Rydon Maintenance Ltd v Affinity Sutton Housing Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Raeside |
| Judgment Date | 15 January 2015 |
| Neutral Citation | [2015] EWHC 1306 (TCC) |
| Date | 15 January 2015 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | No: HT-2014-000099 |
[2015] EWHC 1306 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
7 Rolls Building
Fetter Lane
London
EC4A 1NL
His Honour Judge Raeside QC
(Sitting as a Deputy Judge of the High Court)
No: HT-2014-000099
Jessica Stephens appeared on behalf of the Claimants
Nigel Jones QC, Michael Wheater and Brenna Conroy appeared on behalf of the Defendant
(As approved)
Thursday, 15 January 2015
THE DEPUTY JUDGE:
This is an ex tempore oral judgment which will be in nine parts: Introduction; 2. Application; 3. Responses; 4. Contract; 5. Procedural Facts; 6. Award; 7. Legal Approach; 8. Grounds 1 to 3; 9. Conclusions.
Introduction
This was a dispute between Rydon Maintenance Limited ("Rydon") and Affinity Sutton Housing Limited ("Affinity Sutton") in respect of a decision of an adjudicator which is being summarily enforced by Rydon against Affinity Sutton. The background in brief to this dispute is that Rydon were engaged by Affinity Sutton to provide works described as "maintenance and minor works to be carried out at Biggin Hill, Chislehurst, St Mary's Cray and St Paul's Cray" pursuant to a standard JCT Measured Term Contract 1998 (as revised) which was made under a deed of 5 October 2000.
The initial term was five years and that was extended by an ACA standard form Term Partnering Contract which amended the existing partnering arrangement. The works started in October 2000 and continued until 2012. By November 2011, it became apparent to Rydon that they had not invoiced fully all those claims they had against Affinity Sutton which were, in effect, under this form of contract, a cost plus a percentage of uplifts for overheads and profit.
Application
On 21 November 2014, a claim form was issued at the TCC in which Rydon claimed more than £300,000 against Affinity Sutton. That contained a statement of truth from Timothy Martin Shutler of the Rydon Group Limited, their head of legal, and had attached to it Particulars of Claim. The Particulars of Claim are settled by counsel for Rydon, Jessica Stephens, and was dated 21 November 2014. The relief sought was fourfold. Firstly, £1,857,006.29, secondly VAT in the sum of £371,401.26, interest from 24 October 2014 in the sum of £71,247.99 and the adjudicator's fees which had been paid by Rydon in the sum of £68,250. It is apparent from the terms of those Particulars of Claim that a dispute is set out, the contractual terms which gave rise to an express right to an adjudication under certain rules, the adjudication itself and the failure by Affinity Sutton to make payment as required by those rules, of a decision published by this adjudicator.
Also on 25 November 2014, an application notice was taken out in the TCC by Rydon against Affinity Sutton seeking this relief: an order (1) abridging time; and (2) for summary judgment to enforce an adjudicator's award. It was to be subject to a hearing for three hours. That also contained a truth statement from the same Mr Shutler. Attached were the usual directions for enforcement of an adjudication.
In support of that application there was a witness statement from Timothy Martin Shutler, dated 21 November 2014, in which he indicated a crystallised dispute, the refusal by Affinity Sutton to pay, background of the original proceedings and the jurisdictional challenge. Evidence was given of some of the adjudicator's directions and the history of the hearing to some extent and what was sought was enforcement of that decision.
Edward-Stuart J in the TCC made a standard order for the purpose of this application on 25 November 2014, in which, among other matters, he made provision for the service of the application form in the usual way, expedited effects of that under CPR 24.4 and a provision for a hearing on 15 January 2014 for 2 1/2 hours, which could be varied at short notice to accommodate the listing requirements of the court. As a result of that order, a witness statement was settled by Sue Cooper, who is a director of property Services for Affinity Sutton and is dated 10 December 2014.
Somewhat unusually, the witness statement takes the approach of quoting at great length from various documents on which are relied by Affinity Sutton which, generally speaking, one is encouraged not to do as part of modern litigation. For my purposes, I have gone to the original documents and will refer to those as opposed to the quotations but in the context of this witness statement.
The document itself indicates that there are jurisdiction submissions, and those are set out. It refers to the availability of experts and sets out by long quotation some of those documents. It then refers to a meeting on Wednesday, which was a meeting in August 2014, which is set out by extensive quotations again. It then indicates details of the questions to the experts and the adjudicator's questions to those experts, again by largely long quotations and then makes reference to the closing submissions and the closing hearing, again by long quotations from the transcript. The document then refers to the final account, again by long quotation, and the decision set out in paragraph 116 is:
"It is clear from the decision that the adjudicator had not changed position from his original observations and had not in any meaningful way taken into account Affinity Sutton's Response or evidence.
