R G Carter Ltd v Edmund Nuttall Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 21 March 2002 |
| Neutral Citation | [2002] EWHC 400 (TCC) |
| Docket Number | Case No: HT-02–60 |
| Date | 2002 |
| Year | 2002 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2002] EWHC 400 (TCC)
His Honour Judge Richard Seymour Q.C.
Case No: HT-02–60
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St. Dunstan's House,
133–137, Fetter Lane,
London, EC4A 1HD
Ian Pennicott(instructed by Shadbolt & Co. for the Claimant)
Martin Bowdery Q.C.(instructed by Greenwoods for the Defendant)
JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS)
H.H. Judge Richard Seymour Q. C.:
Introduction
This action arises out of a project for the construction in Norwich of a new civic community centre and library. That project ("the Project") was called "Norfolk and Norwich Millennium Project". The Defendant in this action, R. G. Carter Ltd. ("Carter"), carries on business as a building contractor and was employed by Norfolk and Norwich Millennium Company to undertake the Project.
Part of the works involved in the execution of the Project comprised concrete works to the substructure and building frame and various ancillary works. In this judgment I shall call those works "the Sub-Contract Works".
Although the relevant documents have not been put in evidence before me, it is common ground that Carter entered into a sub-contract ("the Sub-Contract") with the Claimant in this action, Edmund Nuttall Ltd. ("Nuttall"), by which Nuttall agreed with Carter to undertake the execution of the Sub-Contract Works.
It is common ground that the Sub-Contract incorporated the terms of the standard form DOM/1 sub-contract conditions, and in particular the provisions of clause 38A of those conditions relating to the referral to adjudication of disputes arising in connection with the execution of the Sub-Contract Works.
In this action Nuttall claims against Carter enforcement of the decision of Mr. David Maurice Richards dated 1 February 2002 ("the Decision"). Mr. Richards had been appointed by the President of Royal Institution of Chartered Surveyors to act as adjudicator in relation to a dispute between Nuttall and Carter of which notice had been given to Carter by a letter dated 14 December 2001 written on behalf of Nuttall by its solicitors, Messrs. Shadbolt & Co. ("Shadbolt"). By the Decision Mr. Richards determined that Carter should pay to Nuttall a sum of £834,468.90, plus Value Added Tax, amounting to £146,032.05,within 14 days of the date of the Decision. Mr. Richards also determined that Carter should pay his fees of £42,614.08 for acting as adjudicator. In the event those fees were paid by Nuttall. Thus the total sum claimed by Nuttall in this action is £1,023,115.03.
Payment of the sum claimed on behalf of Nuttall was resisted on behalf of Carter. In order to explain upon what grounds it was denied that Carter was liable to pay to Nuttall the sum claimed as payable as a result of the Decision it is necessary to recite something of the history leading up to the making of the Decision. However, the essential nature of the issue which I have to determine is what constitutes a "dispute" for the purposes of clause 38A of the standard form DOM/1 sub-contract conditions and, for that matter, for the purposes of section 108 of Housing Grants, Construction and Regeneration Act 1996("the 1996 Act").
The events leading up to the Decision
The history of the execution of the Sub-Contract by Nuttall does not seem to have been happy. There seem to have been a number of disputes and a number of references to adjudication before that with which I am concerned. While it seems that there are, or may be, differences about whether it was a term of the Sub-Contract that the Sub-Contract Works would be completed in sections, and, if so, in what sections, it appears to be common ground that the execution of the whole of the Sub-Contract Works should have been completed by 29 May 2000. It is common ground that the execution of the Sub-Contract Works was actually completed later than that date, but there appears to be a difference between the parties as to when exactly completion was achieved. For present purposes what matters is that in May 2001 Nuttall contended that it was entitled to an extension of time for completion of the Sub-Contract Works until 19 January 2001. Nuttall also claimed at that time to be entitled to payment of loss and expense in respect of the delays allegedly caused to it by Carter which were said to have prevented Nuttall completing the execution of the Sub-Contract Works any earlier than 19 January 2001.
