Speymill Contracts Ltd v Baskind
| Jurisdiction | England & Wales |
| Judge | Lord Justice Jackson,Sir David Keene,Lord Justice Waller |
| Judgment Date | 25 February 2010 |
| Neutral Citation | [2010] EWCA Civ 120 |
| Docket Number | Case No: A1/2009/1732 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 February 2010 |
[2010] EWCA Civ 120
Before: Lord Justice Waller
Lord Justice Jackson
and
Sir David Keene
Case No: A1/2009/1732
9LV22750/TC12/09 AND 9LV30739/TC11/09
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LIVERPOOL TCC
HHJ Platts
Mr. Steven Walker (instructed by Sloan Plumb Wood LLP) for the Appellant
Mr. Marcus Taverner QC and Mr Jonathan Selby (instructed by Colemans-ctts) for the Respondent
Hearing dates: Thursday 11 th February 2010
Lord Justice Jackson:1. This judgment is in five parts namely:—
Part 1 – Introduction;
Part 2 – The Facts;
Part 3 – The Present Proceedings;
Part 4 – The Law;
Part 5 – Decision.
2. This is an appeal by a contractor against the decision of HHJ Platts in the Technology and Construction Court in Liverpool in which the judge declined to give summary judgment enforcing an adjudicator's decision. Speymill Contracts Limited (“Speymill”) is the claimant in the adjudication, the claimant in the litigation and the appellant in this court. Mr Eric Baskind (“Mr Baskind”) is the respondent in the adjudication, the defendant in the proceedings to enforce the adjudicator's decision and the respondent in this court.
3. The property the subject of these proceedings is Raby House, Willeston, Neston, Cheshire. I shall refer to it as “Raby House”.
4. The JS Design Partnership (“JSD”) were the architects for the building project. Summerfield Robb Clark Limited (“SRC”) were the quantity surveyors for the building project.
5. The statutory provisions which are relevant background to this appeal are contained in the Housing Grants, Construction and Regeneration Act 1996 (“the 1996 Act”). Section 108 of the 1996 Act provides: —
“108 Right to refer disputes to adjudication
(1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.
For this purpose “dispute” includes any difference.
(2) The contract shall –
(a) enable a party to give notice at any time of his intention to refer a dispute to adjudication;
(b) provide a timetable with the object of securing the appointment of the adjudicator and referral of the dispute to him within 7 days of such notice;
(c) require the adjudicator to reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred;
(d) allow the adjudicator to extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred;
(e) impose a duty on the adjudicator to act impartially; and
(f) enable the adjudicator to take the initiative in ascertaining the facts and the law.
(3) The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.
The parties may agree to accept the decision of the adjudicator as finally determining the dispute.”
6. Section 111 of the 1996 Act provides:—
“111 Notice of intention to withhold payment
(1) A party to a construction contract may not withhold payment after the final date for payment of a sum due under the contract unless he has given an effective notice of intention to withhold payment.
The notice mentioned in section 110(2) may suffice as a notice of intention to withhold payment if it complies with the requirements of this section.
(2) To be effective such a notice must specify –
(a) the amount proposed to be withheld and the ground for withholding payment, or
(b) if there is more than one ground, each ground and the amount attributable to it,
and must be given not later than the prescribed period before the final date for payment.
(3) The parties are free to agree what the prescribed period is to be.”
7. After this brief introduction I must now turn to the facts.
8. Raby House was formerly a country house hotel; Mr Baskind purchased Raby House on a date before 2005 with a view to making the property his home. He engaged JSD as architects to design the conversion works. He engaged SRC to act as his quantity surveyors in respect of the proposed works. In March 2005 the project went out to tender. Speymill was the successful tenderer. Speymill commenced work at Raby House in August 2005.
9. No formal contract for the conversion works was ever executed. However, agreement was reached in correspondence between the parties. That agreement incorporated the terms of the JCT Standard Form of Building Contract, 1998 edition, private without quantities, I shall refer to this as “the JCT Contract”. Article 5 of the JCT Contract provided:—
“If any dispute or difference arises under this Contract either Party may refer it to adjudication in accordance with clause 41A.”
