WRW Construction Ltd v Datblygau Davies Developments Ltd
| Jurisdiction | England & Wales |
| Judge | Andrew Singer |
| Judgment Date | 23 July 2020 |
| Neutral Citation | [2020] EWHC 1965 (TCC) |
| Date | 23 July 2020 |
| Docket Number | Case No: HT-2020-000184 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2020] EWHC 1965 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
RECORDER Andrew Singer QC
(sitting as a Judge of the Technology and Construction Court)
Case No: HT-2020-000184
Mr Crispin Winser (instructed by DJM Law Ltd. Solicitors) for the Claimant
Mr Simon Hargreaves QC (instructed by Morgan La Roche Solicitors) for the Defendant
Hearing dates: 14th July 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Recorder Andrew Singer QC:
Introduction
This is an application for summary enforcement of an Adjudicator's revised Decision dated 8 th May 2020 (revised on 13 th May 2020). The Claimant who was the Responding Party to the adjudication seeks payment from the Defendant of £568,597.32 which it says is due either as awarded by the Adjudicator or as a necessary consequence of the award. The Defendant defends the Part 24 application and if judgment is granted, seeks a stay of execution. There is also an application by the Defendant relating to the Court fee paid by the Claimant.
Mr Winser appeared for the Claimant and Mr Hargreaves QC for the Defendant. I am grateful to them both for their helpful and comprehensive written and oral submissions. I have taken all of them into account in reaching my decision. The hearing was held remotely due to the COVID-19 restrictions, it was nevertheless a public hearing.
I remind myself that for the Part 24 application to succeed it must be demonstrated to the Court's satisfaction that there is no reasonably arguable defence to the claim i.e. a defence with a real as opposed to a fanciful prospect of success. The burden of proving the lack of a reasonably arguable defence is, of course, on the Claimant.
The Facts
The parties entered into an undated Contract incorporating the JCT 2011 Design and Build Conditions for the Claimant to design and build nine dwellings on a site behind 84 Whitton Road, Twickenham, London for a contract sum of £2.2 million.
This action and the application for Part 24 judgment arise out of the third adjudication between these parties. The second adjudication decision was dated 7 th December 2018 and has not been the subject of challenge or further proceedings and so remains binding on the parties. That adjudication decided that the contract was validly terminated by the Defendant in mid-2018.
The instant adjudication was commenced by the Defendant seeking a valuation of the post-termination final account. The Notice of Adjudication was dated 7 th February 2020. Under the heading “Claim and Relief” at Paragraphs 19 to 21 the following was stated:
“19. DDD [the Defendant] is entitled to and claims payment from WRW [the Claimant] of the sum of £3,345,790.40 (or such other sum as the Adjudicator shall determined is owed by WRW to DDD) pursuant to Clause 8.7 and/or as damages for breach of contract.
20. DDD invites the Adjudicator to determine the sums due and payable by WRW to DDD and to order payment of such sum by WRW to DDD within 7 days of his/her decision (or such other period as he/she shall determine).
21. DDD invites the Adjudicator to determine that his/her fees shall be payable by WRW.”
The exercise under Clause 8.7 of the Contract involves the carrying out of a valuation exercise pursuant to Clauses 8.7.4 and 8.7.5 of the Contract. Those clauses provide as follows:
“8.7.4. Following the completion of the Works and the making good of defects in them (or instructions otherwise as referred to in Clause 2.35), an account of the following shall within 3 months thereafter be set out in a statement prepared by the Employer:
8.7.5.1. The amount of expenses properly incurred by the Employer, including those incurred pursuant to Clause 8.7.1 and, where applicable, Clause 8.5.3.3, and of any direct loss and/or damage caused to the Employer and for which the Contractor is liable whether arising as a result of determination or otherwise;
8.7.4.2. The amount of payments made to the Contractor; and
8.7.4.3. The total amount which would have been payable for the Works in accordance with this Contract;
8.7.5. If the sum of the amount stated under Clauses 8.7.4.1. and 8.7.4.2 exceeds the amount stated under Clause 8.7.4.3, the difference shall be a debt payable by the Contractor to the Employer or, if that sum is less, by the Employer to the Contractor.”
