Sleaford Building Services Ltd v Isoplus Piping Systems Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Alexander Nissen |
| Judgment Date | 04 July 2023 |
| Neutral Citation | [2023] EWHC 1643 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2023-00060/HT-2023-MAN-0007 |
[2023] EWHC 1643 (TCC)
Mr Alexander Nissen KC
Case No: HT-2023-00060/HT-2023-MAN-0007
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (KBD)
Royal Courts of Justice
Rolls Building, London, EC4A 1NL
Ms Melissa Shipley (instructed by Gateley plc) for the Part 8 Claimant/Part 7 Defendant
Mr Charlie Thompson (instructed by Hill Dickinson LLP) for the Part 8 Defendant/Part 7 Claimant
Hearing date: 31 May 2023
Approved Judgment
This judgment was handed down by the court remotely by circulation to the parties' representatives by email and released to The National Archives. The date and time for hand-down is deemed to be 4 July 2023 at 10.30am
Introduction
On 28 April 2023, I handed down the judgment in respect of the Part 7 and Part 8 proceedings concerning enforcement of an adjudicator's decision and associated declarations: see [2023] EWHC 969 (TCC). On 31 May 2023, I heard the applications and cross applications in respect of consequential matters including interest and costs. All matters were dealt with and determined on the day but, in two particular respects, I said I would give my reasons in writing in due course. This judgment provides those reasons.
As set out in my earlier judgment, the adjudicator issued her decision on 23 December 2022. Sleaford issued its Part 8 proceedings on 27 February 2023 seeking declaratory relief. Isoplus issued its Part 7 proceedings to enforce the decision on 15 March 2023. In short, I dismissed the Part 8 proceedings and gave judgment in the Part 7 claim enforcing the adjudicator's decision.
The first issue concerns the extent to which Isoplus is entitled to rely on a claimant's Part 36 offer made in the Part 7 proceedings. Isoplus contends that, as a result of a Part 36 offer which it made before the issue of those proceedings, it is entitled to each of: enhanced interest pursuant to CPR r.36.17(4)(a); indemnity costs pursuant to CPR r.36.17.4(b); and an additional amount comprising 10% of its claim pursuant to CPR r.36.17(4)(d)(i).
The second issue concerns the question of what costs order should otherwise be made in respect of the Part 7 proceedings and whether Sleaford should, in any event, be liable to pay costs on an indemnity basis irrespective of its Part 36 offer.
Chronology
I begin by setting out the relevant chronology of correspondence and email exchanges.
On 3 January 2023, Hill Dickinson LLP, solicitors for Isoplus, wrote to Sleaford demanding that it make payment in accordance with the adjudicator's decision, for the invoiced amount of £323,502.32.
On 14 February 2023, Gateley plc, now instructed by Sleaford, responded to the letter and indicated Sleaford's intention to issue Part 8 proceedings for declaratory relief including that the adjudicator's decision should not be enforced. The letter hinted at, but did not fully explain, any defence to enforcement. It claimed the decision was “obviously wrong” and said that the line of cases starting with Bouygues v Dahl Jensen could be distinguished.
In the proceedings as issued, Isoplus accepts that the final deadline for making the payment decided to be due by the adjudicator expired on 14 February 2023: see paragraph 18 of Mr Banks' second witness statement dated 15 March 2023.
On 23 February 2023, Hill Dickinson disputed the contentions made on behalf of Sleaford and indicated that, unless a satisfactory response was received, it would commence enforcement proceedings.
On the same day, Hill Dickinson made an offer to settle under CPR Part 36, without prejudice save as to costs. The letter stated:
“Dear Sirs
Re: Isoplus Piping Systems Limited v Sleaford Building Services Limited Adjudication Decision of Ms. Susan Francombe dated 23 December 2022
(“the Decision”)
Offer to settle under Part 36 – Without Prejudice Save as to Costs
We refer to the above matter in which we act for Isoplus Piping Systems Limited ( our client). We also refer to our open letter of even date.
Our client is confident that it is in a strong position to enforce the Decision against your client, Sleaford Building Services Limited. Our client is firmly of the view that the Decision will be enforced by the Court and that our client entitled to the sum awarded by the Adjudicator, for the reasons set out in our open letter.
However, our client is keen to resolve this matter amicably and without the need for protracted litigation and the associated costs. We are, therefore, instructed to make your client, the following offer to settle under Part 36 ( Offer).
This Offer is made pursuant to Part 36 of the Civil Procedure Rules and it is intended to be a claimant's Part 36 offer. Accordingly, if your client accepts this Offer within 21 days ( the relevant period), your client will be liable for our client's costs, in accordance with CPR 36.13.
