Stellite Construction Ltd v Vascroft Contractors Ltd

JurisdictionEngland & Wales
JudgeThe Hon. Mrs Justice Carr DBE
Judgment Date14 April 2016
Neutral Citation[2016] EWHC 792 (TCC)
Docket NumberCase No: HT-2016-000045
CourtQueen's Bench Division (Technology and Construction Court)
Date14 April 2016

[2016] EWHC 792 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Hon. Mrs Justice Carr DBE

Case No: HT-2016-000045

Between:
Stellite Construction Limited
Claimant
and
Vascroft Contractors Limited
Defendant

Mr Piers Stansfield Q.C. (instructed by Rosenblatt Solicitors) for the Claimant

Mr Paul Darling Q.C. and Ms Jennie Wild (instructed by Clarkslegal LLP) for the Defendant

Hearing date: 22nd March 2016

The Hon. Mrs Justice Carr DBE

Introduction

1

These Part 8 proceedings concern the decision of an adjudicator ("the Adjudicator") on 17 th January 2016 ("the Decision") in relation to a written contract dated 21 st January 2014 ("the Contract") for the construction of the shell and core of a substantial house in Hampstead known as Heath Park, North End Way, Hampstead, London NW3 7ET ("the Property"). Under the Contract, the Claimant property developer ("Stellite") engaged the Defendant contractor ("Vascroft") to carry out the shell and core works, which were also referred to as "Phase 1 Works" ("the Works"). The contractual completion date was 20 th October 2014. The works are not yet practically complete.

2

The Contract incorporates the terms of the JCT Standard Building Contract Without Quantities 2011 ("the JCT Standard Form"). It provides for liquidated damages to be paid by Vascroft to Stellite for delay in achieving practical completion of the Works. Extensions of time can be granted for delay caused by Relevant Events (as defined in the Contract).

3

Adair Associates Limited, the contract administrator ("the CA"), on behalf of Stellite, sent a letter of intent dated 3 rd August 2015 to Vascroft in relation to fit-out works at the Property, also referred to as "Phase 2 Works" ("Phase 2 Works") ("the Letter of Intent"). Vascroft signed the Letter of Intent on 7 th August 2015.

4

As indicated, the completion of the Works was delayed. Stellite claimed liquidated damages under the Contract. When Vascroft did not pay such damages, Stellite referred its claim for liquidated damages to adjudication pursuant to s.108 of the Housing Grants, Construction and Regeneration Act 1996 (as amended) ("the Act") and the Scheme for Construction Contracts ("the Scheme").

5

By the Decision, amongst other things, the Adjudicator decided that time for completion had been set at large on the ground that the CA was unable to grant an extension of time under the Contract for delay to the works caused by the issue of the Letter of Intent or the carrying out of Phase 2 Works pursuant to the Letter of Intent, because such delay did not fall within any of the Relevant Events (as defined in the Contract). He thus decided that no liquidated damages were due.

6

Stellite contends that Vascroft did not argue that time for completion of the Works was at large on this ground and the Adjudicator did not give the parties a fair opportunity to comment on such a proposition. The Decision is therefore unenforceable as a result of a breach of the rules of natural justice. The breach was of fundamental importance to the outcome of the Decision.

7

Having decided that time was at large, the Adjudicator went on to decide that a reasonable date for completion was 5 th March 2016. Stellite contends that the reasonable date for completion would be relevant only to a claim by Stellite for un-liquidated damages. There was no dispute between the parties regarding un-liquidated damages, and no such dispute was referred to the Adjudicator. Neither party had asked for a decision on the reasonable date for completion, nor had the parties' submissions addressed the issue. The Decision as to a reasonable date for completion was accordingly outside the Adjudicator's jurisdiction and/or in breach of the rules of natural justice.