The conditions of the JCT Contract included the following clauses:
“30.1.1.4 Not later than 5 days before the final date for payment of the amount due pursuant to clause 30.1.1.1 the Employer may give a written notice to the Contractor which shall specify any amount proposed to be withheld and/or deducted from that due amount, the ground or grounds for such withholding and/or deduction and the amount of withholding and/or deduction attributable to each ground.
30.1.1.5 Where the Employer does not give any written notice pursuant to clause 30.1.1.3 and/or to clause 30.1.1.4 the Employer shall pay the Contractor the amount due pursuant to clause 30.1.1.1.
………………….
41A.4.1 When pursuant to article 5 a Party requires a dispute or difference to be referred to adjudication then that Party shall give notice to the other Party of his intention to refer the dispute or difference, briefly identified in the notice, to adjudication. If an Adjudicator is agreed or appointed within 7 days of the notice then the Party giving the notice shall refer the dispute or difference to the Adjudicator (‘the referral’) within 7 days of the notice. If an Adjudicator is not agreed or appointed within 7 days of the notice the referral shall be made immediately on such agreement or appointment. The said Party shall include with that referral particulars of the dispute or difference together with a summary of the contentions on which he relies, a statement of the relief or remedy which is sought and any material he wishes the Adjudicator to consider.
……………………………….
41A.5.2 The Party not making the referral may, by the same means stated in clause 41A.4.2, send to the Adjudicator within 7 days of the date of the referral, with a copy to the other Party, a written statement of the contentions on which he relies and any material he wishes the Adjudicator to consider.
41A.5.3 The Adjudicator shall within 28 days of the referral under clause 41A.4.1 and acting as an Adjudicator for the purposes of S.108 of the Housing Grants, Construction and Regeneration Act 1996 and not as an expert or an arbitrator reach his decision and forthwith send that decision in writing to the Parties. Provided that the Party who has made the referral may consent to allowing the Adjudicator to extend the period of 28 days by up to 14 days; and that by agreement between the Parties after the referral has been made a longer period than 28 days may be notified jointly by the Parties to the Adjudicator within which to reach his decision.
41A.5.4 The Adjudicator shall not be obliged to give reasons for his decision.
41A.5.5 In reaching his decision the Adjudicator shall act impartially and set his own procedure; and at his absolute discretion may take the initiative in ascertaining the facts and the law as he considers necessary….
41A.7.1 The decision of the Adjudicator shall be binding on the Parties until the dispute or difference is finally determined by arbitration or by legal proceedings [xx] or by an agreement in writing between the Parties made after the decision of the Adjudicator has been given.”
10. Those contract terms reflect the provisions of sections 108 and 111 of the 1996 Act. Since building works were being carried out to a dwelling house, the parties were not obliged to include adjudication provisions in their contract: see section 106 of the 1996 Act. Nevertheless they chose to do so.
11. Let me now return to the narrative. During the course of the building works JSD issued a total of fifteen interim payment certificates between 31 st August 2005 and 10 th October 2006 to a total value of £753,490.44. Mr Baskind made payments against those certificates up until 12 th April 2006 in the total sum of £652,786.20. After that he made no further payments. In particular he made no payments in respect of interim payment certificates numbered 13, 14 or 15, and only partial payment in respect of interim payment certificate 12. Furthermore JSD granted extensions of time under the contract and issued a certificate of practical completion on 27 th June 2006.
12. The parties were unable to agree what further payments were due to Speymill. The parties were also in dispute about a number of other matters, which are not material to this appeal.
13. On 28 th November 2008 Speymill served a notice of adjudication, seeking payment of all outstanding sums which were due. In due course Mr Peter Vinden was appointed as adjudicator. The contractual procedures were followed, whereby each party served its submissions and the material on which it relied.
14. One of the issues in...
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