A & S Enterprises Ltd and Kema Holdings Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Seymour |
| Judgment Date | 27 July 2004 |
| Neutral Citation | [2004] EWHC 3365 (QB) |
| Date | 27 July 2004 |
| Court | Queen's Bench Division |
| Docket Number | Case No: HT–04–199 |
[2004] EWHC 3365 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
His Honour Judge Seymour QC
Case No: HT–04–199
Mr M Holt appeared on behalf of the applicant
Mr R Coplin appeared on behalf of the respondent
His Honour Judge Seymour
In this action the claimant, A&S Enterprises Ltd, seeks to enforce against the defendant, Kema Holdings Ltd, the decision of an adjudicator, Mr Julian Owen, dated 16 June of this year, which was to the effect that the defendant should pay to the claimant a sum totalling £89,475.86.
The claimant carries on business as a building contractor, and the defendant seems to be a single purpose vehicle formed for the purpose of developing a site at 1 Swanwick Road, Leabrooks, Alfreton, Derbyshire.
The claimant and the defendant entered into a building contract dated 22 July 2003. The building contract was in the Joint Contracts Tribunal standard form of building contract with Contractors' Design, 1998 edition, incorporating amendments 1, 2, 3 and 4. It appears that various of the matters requiring to be dealt with if that form of contract was to be used successfully were not dealt with, in particular no option as between Option A and Option B was selected in relation to the basis upon which payments were to be made under the contract.
What in fact seems to have happened is that an architect, Ernest Austin, was involved in the project, initially at least, on behalf of the defendant. Mr Austin during the course of the carrying out of the works at site issued a number of certificates. The first five of those certificates seem to have been paid by the defendant without raising any issue concerning them. The sixth certificate issued by Mr Austin had the effect, if it was to be paid by the defendant to the claimant, of taking the sum which had been paid in total in respect of the works which were the subject of the contract, to a figure in excess of the original contract price.
The defendant did not pay the certificate, and in those circumstances notice of adjudication was given by the claimant to the defendant, that initiated the process by which Mr Julian Owen was appointed as adjudicator, and following going through a process—to which I need to refer in more detail in a moment—Mr Owen produced his decision in relation to the matters referred to him dated 16 June of this year.
In the course of the adjudication an issue which arose was as to the role from time to time of Mr Austin. In particular it seems that there was an issue as to whether at various times which were thought to be material Mr Austin had been acting on behalf of the claimant, or acting on behalf of the defendant. Mr Austin, it seems, received an application for an interim payment from the claimant, which prompted him in due course to issue his certificate Number 6. In the adjudication the basic position initially adopted on behalf of the claimant was that it was entitled to be paid the sum which Mr Austin had certified. The principal ground of resistance to the claim on behalf of the defendant was that the form of contract made between the claimant and defendant contained no provision for the issue of a certificate. The consequence of that in the particular circumstances of the case as a matter of law were said to be that the provisions for payment in the Scheme for Construction Contracts applied.
It was contended on behalf of the defendant that what those provisions required was that there should be an application for payment, and, secondly, that the sum applied for should be shown in the adjudication to be due. The defendant's position was that there had been no application for payment made to it, because the application which had prompted Mr Austin to issue his certificate Number 6 was only made to him and not to it. Secondly, it was contended that in the adjudication no sufficient material had been produced to support the amount of the application which had been made for payment.
The first relevant step taken by Mr Owen, once the reference to adjudication had been made and he had been appointed adjudicator, was to write a letter dated 11 May of this year to the representatives of the claimant and the defendant respectively. The claimant was represented by a firm called Schofield Lothian and in particular by Mr William Green of that firm. The defendant was represented by a company called Blake Newport Associates Limited, and the individual particularly involved was Mr Chris Hughes.
In the letter of 11 May 2004 Mr Owen wrote, so far as is presently material, that:
"At this stage the outline timetable I would like to follow is set out below."
