Treasure and Son Ltd v Dawes
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE AKENHEAD,Mr Justice Coulson |
| Judgment Date | 15 September 2008 |
| Neutral Citation | [2007] EWHC 2420 (TCC),[2008] EWHC 2181 (TCC) |
| Docket Number | Case Nos: HT-08200 & HT-08217,Case No: HT 07 282 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 15 September 2008 |
[2007] EWHC 2420 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN's BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Mr Justice Akenhead
Case No: HT 07 282
Michael Taylor (instructed by Contract and Construction Consultants (Southern) Ltd) for the Claimant
Andrew Singer (instructed by George Davies LLP) for the Defendant
Hearing dates: 10 October 2007
This is an application on the part of the Claimant under Part 24 of the Civil Procedure Rules to enforce what is said to be the decision of an adjudicator under a written contract. The Claimant, Treasure and Son Ltd (“Treasure”), was engaged by the Defendant, Martin Dawes (“Mr Dawes”), to carry out extensive works of refurbishment and restoration at Dinmore Manor, Herefordshire pursuant to a contract made in 2000 incorporating the JCT Standard Form of Prime Cost Contract (1998 Edition with Amendments 1 and 2). The Adjudicator was Mr Paul Greenwood, who sent out his decision under cover of his letter dated 21 st August 2007 to the parties. The Adjudicator decided that Mr Dawes should pay to Treasure £1,018,821.12 plus VAT, plus interest and the Adjudicator's fee and expenses.
Mr Dawes seeks to defend the summary judgment application on a number of grounds, two of which may be of more particular legal interest, namely whether, if there was an oral variation of the written construction contract, that means that the Adjudicator has no jurisdiction, and, secondly, whether an adjudicator's decision has to be signed to be a valid decision.
The Contract
There is no issue between the parties that the original construction contract incorporating the JCT Prime Cost form was a written construction contract with all its terms being in writing. Attached to Mr McCartney's witness statement in support of Treasure's Part 24 application is a copy of that contract, albeit the exhibit does not contain a page where the parties have signed the contract.
Article 8 of the Contract states:
“If any dispute or difference arises under this Contract either Party may refer it to adjudication in accordance with clause 9A.”
Article 9A, materially states as follows:
“9A.1 Clause 9A applies where, pursuant to article 8, either Party refers any dispute or difference arising under this Contract to adjudication.
9A.2 The Adjudicator to decide the dispute or difference shall be either an individual agreed by the Parties or an individual to be nominated as the Adjudicator by the person named in the Appendix ('the nominator') …..
9A.5.3 The Adjudicator shall within 28 days of his receipt of the referral and its accompanying documentation under Clause 9A.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.
…..
9A.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 or by an agreement in writing between the Parties made after the decision of the Adjudicator has been given.
9A.7.2 The Parties shall, without prejudice to their other rights under this Contract, comply with the decisions of the Adjudicator; and the Employer and the Contractor shall ensure decisions of the Adjudicator are given effect.
9A.7.3 If either Party does not comply with the decision of the Adjudicator the other Party shall be entitled to take legal proceedings to secure such compliance pending any final determination of the referred dispute or difference pursuant to Clause 9A.7.1.”
The Parties' chosen method of final dispute resolution is arbitration.
In broad terms, Treasure was entitled to payment on a Prime Cost basis. This allowed to Treasure certain actual costs plus a percentage mark up thereon. Clause 4.2 made payment dependent upon the issue of certain Interim Certificates:
“4.2 The Architect/The Contract Administrator shall issue an Interim Certificate stating the amount due to the Contractor from the Employer specifying to what the amount relates and the basis on which the amount was calculated at the following times:
.1 from the Date of Possession up to one month after the day named in the Certificate of Practical Completion: at the dates stated in the Appendix;
.2 not earlier than one month after the day named in the Certificate of Practical Completion: as and when further amounts are ascertained as payable to the Contractor by the Employer provided always that the Architect/the Contract Administrator shall not be required to issue an Interim Certificate within one calendar month of having issued a previous Interim Certificate …..”