8

Thus on 19 th February 2016 Stellite issued a claim form seeking two declarations:

a) That the Decision is unenforceable because the Adjudicator breached the rules of natural justice ("Issue 1");

b) That the Decision that a reasonable time for completion was 5 th March 2016 is unenforceable because it was outside the Adjudicator's jurisdiction and /or the Adjudicator breached the natural rules of justice ("Issue 2").

9

On the same day of issue Stellite sought an expedited hearing and on 22 nd February 2016 this Court made abridged directions for such a hearing.

10

Stellite also sought a third declaration, namely that time for completion of the contract works was not at large on the grounds decided by the Adjudicator, namely that delay to completion of that work had been caused by the carrying out of the Phase 2 Works, for which an extension of time could not be granted under the Contract. On 7 th March 2016, on Vascroft's application to vary the order of 22 nd February 2016, I directed that this claim for the third declaration be removed from the Part 8 procedure as being unsuitable for disposal in such a context and in all the circumstances of the case.

11

Stellite makes it clear that what it seeks in effect is to restore the parties to their pre-adjudication positions. A second adjudication would (probably, if not inevitably,) then follow. Vascroft resists the claim on its merits. It objects that this is a misconceived attempt by Stellite to have a " second bite at the cherry" which should not be permitted in the context of a dispute resolution process peculiar to the construction industry which is designed to achieve swift, if rough and ready, results. This process was one introduced with the parliamentary intention of providing a speedy mechanism for settling construction disputes on a provisional interim basis, and requiring the decisions of adjudicators to be enforced pending the final determination of disputes by arbitration, litigation or agreement. It is intended to be a speedy, and of necessity sometimes imperfect, procedure.

12

Evidence on the claim (and the application to vary) has been served as follows:

a) For Stellite: witness statements of Mr Nikesh Haria of Stellite's solicitors dated 19 th February, 3 rd and 14 th March 2016;

b) For Vascroft: witness statements of Mr David Rintoul of Vascroft's solicitors dated 1 st and 7 th March 2016.

Save where otherwise expressly stated, all references to clauses below are references to clauses in the Contract.

The Contract

13

The First Recital of the Contract described the Works as:

" Shell and core comprising a piled basement, construction of a nine bedroom house using a structural steel frame, flat roof, timber sliding sash windows, high-quality wall, floor and ceiling finishes, mechanical and electrical services, swimming pool and associated external works and landscaping…"

14

By Article 1, the Contract Sum was £5,070,845.79. The Contract Particulars provided that:

a) The Completion Date for the Contract Works was 20 October 2014; and

b) The rate of liquidated damages was £23,000 per week.

15

By Clause 2.27 Vascroft was obliged to give notice and particulars of causes of delay to completion, its expected effects and to identify any event which was in its opinion a Relevant Event (as defined in Clause 2.29).

16

Clause 2.28.1 provided (under the heading " Fixing Completion Date"):

". 1 If in the Architects/Contract Administrator's opinion, on receiving a notice and particulars under clause 2.27:

.1 any of the events which are stated to be a cause of delay is a Relevant Event;

and

.2 completion of the Works or of any Section is likely to be delayed thereby beyond the relevant Completion Date,

then, save where these Conditions expressly provide otherwise, the Architect/Contract Administrator shall give an extension of time by Works or Section as he then estimates to be fair and reasonable."

17

Clause 2.29 included the following, so far as material:

" The following are the Relevant Events referred to in clauses 2.27 and 2.28: …

.1 Variations and any other matters or instructions under which these Conditions are to be treated as, or as requiring, a Variation;

.6 any impediment, prevention or default, whether by act or omission, by the Employer, the Architect/Contract Administrator, the Quantity Surveyor or any of the Employer's Persons, except to the extent caused or contributed to by any default, whether by act or omission, of the Contractor or any of the Contractor's Persons; …"

18

By Clause 2.32 the Contract stated:

" .1 Provided:

.1 the Architect/Contract Administrator has issued a Non-Completion Certificate for the Works or a Section; and

.2 the Employer has notified the Contractor before the date of the Final Certificate that he may require payment of or may withhold or deduct, liquidated damages,

the Employer may, not later than five days before the final date for payment of the amounts payable under clause 4.15, give notice to the Contractor in the terms set out in clause 2.32.2…"

19

By Clause 9.2 of the Contract, if a dispute or difference arose under the Contract that either Party wished to refer to adjudication, then the Scheme was to apply.

