows:

"(1) The Claimant is a construction contractor which undertakes a variety of construction works, including residential properties.

"(2) The Defendant is a special purpose vehicle company formed to redevelop a site situated at 30 – 34 Carver Street, Birmingham B1 3AL. The title of the site is held by the Defendant under Land Registry official copy of registered title No. WM499950 and has been held since 27 November 2014.

"(3) By a contract made between the parties the Claimant agreed with the Defendant to design and construct twenty-four residential apartments (one and two bedrooms), associated car parking, communal areas and a single commercial unit for the total price of £2,266,896.50 pence + VAT. The project was zero VAT rated."

"(4) The contract was a JCT design and build contract 2011 …"

5

By letter dated 19 December 2014 Ginny Owen of PMO Quantity Surveyors, who were at all material times Trigram's project managers, wrote to Niken as follows (page 1/6/128):

"Please carry out main contract works which are briefly described as design and build twenty-four number one and two bedroom apartments, associated communal areas, car parking, landscaping and commercial unit and which are more particularly described in the main contract documents and shall be upon the terms contained in the main contract. The main contract comprises the rights and obligations set out in the main contract documents which are this main contract order, the joint contracts tribunal design and build main contract 2011, the main contract particulars and the schedule of numbered documents as listed in the main contract particulars which comprise the following documents."

6

There were then set out at appendices 1 to 12 a series of documents. Within those enclosed documents was a copy of the JCT design and build form of main contract which is at page 1/6/153. The contract particulars provided for a base date of October 2014 and a date for completion of the works of 9 October 2015.

7

The notices of default and termination

The parties served the following notices of default and termination. On 25 September 2015 Trigram, by its project manager, served a notice of default under the contract. In that notice, which was given by form of letter, Ginny Owen wrote as follows (page 2/6/409):

"As you are aware we are the employer's agent under the building contract … As agent for and on behalf of Trigram this letter is formal notice of default to you under clause 8.4 of the conditions of contract. The specified default is set out under clause 8.4.1.1 of the conditions of the contract, namely that you have failed and are failing to proceed regularly and diligently with the performance of your obligations under the contract.

"You are in significant and substantial delay in a number of areas of the works arising out of your failure to proceed regularly and diligently with the works. We attach a progress statement showing the significant areas in delay that are either already complete outside the target programme durations or are in progress and continue to contribute to the delay. In summary, the principal areas of delay are the installation of the foundations, upper floor metal decking, the installation of the concrete to those upper floors, completion of the superstructure brickwork, installation of the roof trusses, completion of the roof coverings and parapet walls with concealed gutter."

To that letter was attached a progress statement which is on the following page.

8

On 7 October 2015 Niken served a default notice. That is at page 3/792. In that letter Nick Plant of Niken wrote as follows:

"In the matter of a construction contract between Trigram … and Niken … this is a notice of specified default given under clause 8.9.1.1 of the contract. Payment notice number seven, dated 3 June 2015, in respect of interim application number seven (due date 29 May 2015) set out the amount of the interim payment to be made by Trigram on or before the final date for payment. The sum stated on payment notice number seven, i.e. the sum due to Niken, was £202,933.66 pence. In the event Niken received a payment of £162,010.66 pence in respect of payment notice number seven. No pay less notice was issued. The employer has failed to pay Niken the amount due to Niken in accordance with clause 4.9 by the final date for payment. With reference to clause 8.9.3, if the specified default continues for fourteen days from receipt of this notice, Niken may on or within twenty-one days from the expiry of that fourteen day period, via further notice to Trigram, terminate Niken's employment under the contract."

9

On 13 October 2015 Trigram served a termination notice, which is at page 3/640. In that letter Ginny Owen wrote as follows:

"We write further to our letter dated 25 September 2015 … You have continued the specified default for fourteen days following receipt of our notice. You remain in significant and substantial delay in a number of areas of the works on site arising out of your failure to proceed regularly and diligently with the works. In the circumstances, as employer's agent on behalf of the employer, this letter is notice to you pursuant to clause 8.4.2 of the contract conditions of termination of your employment under the contract. The employer will now employ and pay other persons to carry out and complete the works and make good any defects. You must now forthwith vacate the site. Under clause 8.7.2.2 of the contract you must provide to us immediately all contractor's design documents … Under clause 8.7.2.3 of the contract you must provide, within fourteen days of this date, details of any agreements for the supply of goods and materials for execution of works needed to complete the scheme …"

10

On 26 October 2015 Niken served a termination notice, which is at page 3/794. In that letter Nick Plant wrote as follows:

"In the matter of a construction contract between Trigram … and Niken … and with reference to the notice of specified default, dated 7 October 2015 … the specified default has continued for fourteen days from receipt of that notice. Accordingly, this is a notice of termination of the contractor's employment, given under clause 8.9.3 of the contract. This notice of termination shall take effect as provided for under clause 8.2.2 of the contract upon which the provisions of clause 8.12 of the contract shall apply."

11

The three adjudications

There have been three adjudications between the parties. Brief details of those three adjudications are set out in paragraphs 8 to 12 of Mr. Ensaff's written submissions. The first adjudication was commenced by Niken. It concerned an unpaid balance from interim valuation no 7 in the sum of £40,923. Niken was successful in that adjudication and Trigram was ordered to pay the sum sought by way of a decision dated 27 November 2015. It is common ground that on some later date Trigram paid that sum to Niken.

12

The second adjudication was commenced by Trigram on 15 December 2015. It concerned Trigram's assertion that Trigram had lawfully terminated Niken's employment under the contract. The relevant adjudication notice is at page 2/346 and it thus arose out of the termination notice which Trigram had served on 13 October 2015. In the event Trigram was unsuccessful in that adjudication.

13

The third adjudication notice was commenced by Niken on 25 April 2016. The adjudication notice in respect of this adjudication is at page 1/3/16. It concerned Niken's assertion that Niken was due a sum as a result of its termination account, which derived from Niken's termination of its employment under the contract.

14

It is to be noted that the adjudicator in this third adjudication was the same as the adjudicator in the second adjudication. However, the adjudicator in the first adjudication was a different person.

15

In the event Niken was successful in the third adjudication with the consequence...

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