Wimbledon Construction v Vago
| Jurisdiction | England & Wales |
| Judge | HIS HONOUR JUDGE PETER COULSON Q.C |
| Judgment Date | 20 May 2005 |
| Neutral Citation | [2005] EWHC 1086 (TCC) |
| Docket Number | Case No: HT-05106 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 20 May 2005 |
[2005] EWHC 1086 (TCC)
His Honour Judge Peter Coulson Q.C.
Case No: HT-05106
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
MISS CHANTAL-AIMEE DOERRIES (instructed by TWM) appeared on behalf of the Claimant.
MR SIMON HUGHES (instructed by Mischcon De Reya) appeared on behalf of the Defendant.
APPROVED JUDGMENT
HIS HONOUR JUDGE PETER COULSON Q.C:
Introduction
On the 16 th August 2003 the Defendant, Mr. Derek Vago, engaged the Claimant, Wimbledon Construction Company 2000 Limited, to carry out extension and refurbishment works at his house at 51, Drax Avenue, London, SW20. The contract sum was £209,94Disputes arose between the parties and, on the 17 th January 2005, the Claimant commenced an adjudication pursuant to the terms of that contract. On the 21 st February 2005 the Adjudicator, Mr. Douglas Judkins, published his decision, the net effect of which was to award the Claimant the sum of £122,923.34, inclusive of VAT.
The sum of £122,923.34 was not paid and so, on the 26 th April 2005, the Claimant commenced these enforcement proceedings. At about the same time the Defendant commenced arbitration proceedings against the Claimant in which it seems clear that many of the Adjudicator's findings in favour of the Claimant will be challenged. In these proceedings the Defendant has consented to judgment being entered and has offered to pay the sum of £122,923.34 into court. That offer has been refused. The Defendant now seeks an order that enforcement be stayed, pending the outcome of the arbitration proceedings, on the grounds of the Claimant's uncertain financial position.
In addition, the Claimant seeks summary judgment for £6,507.97, being the agreed value of post-contract works carried out at the property. The Defendant does not dispute this figure but maintains that he has a set-off and counterclaim in respect of alleged defects in the heating and ventilation works which, so it is said, operates as a complete defence to this element of the claim.
I propose to deal first with the claim for £6,507.97, and then to go on to address the important issue that arises out of the Defendant's application to stay execution. In considering these points I have been greatly assisted by the clear and concise submissions of Mr. Hughes, who appeared on behalf of the Defendant, and Miss Doerries, who appeared on behalf of the Claimant.
The Claim for £6,507.97.
The Claimant made a claim in the adjudication for £9,669.84, plus VAT, in respect of works carried out at the property after the contract had reached practical completion. The Defendant valued those works at £5,538.70, plus VAT, which made a total of £6,507.97, but he argued that the Adjudicator had no jurisdiction to consider such a claim, a submission which the Adjudicator accepted. The Claimant now seeks summary judgment in respect of the sum of £6,507.97 on the basis that it is the Defendant's own figure for the post-contract works.
The Defendant maintains that summary judgment for £6,507.97 should not be granted because of the existence of his counterclaim against the Claimant relating to defects in the heating and ventilation works. This cross-claim was originally valued at £8,000-£12,000 in paragraph seven of Mr. Steele's statement. The only documents which relate in any way to the alleged cross-claim are a fitter's report, from R.J. Mechanical Limited, apparently dated the 28 th February 2005, and another document from R.J. Mechanical, entitled "Budget Costs", and apparently dated March 2 nd 2005.
Miss Doerries for the Claimant argues that I should disregard the cross-claim completely because the dates of the documents are not clear. She says the fact that the budget costs document refers to a schedule of outstanding works, dated 24 th January 2005, indicates that this entire cross-claim was a matter which could and should have been raised in the adjudication. I do not accept that submission. All the documents bear or refer to dates which were after the commencement of the adjudication, and both the fitter's report and the budget costs document clearly post-date the Adjudicator's decision.