117. This is demonstrated by the fact that the Adjudicator accepted Rydon's evidence in its Referral that the cause of the under invoicing was as a result of haphazard adjustments to the invoices by an employee who in fact did not work at Rydon for over half of the period when the alleged under invoicing took place. This issue was never addressed by Rydon and the adjudicator accepted that Kevan Burns was the cause of the problem despite the fact he was not employed by Rydon until 2007."
On that basis, she indicates in paragraph 118 for those reasons to which I have referred by summary only, it is her position that this Decision should not be enforced.
The skeleton arguments ordered by this court were provided by three counsel instructed by the defendants and I summarise the case they put. In doing so I read from pages 2 and 3 of their 22 page skeleton argument:
"There are three basic grounds they are as follows:
(a) The Adjudicator failed to follow the adjudication procedure agreed by the parties, in particular the parties' express written agreement that there be a written Reply followed by a meeting with the parties' legal teams and experts in attendance. Instead the Adjudicator adopted his own different procedure so as to determine the dispute. Whilst the Adjudication rules give the Adjudicator considerable flexibility in setting his own rules and procedure, his fundamental jurisdiction flows from the agreement of the parties and the rules do not permit departure from the parties' agreement. By acting as he did, the Adjudicator either: (i) acted outside the scope of his jurisdiction; or (ii) breached the rules of natural justice.
The Adjudicator acted in breach of the rules of natural justice by failing to conduct the adjudication in a fair and impartial manner and by giving the impression of apparent bias. In particular, the Adjudicator: (i) failed to give each party an equal and reasonable opportunity to present its case and to deal with its opponent's case; (ii) failed to ensure that each party was fully appraised of any arguments against it, and was given a reasonable opportunity to comment; and (iii) failed to adopt procedures appropriate to the case.
The Adjudicator had clearly reached a final conclusion as to the outcome of the adjudication prior to being in possession of all the relevant evidence and arguments. In doing so, the Adjudicator failed to make an objective determination of the issues that he was required to resolve, alternatively, he was guilty of apparent pre-determination."
The skeleton argument provided by the claimants based itself on a letter received on 24 October 2014 in which there were four particular matters which it was apparent from that letter that Affinity Sutton wishes to raise at this enforcement hearing. As it turned out, there are in fact three matters essentially in dispute which we have just set out and therefore much of the evidence provided in the skeleton argument was in fact not necessary. I make no complaint about this, but that was the best evidence that Miss Stephens had to which to respond to these disputes.
The Contract
This is a well-known JCT standard form measured term contract incorporating amendments 1/1999 and 2/2000, being the 1998 addition. It is clear from the Articles of Agreement that the employer is Bromley Housing Association Limited and the contractor is Rydon Property Maintenance Limited. The works, or recitals for those works, refer to maintenance and minor repair to be carried out in Biggin Hill, Chislehurst, Orpington, St Mary's Cray and St Paul's Cray. The agreement indicates in article 4 that there will be a planning supervisor involved. It also makes provision for resolution of disputes in the other articles. That is signed by those parties. There is no dispute in this case that the correct defendant is Affinity Sutton.
As I have indicated in the introduction, that then became subject to a separate ACA standard form contract, TPC 2000 amended in 2008, which contained express provisions. The provision for adjudication is contained in clause 14.4. It provides as follows:
"The...
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Table of cases
...City Council v Transield Pty Ltd [2002] NSWSC 1037 II.8.39, II.8.42, III.25.272 Rydon Maintenance Ltd v Ainity Sutton Housing Ltd [2015] EWHC 1306 (TCC) III.24.112 Ryeford Homes Ltd v Sevenoaks District Council (1989) 46 BLR 34 II.10.167 Ryobi-Kiso (S) Pte Ltd v Lum Chang Building Contracto......
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Statutory adjudication
...661 (TCC). 587 Lanes Group plc v Galliford Try Infrastructure Ltd [2012] BLR 121; Rydon Maintenance Ltd v Ainity Sutton Housing Ltd [2015] EWHC 1306 (TCC). 588 Costain Ltd v Strathclyde Builders Ltd (2003) 100 Con LR 41 at 57 [23] –59 [27], per Lord Drummond Young. STATUTORY ADJUDICATION an......