Terms of the Offer
Our client is willing to settle the whole of its claim (in relation to the amount ordered at paragraph 171(c) of the Decision) in the matter referred to above on the following terms:
• Your client to pay our client, within 14 days of accepting this Offer, the sum of £323,502.32 (three hundred and twenty three thousand five hundred and two pounds and thirty two pence) ( the settlement sum), by way of bank transfer.
• The settlement sum does not include costs and, as mentioned above, your client will be liable to pay our client's costs on the standard basis, to be assessed if not agreed, up to the date of service of notice of acceptance if this Offer is accepted within the relevant period.
• The settlement sum is inclusive of interest until the relevant period has expired. Thereafter, interest at a rate of 8% p.a. will be added.
The settlement sum does not include interest. Our client is willing to waive its right to interest for the purposes of this proposal. Should our client be required to enforce the Decision then a claim for interest will be included for which your client will be liable.
Failure to accept this Offer
If your client does not accept this Offer, and our client obtains a judgment which is equal to or more advantageous than this Offer, our client intends to rely on CPR 36.17. In other words, our client will be seeking an order in the following terms:
• Your client to pay our client's costs up to the expiry of the relevant period.
• Your client to pay our client's costs on the indemnity basis from the date on which the relevant period expired, with interest on those costs of up to 10% above base rate and interest on the whole or part of any sum awarded at up to 10% above base rate for some or all of the period starting from the same date.
• An additional amount of 10% of damages awarded by the Court.
If you consider this offer to be in any way defective or non-compliant with Part 36, please let us know by return.
We look forward to hearing from you”.
There was no response to the Part 36 offer letter either within 21 days or, indeed, thereafter.
On 27 February 2023, Sleaford issued its Part 8 proceedings.
On 10 March 2023, Hill Dickinson stated that Sleaford should have issued Part 7 proceedings, rather than Part 8 proceedings, if it had wanted the issues raised by it to be determined. However, in respect of the enforcement of the decision, it invited Sleaford's consent to an order which recognised the adjudicator's decision was binding. It made two proposals:
“As we see it, if we are to avoid issuing separate Part 7 proceedings at this stage (and incurring the significant associated costs) we will need your client to either:
1. Consent to an order confirming the validity of the adjudicator's decision (on the understanding that the requirement for your client to make a payment is stayed pending the first hearing of the Part 8 proceedings); or
2. Agree for our client's (proposed) application for summary judgment (of the adjudicator's decision) to be dealt with and determined by the court as a preliminary issue prior to the Part 8 hearing.
…
In the event that we do not hear from you by close of business on Monday 13 th March 2023, we intend to issue separate Part 7 proceedings in order that the issue of enforcement can be dealt with.
If we are forced to take this step in circumstances where your client has not returned to us with suitable proposals, or provided any reasonable basis for contesting the validity of the adjudicator's decision, we shall be seeking our client's costs of the same on an indemnity basis as well as in relation to the Part 8 proceedings which we consider doomed to failure.”
On 10 March 2023, Gateley said it would need to take instructions from Sleaford and so would respond by 17 March 2023.
On 13 March 2023, Hill Dickinson said it would not wait until 17 March given that enforcement of the decision should have been discussed between Gateley and Sleaford prior to the issue of the Part 8 proceedings on 27 February. It indicated that enforcement proceedings would be issued the next day, 14 March, in the absence of a suitable response.
Later on 13 March 2023, Gateley complained that the proposal made by Hill Dickinson could have been sent weeks before but that it would revert by 17 March.
The Part 7 proceedings were issued on 15 March 2023. This was one day later than Hill Dickinson had threatened.
On 16 March 2023, one day earlier than promised, Gateley reverted to say it would accept the first proposed offer i.e., it would consent to an order confirming the validity of the decision on the basis that the requirement to make payment was stayed pending the first hearing of the Part 8 proceedings.
On 17 March 2023, Hill Dickinson pointed out that...
To continue reading
Request your trial
-
ABFA Commodities Trading Ltd (formerly VTB Commodities Trading DAC) (previously, VTB Capital Trading Ltd) v Petraco Oil Company SA
...LP v Kimura Commodity Trade Finance Fund Ltd [2023] EWHC 1512 (Comm), Sleaford Building Services Ltd v Isoplus Piping Systems Ltd [2023] EWHC 1643 (TCC)). ii) There is also authority which suggests that the court will ordinarily apply all the beneficial incidents of beating a Part 36 Offe......