In its Response at Paragraph 33 the Claimant made the following submission to the Adjudicator:
“The proper valuation of the post-determination final account in accordance with Clause 8.7.4 of the Contract leads to a position in which DDD is indebted to WRW. Whilst WRW accept that the Adjudicator has no jurisdiction to order payment to be made to WRW, the Adjudicator has been asked by DDD to value the post-terminational final account. It is respectfully submitted that the Adjudicator should find that the proper value of the post-termination final account is as set out above. Put another way, the Adjudicator should conclude that the sum due and payable by WRW to DDD is -£695,035.63.”
On its clear construction, it was in my judgment clearly accepted by the Claimant during the adjudication that the Adjudicator did not have jurisdiction to order a payment of money from the Defendant to it. It is equally clear that the Claimant was seeking a decision that sums were due to it from the Defendant on the basis and as a result of the valuation of the account for which it contended.
The Adjudicator's revised Award includes under the heading “Final Assessment of the Claim” a table at Paragraph 389 and the following at Paragraph 390:
“I DECIDE AND FIND that my assessment of the total value of the account due to Clause 4.7.4.1 is an amount due as a debt from DDD to WRW as is permitted by Clause 8.7.5 in the sum of £568,597.32.”
That finding is in accordance with the contract's clear effect i.e. that whatever sum is found due to either the Contractor or Employer is due to that party as a debt. The adjudicator's finding is then mirrored in Section K of the Award under the heading “DECISIONS ON THE REMEDIES SOUGHT”. At Remedy B the Adjudicator stated:
“I decide that WRW shall pay to DDD the sum of -£568,597.32 ( negative) within 7 days of the date of my Decision.”
Although that sentence even as revised is expressed in somewhat opaque language, nevertheless it is clear, in my judgment, that the Adjudicator was seeking to award a payment to the Claimant from the Defendant of the sum sought in these proceedings, having decided the balance of account between the parties.
The Claimant's Particulars of Claim include the following relief sought at Paragraph 29.1:
“An order that DDD pay to WRW £568,597.32 (plus the applicable VAT) in accordance with the Decision or the revised Decision or as a debt; alternatively judgment for damages in the same sum.”
At Paragraph 34 of his written Skeleton Argument Mr Winser notes that it is now agreed that the Adjudicator had jurisdiction to value the post-termination final account. That agreement was confirmed during the hearing before me. Therefore the narrow issues in dispute at the hearing were whether the Adjudicator had jurisdiction to order a payment to the Claimant and/or whether payment is due to the Claimant as a result of the valuation exercise which temporarily binds the parties. Mr Winser now accepts that Paragraph 20(b) of the Scheme does not give rise to a stand alone right to order payment. As the hearing proceeded, the issue as to enforcement narrowed further because Mr Winser accepted that he was not making a positive submission that the Adjudicator did have jurisdiction to order payment of a sum of money. The parties agreed that the sole issue which the Court now has to determine on the enforcement application is whether in the light of a binding valuation exercise by the Adjudicator, the Claimant is also entitled to be paid the sums claimed in accordance with that valuation.
Legal Principles and Submissions
Mr Hargreaves QC for the Defendant argues that the Court cannot make an order for payment on the basis of the Award because, he says, that is impermissible without a valid order for payment from an Adjudicator and he says that absent the same, such an order for payment now would involve the Court making a final determination on the merits of the post-termination valuation account which would bar any attempt to reclaim overpayments in subsequent litigation. He prays in aid of those submissions the decisions of the Supreme Court in Aspect Contracts v. Higgins Construction [2015] UKSC 38 and Bresco Electrical Services v. Michael J Lonsdale (Electrical) [2020] UKSC 25, the decision of the Court of Appeal in Clark v. In Focus Asset Management and Tax Solutions Ltd [2014] EWCA Civ 118 and of the High Court in P C Harrington Contractors v. Multiplex Construction (UK) [2007] EWHC 2833 (TCC), a decision of Christopher Clarke J (as he then was).
Both parties referred me to Paragraph 14 of the judgment of Lord Mance JSC in Aspect. In that paragraph the learned Justice states:
“By providing that the decision of an adjudicator is binding and that the parties shall ‘comply with it’, Paragraph 23(2) of the Scheme makes the decision enforceable for the time being. It is enforceable by action founded on the contractual obligation to comply with the...
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