There were various dates set out, of which that which is relevant for present purposes was 27 May of this year, which was described as having this significance in the timetable:
"IF (that word appearing in capital letters) required, provisional date for a site visit, and/or a meeting (am or pm)."
and Mr Owen said:
"I would be grateful if both parties would adhere to this programme, or let me know of any objections now. It will be reviewed regularly in the light of developments, and I will notify the parties of any modifications to the timetable if they become necessary."
The next relevant step was the writing on 21 May by Mr Green of a letter to Mr Owen. By this stage there had been an exchange of statements of case in the adjudication. So far as is material Mr Green said in his letter of 21 May:
"May we kindly request, that should you deem it necessary to call a meeting of the representatives of the parties, the dates set aside should be either Tuesday 25 May 2004 or Wednesday 26 May 2004. This is at variance with your outline timetable, (date shown Thursday 27 May 2004) but we feel it important that the Managing Director of A&S Enterprises Limited, Mr A Sulin, should attend any meeting. He will, however, be unavailable on Thursday 27 May 2004. We would be eager and pleased to attend any meeting you may wish to convene at a venue and time as advised by you."
Mr Owen responded to that letter in a letter of the same date sent to the representatives of the claimant and the defendant. He confirmed that he had received submissions from both parties in accordance with his timetable, and he made the following comments:
"1. If either party feels that a meeting would be useful I am happy to consider any requests for one. At this stage, I feel that a meeting would be useful if Mr Austin would be prepared to attend and give his account of the events leading up to the dispute. Alternatively, I would accept a written statement from him, provided that it was supplied in good time for a considered response by the other party.
2. The referring party have asked for an alternative date for a meeting. Unfortunately, I am not available on the suggested dates. The next dates that I am available are" –
and he indicated some dates in June. Then at numbered paragraph 3 Mr Owen said:
"Regardless of the above, I have given notice of the possible meeting date well in advance and may have to ask both parties to keep to it. I would also restrict the number of people who could attend any meeting to the minimum I considered necessary."
Mr Hughes then wrote a letter to Mr Owen on 25 May. In his letter Mr Hughes said, so far as is relevant, this:
"In order to restrict the costs of both parties where possible, the Respondent Party does not feel that a meeting would add anything more to the resolution of the dispute as it stands. We are, of course open to your directions on the issue.
We do however fully agree with you that it would be beneficial to you that the Referring Party submit a statement from Mr Austin, although we believe that we have correctly stated his role under Contract, particularly in light of the significant comments below. If a statement is submitted, we would ask your permission and would reserve our right to respond."
The letter of 25 May was evidently sent by facsimile transmission because there were a number of communications between the parties, presumably also by fax, on the same date. Mr Green next sent a letter on 25 May; so far as is relevant what he said commenting on Mr Hughes' letter is this:
"We reiterate that further to the Referring Party's letter dated 24th May 2004 to your good self, we are eager to attend a meeting and that this is especially in the case of Mr Ernest Austin, who would be pleased to answer any questions you may wish to ask him.
The Referring Party believes that by the honesty and sincerity of those representing the Referring Party at a meeting you may convene will add greatly to the resolution of the dispute. We therefore await your directions concerning a meeting, all in accordance with our request and your outline timetable as advised to both parties on 11th May."
Mr Owen then responded to both Mr Green and Mr Hughes in a letter again dated 25 May. He said:
"In view of the very short time available, and since the referring party have not agreed to an extension, I feel that a meeting attended by Mr Austin and both parties would be helpful to me. The main aim of the meeting will be to hear from Mr Austin and take comments from both parties, and not to debate the legal issues raised so far. I have provisionally booked a room at the Renaissance Hotel, Derby, and propose that we meet there at 2.00 pm for a meeting that will last a maximum of 2 hours. The cost of the room hire and refreshments will be approximately £250. The referring party have already stated who will...
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