YCMS (t/a Young Construction Management Services) v Grabiner
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE AKENHEAD |
| Judgment Date | 30 January 2009 |
| Neutral Citation | [2009] EWHC 127 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-08–183 |
| Date | 30 January 2009 |
[2009] EWHC 127 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Mr Justice Akenhead
Case No: HT-08–183
Gaynor Chambers (instructed by Colman Coyle LLP) for the Claimant
Riaz Hussain (instructed by Greenwoods) for the Defendants
Hearing dates: 16 and 31 January 2009
Introduction
YCMS Limited (“YCMS”), the Claimant, applies for summary judgment to enforce the Decision of an Adjudicator, that Decision being dated 27 October 2007, issued on 29 October 2007 but collected on 31 October 2007. Issues are raised as to the jurisdiction of the Adjudicator, whether the Adjudicator was entitled to revise his Decision, whether the revision should have been made without giving the Defendants the opportunity of being heard, whether a Second Award effectively duplicated the decision in the First Award and whether the Defendants can set off sums awarded in their favour under a Third Award.
The history
YCMS is a construction company. Mr and Mrs Grabiner, the Defendants, are the owners of Heath House, Turner Drive, London NW11 (“the Property”); this was their residence.
By a building contract in writing which incorporated the JCT Intermediate Form (including all amendments up to and including 2005), the Defendants employed YCMS to carry out extensive works at the Property. The Defendants' Architect was Graham Wright. The original contract sum was £380,026.50. The commencement date was 27 February 2006 and the contractual completion date 10 September 2006.
It is clear that substantial variations were ordered which, on any account, involved the contract sum being increased to something over £1 million.
Interim (money) Certificates were issued by the Architect on a regular basis. Thus, on 26 April 2007, the Architect issued his Interim Certificate No. 12 which identified a gross value of work executed as £1,063,481.44, leaving after a deduction for retention of 2 1/2% a net gross sum of £1,036,885.03. Allowing for sums previously certified (£889,939.83), a total due on this Certificate, exclusive of VAT was £146,955.20.
On 12 June 2007, Certificate No. 13 was issued. In the court papers there are two versions, both signed by the Architect. One is entitled “Draft” and identifies a gross sum after retention of £1,087,879.17 and certifies as due, exclusive of VAT, the sum of £50,984.14. The other version identifies a sum of £1,086,908.17 (after retention) and identifies a total due exclusive of VAT of £50,013.14. Certificate No. 13 was not paid by the Defendants. A dispute arose as to whether or not either sum was payable to YCMS pursuant to Certificate No. 13 and also as to whether there was any justification for withholding earlier sums certified as due and VAT sums .
YCMS decided to refer this dispute to adjudication pursuant to the contractual adjudication clause in the contract. Mr David Watkins was appointed as Adjudicator. There is no suggestion that his appointment was invalid or that there was not a comprehensible dispute between the Parties relating to Certificate No. 13 or the other alleged non-payments.
The Adjudication
The Notice of Adjudication and the Referral Notice are materially in identical terms. The Referral Notice was dated and served on 17 September 2007. At that stage, the money dispute related not only to Certificate No. 13. Inclusive of VAT, a sum of £59,906.36 was said to be outstanding on Certificate No. 13. However, there was said to be a further sum or sums outstanding as unpaid on earlier certificates. The total amount certified was said to be (inclusive of VAT) £1,244,192.37 which left a balance after allowing for amounts paid of £1,111,613.66, a gross amount said to be unpaid of £132,578.70. Thus, a sum of £72,672.36 was said to be outstanding in respect of earlier certificates.
Part of the referred dispute related to when practical completion was achieved and another part related to whether and if so to what extent the YCMS remained liable for defects under the defects liability clause in the Contract. Little if anything turns on these two aspects of the dispute.
Before the Defendants submitted their Response in the adjudication (served at least in draft on 8 October 2007), they paid to the Claimants £72,672.36 on 24 September 2007. This was clearly intended to relate to the sums said to have been outstanding in relation to certificates prior to Certificate No. 13.
On 13 September 2007, YCMS had submitted their Valuation No. 14 to the Architect in the total sum of £1,318,030.11. On 2 October 2007, YCMS wrote to the Adjudicator (copied to the Defendants) referring to this Valuation No 14 and saying:
“We note that our Notice and Referral does not deal with the final account but only to specific items.