20

The Letter of Intent stated:

" Further to our meeting of 27 July 2015, we write to confirm that it is the intention of our Client, Stellite Construction Limited, to enter into a formal Building Agreement with your company, Vascroft Contractors Limited, based upon the JCT Building Contract Without Quantities 2011 and bespoke amendments, to carry out the above works.

Please accept this letter as the instruction to commence with the works, pending agreement and execution of the Building Contract. Any works completed under this instruction be governed by the terms and conditions of...

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6 cases
  • Ground Developments Ltd v Fcc Construction SA and Others
    • United Kingdom
    • Queen's Bench Division (Technology and Construction Court)
    • 27 July 2016
    ...outside the ambit of the dispute that was referred to him. 30 In another case relied upon by the Joint Venture, Stellite Construction Ltd v Vascroft Contractors Ltd [2016] EWHC 792 (TCC), 165 ConLR 108, Carr J considered a situation where a sum of £1,064,158.38 was sought. This was a sum cl......
  • Aecom Design Build Ltd v Staptina Engineering Services Ltd
    • United Kingdom
    • Queen's Bench Division (Technology and Construction Court)
    • 5 April 2017
    ...on each of those grounds against part of the Decision, but the basic principle remains the same. 27 In Stellite Construction Limited v Vascroft Contractors Limited [2016] EWHC 792 (TCC); [2016] BLR 402 Carr J set out certain principles concerning how the question of construing a dispute re......
  • Iluminesia Ltd (t/a Alterego Facades) v RFL Facades Ltd
    • United Kingdom
    • King's Bench Division (Technology and Construction Court)
    • 6 December 2023
    ...to me helpful to set out the summary of Carr J (as she then was) in Stellite Construction Limited v Vascroft Contractors Limited [2016] EWHC 792 (TCC). In paragraphs [48] to [51] she said as follows: [48] It is common ground that the Notice of Adjudication defines the ambit of the adjudica......
  • Flexidig Ltd v M&M Contractors (Europe) Ltd
    • United Kingdom
    • Queen's Bench Division (Technology and Construction Court)
    • 11 March 2020
    ...advanced by the responding party.” 85 He then quotes from the case Satellite Construction Limited v Vascroft Contractors Limited [2016] EWHC 792 (TCC); [2016] BLR 402. It is necessary, in determining whether it was within the dispute, to see what the adjudicator actually found; and to anal......
  • Request a trial to view additional results
2 firm's commentaries
2 books & journal articles
  • Statutory adjudication
    • United Kingdom
    • Construction Law. Volume III - Third Edition
    • 13 April 2020
    ...Infrastructure Services Ltd [2010] BLR 377 at 385 [47]–[49], per Ramsey J; Stellite Construction Ltd v Vascroft Contractors Ltd [2016] EWHC 792 (TCC) at [50]–[53], per Carr J. See also Chamberlain Carpentry & Joinery Ltd v Alfred McAlpine Construction Ltd [2002] EWHC 514 (TCC); Carillion Co......
  • Table of cases
    • United Kingdom
    • Construction Law. Volume I - Third Edition
    • 13 April 2020
    ...III.25.48 Stellec Pty Ltd v Carnegie Capital Pty Ltd [2004] WASCA 268 III.4.185 Stellite Construction Ltd v Vascroft Contractors Ltd [2016] EWHC 792 (TCC) III.24.28, III.24.50, III.24.105, III.24.110 Stent Foundations Ltd v Carillion Construction (Contracts) Ltd (2000) 78 Con LR 188 I.1.61,......

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