Miss Doerries is on much stronger ground in complaining that the nature of the counterclaim is extremely vague. There is, she says, no apparent correlation between the fitter's report and the budget costs document. Even more significantly, there is no attempt to identify how and why the items in either document could be said to constitute a breach of contract on the part of the Claimant. Furthermore, the budget costs document amounts to £4,372.21, a lot less than the amount identified in Mr. Steele's statement.
Mr. Hughes concedes, rightly in my view, that the counterclaim cannot be valued at more than £4,372.21 because that is the amount in the budget costs document. He contends however that the two documents to which I have referred are sufficient to defeat the claim for summary judgment, at least up to that amount.
In my judgment the uncertainty within the Defendant's own evidence as to what the proposed cross-claim might be worth typifies the fact that next to no analysis or particularity has been provided in respect of this proposed claim. I accept the Claimant's submissions that it is wholly unclear how or why the items in either the fitter's report, or the budget costs document, are or could be breaches of contract on the part of the Claimant. It is just not clear what, if anything, it is said the Claimant should or should not have done under the terms of its contract. It may be that in the forthcoming arbitration a sound claim in respect of such defects can be put together, but, on the very scant information available to me, I am bound to conclude that the Defendant has no real prospect of successfully defending the claim for an agreed sum by reference to this proposed set-off and counterclaim. It is simply too equivocal and uncertain. It is therefore appropriate for me to give summary judgment in respect of the claim for £6,507.97 in respect of post-contract works.
Mr. Hughes argued, by reference to paragraph 24.2.6 of Volume 1 of the White Book, that, even if I granted summary judgment, I should stay execution because of the existence of the counterclaim. For the reasons noted above, I do not consider that such a course is appropriate. The reasons why I have concluded that there should be summary judgment inevitably mean that I should also refuse a stay. On the material before me, there is no counterclaim with a real prospect of success. In the alternative, Mr. Hughes submitted that I should stay execution because of the financial position of the Claimant. This, of course, leads me on to the critical issue between the parties: the interaction between the adjudication process, on the one hand, and RSC Order 47, on the other.
The Relevant Authorities
It is unnecessary for me in this judgment to set out in detail the various authorities relating to the adjudication process. Adjudication was introduced by the Housing Grants, Construction and Regeneration Act 1996 to provide a quick and inexpensive procedure whereby parties to a construction contract can be given an answer to any dispute between them within 28 or 42 days. That answer is at least temporarily binding, until challenged in substantive court or arbitration proceedings. The Scheme in the 1996 Act has now been adapted and introduced into a number of the standard forms of building and engineering contracts. In this case the contract between the parties incorporated the JCT Minor Works Form 1998 Edition, including amendments one to four. Section D of the contract set out detailed provisions in respect of adjudication, including at D7 particular provisions relating to the effect of any Adjudicator's decision:
"D 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.
D 7.2 The parties shall without prejudice to their other rights under this agreement comply with the decision of the Adjudicator and the employer and the contractor shall ensure that the decision of the Adjudicator is given effect.
D 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 D 7.1"
It has been said on a number of occasions by the Court of Appeal that the decision of an Adjudicator is intended to be enforced summarily. The contract provisions in this case, which I have just read, and which are by no means untypical, make that point clear. The presumption is that the successful party, the likely claimant in any enforcement proceedings, should not be kept out of its money.
What happens if the unsuccessful party, the likely defendant in any enforcement proceedings, is concerned that, if the sum awarded by the Adjudicator is paid out, the claimant's financial position is such that the money may never be repaid? In such circumstances the defendant will seek a stay of execution by relying on RSC Order 47, which remains part of the CPR by operation of Part 50. For today's purposes the relevant part is Rule 1(a) which provides as follows:
"(1) Where a judgment is given or an order made for the payment by any person of money and the court is satisfied on an application made at the time of the...
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