That said if there is the possibility that parties can mutually agree to extend your jurisdiction and if you have such suggestions then it will be appropriate that we be made aware of these and have time to consider these.”
The Adjudicator responded on the same day referring to Valuation No. 14:
“I refer to YCMS faxed letter to me this evening together with Valuation No. 14 which, for the present, I will designate the draft Final Account.
As YCMS have appreciated I realised on re-reading the Notice and Referral that the direction to be issued with the draft Final Account, contained within my letter to the Parties of 25 September 2007, exceeded my jurisdiction.
I therefore now invite both Parties to mutually agree to extend my jurisdiction to consider and decide on the Final Account which, given the current circumstances, I suggest excludes any additional works which are yet to be instructed.
I note that I received the Referral on the19th September 2007 and therefore without YCMS granting an extension of time I am required, at present, to publish my Decision by no later than the 17 th October 2007. However, time has been lost in the proceedings, with beneficial results, and as a consequence I now propose that YCMS agree to the date being extended to the 29 th October 2007.”
He called for an early response.
On 4 October 2007, YCMS wrote to the Defendants (copied to the Adjudicator) in the following terms:
“Further to your/Abacus suggestion of extending the jurisdiction of the Adjudicator to deal with the Valuation No. 14 we note that the Adjudicator is prepared to accept such a suggestion.
We request that you put forward a draft of agreement dealing with the extension to jurisdiction and the new timetable that needs to be agreed as a result of this.
Finally, I think it is best that this is agreed between the Parties and then put forward to the Adjudicator.”
Abacus was a claims consultant retained by the Defendants in relation to the adjudication.
On 4 October 2007, Abacus responded on behalf of the Defendants to the suggestion contained in the Adjudicator's letter of 2 October 2007 in the following terms:
“We have now received instructions from Mr and Mrs Grabiner with regards to the proposition contained within your facsimile transmission of 2 October 2007 that the Parties mutually agree to extend your jurisdiction to consider and decide upon the Final Accounts. Mr and Mrs Grabiner do not agree to such an extension of your jurisdiction.”
On 5 October 2007, Abacus wrote to YCMS in response to the latter's letter of 4 October 2007 in the following terms:
“… We have discussed, with our Clients, the Adjudicator's proposal to extend their jurisdiction to take into account the valuation of the Final Account and/or Valuation 14. Mr and Mrs Grabiner were not particularly happy with this idea and therefore instructed us to reject the proposal, which was done. A few minutes after our fax was sent to the Adjudicator the writer was made aware of your facsimile transmission. Your fax implies that you think there is some merit in such an extension of the Adjudicator's jurisdiction …”
The Adjudicator wrote to the Parties on 5 October 2007 in the following terms:
“I note and accept from Abacus's letter that the Respondent does not wish to extend my jurisdiction to appraise and decide on the Final Account …”
On 9 October 2007, the Architect issued what he called Certificate No. 14. This identified a gross valuation after retention of £1,052.510.48 which was some £34,000 less than that contained in either version of Certificate No. 13. The net result was that the total due on that Certificate exclusive of VAT was said to be £15,615.45. At the foot of Certificate No. 14 the following was written:
“The Certificate preceding this one is Certificate No. 12.”
By this the Architect seems to have been suggesting that no or no valid and enforceable Certificate No. 13 had been issued. That net sum with VAT totalling £18,348.15 was paid at about this time and certainly before the Adjudicator's Decision was issued. Accompanying Interim Certificate No.14 was a 20-page breakdown of how the sum certified had been reached.
The Defendants' Response (possibly in draft) served at about this time set out the following general Summary at Paragraph 4:
“As a general summary of our position and based on an assessment of the information available to us it is [the Defendants'] case that YCMS are not entitled to any further payments over and above those that have been made (postal strike excepted) at the time of this Response. The Adjudication notice refer[s] to Certificates 12 and 13 but these have been superseded by Certificate 14 which has been honoured by the Employer (subject only to the postal strike). Matters relating to Defects and the issue a Practical Completion Certificate have been fully dealt with by...
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