Under cover of a letter dated 22 May 2001 Nuttall sent to Carter, for the attention of Mr. Tom Traynor, an application for payment of a total gross sum of £6,815,702.26 in respect of the execution of the Sub-Contract Works and in respect of other sums which were said to be due. The application for payment in question was numbered 21. One of the elements in the application was:—
"Claim for the recovery of costs incurred as a result of the prolongation of the Works from 29th May 00 to 19 January 01. Claim for the recovery of additional costs incurred as a result of delay and disruption suffered to the progress of the Works."
The claim in question ("the May Claim") had been sent by Nuttall to Carter under cover of a letter dated 18 May 2001. The amount of the May Claim was £1,979,752. That sum was made up as follows:—
The way in which the claim for extension of time had been formulated in the May Claim was to list in an appendix to the claim document a considerable number of occurrences during the course of the execution of the Sub-Contract Works and to indicate which of those occurrences was said to have caused delay, and how much delay was said to have been caused.
| (i) Prolongation | £474,018 |
| (ii) Off Site Cost | £108,938 |
| (iii) Staff Thickening | £242,070 |
| (iv) Overtime | £213,175 |
| (v) Disruption | £626,866 |
| (vi) Increased | Costs £ 4,043 |
| (vii) Attendances | £ 22,627 |
| (viii) Overheads | £212,227 |
| (ix) Financing | £ 75,788. |
Carter responded to Nuttall's application for payment numbered 21 in a formal payment notice and valuation statement sent to Nuttall under cover of a letter dated 7 June 2001. The assessment made by Carter of the sum payable to Nuttall was of a negative amount because of Carter's alleged claims against Nuttall. However, a breakdown of the calculation of the negative amount indicated that an allowance of £7,473.30 had been made in respect of the alleged claims of Nuttall.
Carter responded formally to the May Claim in a letter dated 23 August 2001. The letter was lengthy and made comment on each of the occurrences identified in support of the claim for extension of time. The conclusion stated in the letter was:—
"On the basis of the information contained within the "Claim" document, we can only conclude that ENL[that is, Nuttall] have failed to demonstrate an entitlement to any additional extension of time to the periods for completion of the Subcontract Works beyond those previously fixed."
In a letter dated 4 September 2001 to Mr. Lancastle of Nuttall Mr. Rasmussen of Carter addressed the question of further applications for payment on the part of Nuttall and, in particular, the process of seeking to agree variations and any other additional payments. The letter included:—
"Now that the position regarding extensions of time to your subcontract has been clarified (with confirmation that your subcontract period for completion remains 16th June 2000) it is our intention to finalise and agree with you, the value of any additional expense so incurred in connection with the extension of time granted (i.e. the 18 calendar days arising from delayed possession)."
Under cover of a letter dated 30 September 2001, but apparently sent no later than 17 September 2001, as it was referred to in a letter dated 3 October 2001 written by Mr. Rasmussen to Mr. Lancastle as having been received on 17 September 2001, Nuttall sent to Carter an application for payment numbered 22. That application included in the calculation of the sum claimed £1,979,752 in respect of the May Claim.
Nuttall, acting by Mr. Lancastle, replied to Mr. Traynor's letter dated 4 September 2001 in a letter to Carter dated 25 September 2001. That letter included:—
"In respect of you[sic] second paragraph and for the avoidance of any doubt we record that your confirmation that no further extension to the sub-contract period as stated in your letter MR/ 7333/24/1010 dated 23rd August 2001 is rejected.
Your consideration of our claim document is fundamentally flawed on a number of items and your transparent attempt to deny us our clear contractual entitlement is a cause of great concern. We therefore formally record that a dispute exists between us regarding the date for Completion of the Sub-Contract Works."
Mr. Rasmussen replied to Mr. Lancastle's letter dated 25 September 2001 in a letter dated 3 October 2001, to which I have already referred. The letter dated 3 October 2001 included this:—
"We have for a considerable time evaluated and included monies in your account for loss and expense arising from the extension of the subcontract period which has been awarded. Until recently, this has had to be carried out in the absence of any detailed information from yourselves. The values now included in our payment certification No. 25 are assessed from the information contained in your claim document dated 18th May 2001. Therefore, at no time, have we not complied with our contractual obligations towards you, as your letter seeks to suggest.
We have not however, made any payment for alleged "loss and expense" for the period of time after the date that has been set for subcontract completion. You have failed to demonstrate any entitlement under the subcontract, to an extension of time for this period, nor has your claim demonstrated, that the...
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