I was told by Mr Singer for Mr Dawes that the Interim Certificates prior to Practical Completion were to be issued every month; that was not challenged by Mr Taylor, Counsel for Treasure.
Under Clause 2.1, Treasure was to commence the Works on being given possession of the Site and to complete the same on or before the Completion Date. That date was to be subject to extensions of time in certain circumstances. Clauses 2.8 and 2.9 relate to Practical Completion of the Works:
“2.8.1 When in the opinion of the Architect/the Contract Administrator Practical Completion of the Works is achieved and the Contractor has complied sufficiently with Clause 5.22, he shall forthwith issue a certificate to that effect. Practical Completion of the Works shall be deemed for all the purposes of this Contract to have taken place on the day named in such certificate.
…..
2.9.1 If at any time or times before the date of issue by the Architect/the Contract Administrator or the certificate of Practical Completion the Employer wishes to take possession of any part or parts of the Works and the consent of the Contractor (which consent shall not be unreasonably delayed or withheld) has been obtained, then, notwithstanding anything express or implied elsewhere in this Contract, the Employer may take possession thereof. The Architect/The Contract Administrator shall thereupon issue to the Contractor on behalf of the Employer a written statement identifying the part or parts of the Works taken into possession and giving the date when the Employer took possession (in clauses 2.9, 6.1.3, 6.3.3 and 6.3C.1 referred to as the 'relevant part' and the 'relevant date' respectively).
2.9.2 For the purposes of Clauses 2.10.1 and 4.7.1.2 Practical Completion of the relevant part shall be deemed to have occurred and the Defects Liability Period in respect of the relevant part shall be deemed to have commenced on the relevant date.”
Following Practical Completion, provision was made during the Defects Liability Period for the Contractor to put right “defects, shrinkages or other faults” which appear up to 14 days after the expiry of that period
The Facts
Although Treasure had a number of contracts, apparently, with Mr Dawes relating to Dinmore Manor, the construction contract with which the adjudication was concerned was the primary contract and related to a number of buildings and areas of work. They are summarised at Paragraph 34 of the Adjudicator's decision document as comprising the Main House, Music School, Hay Store, Estate Office, Estate Services, Site Services and Landscaping.
It is clear that the works to be carried out pursuant to the construction contract with which the adjudication was concerned were very substantial. Indeed, Treasure's claims in the adjudication were predicated upon the basis that there was over £15m due overall to it. It identified that over £14m had already been paid.
Although I make no findings about this, it seems that the original Contractual Date for Completion was in November 2002. It also appears that the Practical Completion of the Works occurred at some time in December 2004. This appears from Paragraphs 120 to 125 of Treasure's Claim Documents. I should point out that there is some confusion about whether Practical Completion was certified in respect of the whole of the Works in December 2004. The Adjudicator referred in Paragraph 62 of his decision to the fact that Certificates of Practical Completion for three (only) of the elements of the Works which were the subject matter of this Contract were issued on or about 13 th December 2004.
It is common ground that, following December 2004, Treasure remained at the site completing what it says was a substantial amount of outstanding works and putting right various alleged defects. Treasure assert (and it is unnecessary for me to find) that all the works were finally complete and defects put right by mid-2007.
Treasure submitted to Mr Dawes (or his advisers) a Claim Document dated 12 th March 2007. In that claim, Treasure claimed a net sum of £1,619,669.04 or, alternatively, £1,732,107.24. A substantial element of the claim was for “Additional Overhead Costs”: this was a claim for additional Head Office overheads to reflect the period of time between December 2004 and February 2007 to reflect the fact that Treasure (as it claimed) was on site completing some contractual work and extra works over that period. A comprehensive calculation of that sum (26 months – December 2004 to February 2007 at the rate of £24,398.49 a month) £634,360.74 is provided.
Other elements of the claim included VAT, additions to the Prime Costs, claim preparation...
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