The Council of the City of Plymouth v D R Jones (Yeovil) Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Peter Coulson QC |
| Judgment Date | 31 October 2005 |
| Neutral Citation | [2005] EWHC 2356 (TCC) |
| Docket Number | Claim No: HT-05–241 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 31 October 2005 |
[2005] EWHC 2356 (TCC)
His Honour Judge Peter Coulson QC
Claim No: HT-05–241
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St Dunstan's House
133–137 Fetter Lane
London, EC4A 1HD
INTRODUCTION
By an arbitration claim form issued on 6 September 2005, the claimant, the Council of the City of Plymouth ("the Council"), seeks permission to appeal, pursuant to section 69 of the Arbitration Act 1996, in respect of alleged errors of law arising out of an arbitrator's award dated 17 June 2005. The award, entitled "Award No.1", was produced by the arbitrator, Mr D J Cartwright, as part of an ongoing arbitration between the parties.
The claim form contained what was effectively a page and a half of submissions, under the heading "Remedy claimed and grounds on which claim is made". In addition, the Council relied on a separate document entitled "Submission on Claimant's Application for Permission to Appeal", which was itself supported by a witness statement from Mr Stuart Wallace, the person who is conducting the arbitration on behalf of the Council. That witness statement contained as many as ten exhibits, together with Award No.1. In response there was a witness statement of Ms Amy Higgins, the solicitor instructed by D R Jones, which exhibited Award No.1 and some later correspondence with the Arbitrator. There was also a short skeleton argument. In response to Ms Higgins' statement and the skeleton argument, there was a further five pages of reply submissions produced by the Council.
The Council and D R Jones are agreed that I should determine the application for permission to appeal on the basis of the documents referred to in paragraph 2 above. In accordance with the usual practice for this sort of application, there has been no oral hearing.
I have no hesitation in concluding that this application for permission to appeal should be dismissed, with costs. My detailed reasons for that conclusion are set out below. However, I am bound to say at the outset that, in my judgment, this is an application which never had any prospect of success.
THE CONTRACT
Before considering the award and the criticisms made of it, it is worthwhile setting out the contractual position, by reference to the documents supplied to the court by the Council. In my view, an entirely unremarkable story is there set out.
In October 1999, D R Jones provided a tender for proposed works at Mount Wise Primary School in Plymouth. The tender was in the sum of £497,229. This figure was not accepted by the Council who, on 30 November 1999, wrote to say that the scope of the proposed works was being reduced and the contract period was also being reduced to 39 weeks. They made clear that this was part of a cost-cutting exercise. A revised tender figure was sought from the contractors on the basis of the remaining items of work identified by the Council in that letter.
On 16 December 1999, D R Jones responded to this request, identifying a revised estimate for the reduced workscope of £382,881 plus VAT. This figure was expressly said to include various provisional sums.
On 13 January 2000, the Council wrote to D R Jones to say that this revised bid was "the preferred tender" and telling them that:
"All relevant details regarding the Contract have been forwarded to the Head of Legal Practice and he will be writing to you shortly."
On 26 January 2000 the Council wrote again to D R Jones referring to the tender "at the revised sum of £382,881 having been accepted". The letter enclosed contract documents for execution by D R Jones.
The work started on site in mid-February 2000. At the same time, on 14 February, the Council chased D R Jones for the executed contract documents. On 28 February, having executed them, D R Jones returned the contract documents to the Council. It appears that the Council signed and dated the documents on the 15 March 2000. All the complaints now raised by the Council must be considered against this background: that there was a written contract in existence which had been signed by both parties.
THE ARBITRATION AND THE AWARD
Notwithstanding that the contract was executed by D R Jones in the precise form sent out by the Council on 26 th January (subsequently dated by the Council on the 15 th March) it seems that, a long time later, the Council became convinced that, in some way, the contract documents did not reflect the true agreement between the parties. They therefore commenced arbitration proceedings in which, amongst other things, they sought to rectify their own contract documents.
There was a one day hearing on 21 March 2005 to deal with certain preliminary issues which the parties had identified as being relevant to the claim for rectification. These were:
i) the date of the formation of the contract;
ii) which documents are incorporated into the contract;
iii) which contractual dates are incorporated into the contract; and
iv) the contractual working hours.
The arbitrator's Award No.1 dated 17 June 2005 dealt in some detail with those four matters. He concluded that the contract was formed on 26 January 2000 when the contract documents were sent out under cover of the letter which said that the revised tender was "agreed"; that the contract documents were those listed in the signed agreement of 15 March 2000 and that rectification was unnecessary and mutual mistake unproven; that the contract period was 39 weeks from 14 February 2000 and that there were no binding sectional completion dates; and that the working hours were 8 am to 6 pm Monday to Friday save for Bank Holidays. These four conclusions, as the arbitrator pointed out at paragraph 96 of Award No.1, meant that the Council had failed on all four issues.
SECTION 69: APPLICABLE PRINCIPLES
Section 69(3) of the Arbitration Act 1996 provides that:
"(3) Leave to appeal shall be given only if the court is satisfied –
(a) that the determination of the question will substantially affect the rights of one or more of the parties,
(b) that the question is one which the tribunal was asked to determine,
(c) that, on the basis of the findings of fact in the award –
(i) the decision of the tribunal on the question is obviously wrong, or
(ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question."
It therefore follows that, at the outset, the Council needs to demonstrate:
i) that there is a question of law;
ii) the outcome of which will substantially affect the rights of one or more of the parties;
iii) which the arbitrator was asked to determine;
iv) on which the arbitrator was obviously wrong (it being no part of the Council's case that the matters that they raise are of general public importance); and that
v) it is just and proper for the court to determine such questions.
I deal shortly with a number of these ingredients below.
Question of Law
There can be no error of law if the arbitrator reached a decision which was within the permissible range of solutions open to him: see The Matthew [1992] Lloyds Reports 323.
Substantially Affecting the Rights of One or More of the Parties
In this case the Council needs to demonstrate how and why the particular point which it claims that the arbitrator has erroneously decided has a substantial effect on the rights of the parties at issue in the arbitration: see the test formulated by Lord Phillips MR in The Northern Pioneer [2003] 1 Lloyds Reports 212.
Obviously Wrong
As I have already pointed out, the Council does not suggest, and nor could it suggest, that the alleged errors of law raise any point of public importance. Accordingly, the Council needs to demonstrate that the arbitrator was obviously wrong. The authorities make plain that the obvious error must normally be demonstrable on the face of the award itself: see, for instance Foleys Ltd v City and East London Family and Community Services [1997] ADRLJ 401 and Hok Sport Ltd v Aintree Race Course Co Ltd [2003] BLR 155. I also note that the Second Edition of the TCC Guide, published on 3 October 2005, states at paragraph 10.2.4 that, save in exceptional circumstances, the only material admissible on an application of this kind is the award itself, together with any documents attached to it.
THE DATE OF THE FORMATION OF THE CONTRACT
The arbitrator found that the date of the formation of the contract was 26 January 2000, for the reasons explained at paragraphs 25 to 52 of Award No.1. The Council contend that this result either constituted or resulted from an error of law on the part of the arbitrator.
The first fundamental difficulty with this part of the application is that the error of law is nowhere set out by the Council, despite the fact that they have produced three different documents setting out their case in relation to this application. In an application of this sort, the alleged error of law should be set out in clear, unambiguous terms by a claimant, and made directly referable to a paragraph or paragraphs of the award. This has just not been done here. The second, related difficulty is that it is not at all clear that this alleged error could be a...
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