Yorkshire Water Services Ltd v Taylor Woodrow Construction Northern Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 18 October 2002 |
| Neutral Citation | [2002] EWHC 2140 (TCC) |
| Docket Number | Case Number HT 01 289 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 18 October 2002 |
[2002] EWHC 2140 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Humphrey LLoyd QC
His Honour Judge Humphrey Lloyd Qc
Case Number HT 01 289
Timothy Elliott QC appeared for the Part 20 Defendant (3) (Elga), instructed by Shadbolt & Co.
David Streatfeild-James QC and Fiona Parkin appeared for the Part 20 Claimant (3) (Biwater), instructed by Masons.
Dates of Judgments 3 and 18 October 2002
Pursuant to the Practice Statement of 22 April 1998 this is the official judgment of the court and no note or further record is to be made.
JUDGMENT (No 1)
October 2002
I deal first with an initial issue: is Part 11 the appropriate provision of the Civil Procedure Rules? The applicant, Elga, is the defendant to a Part 20 claim brought against by Biwater which itself a Part 20 defendant to a claim by Taylor Woodrow which has been sued in the main action by the employer, Yorkshire Water. Biwater is thus a sub-contractor and Elga a sub-sub contractor.
Elga seeks an order that the court has no jurisdiction to try the claims advanced by Biwater against it, as set out in the Part 20 claim; alternatively that it should not exercise that jurisdiction on the grounds, as set out in its application form. First, the immediate Part 20 claimant, Biwater, has no cause of action against Elga and there is no issue over which the court could have jurisdiction. Elga then refers to the main action and says that Yorkshire Water had no cause of action against Taylor Woodrow and has no cause of action today. Accordingly, there is no basis for Taylor Woodrow to claim from Biwater in respect of any liability to Yorkshire Water and likewise Biwater has no basis for claiming in respect of the same from Elga. The second ground is that, in any event, none of the claims advanced by Biwater against Elga has been (a) submitted by Biwater to Elga prior to 20 December 2001; (b) referred for resolution by negotiation as is mandatory in respect of all such claims as a result of clause 3 of the said contract between Biwater and Elga; or (c) referred to decision by adjudication in the event of failure to resolve by negotiation as is also mandatory as a result of clause 3. The third ground is, in so far as Biwater seeks to recover from Elga a sum by way of financial reimbursement equivalent to whatever sum might be due from Taylor Woodrow to Yorkshire Water pursuant to clause 36.7 of the main contract, any dispute as to the quantum of such claim is a matter exclusively for decision by expert determination and not by the court.
The action commenced by Yorkshire Water against Taylor Woodrow relates to the Knopstrop sewage treatment works. Yorkshire Water says that it has defects and does not do that which the contract promised. Yorkshire Water has undertaken some remedial work and has incurred a lot of costs. It is in the course of undertaking further remedial work and is incurring many more costs. The contract between Yorkshire Water and Taylor Woodrow contains, amongst other things, the standard form of contract published by the Institution of Chemical Engineers. That includes clause 44.2 which says that:
"the liability of the Contractor to the Purchaser for any breach of contract shall be limited to the expenses, charges, damages and reimbursements expressly provided in the Contract."
Accordingly, in the eyes of the defendants and it seemed also probably in the eyes of Yorkshire Water (at least for the time being), many of the issues of law which arise out of the claim will be concerned with whether or not Yorkshire Water's claims are those expressly provided in the contract or are otherwise permissible. That is in part the justification for ground 1 in the application, but, as I indicated, I shall not deal with ground 1, since it is accepted and, in any event it is my view, that ground 1 should be considered on another occasion. I shall deal with grounds 2 and 3 later.
Taylor Woodrow subcontracted part of the work to Biwater and Biwater subcontracted controls and other parts to Elga. There are therefore typical relationships and these are typical proceedings. The claim by Yorkshire Water against Taylor Woodrow has been passed on by Taylor Woodrow to Biwater in the Part 20 proceedings and so by Biwater to Elga in these Part 20 proceedings. Biwater rely on a clause in Elga's sub-contract which, if Elga is in breach of contract, provides an indemnity against Biwater's potential liability to Taylor Woodrow, as well as making Elga liable for Biwater's own costs. A great deal of effort has already been made to try and avoid the case coming to trial. As set out in the evidence, there have been attempts to obtain a resolution of all or part of the dispute by negotiation, mediation and possibly other forms. There has been a stay of the proceedings to enable the resolution of the dispute to be explored.
The costs have mounted. The trial is fixed for April next year. Elga, which was brought in relatively late, made it clear at a case management conference in June that it considered that the proceedings brought not only by Yorkshire Water but in turn derivatively by Biwater against it, were misconceived and untenable, for a number of reasons then advanced by Mr. Elliott in a carefully prepared skeleton argument, and that it intended to take such steps as were open to it in order to get out of this litigation altogether, a position which, on further consideration, may have been modified to the extent of accepting that it may not be possible to get out forever but merely for the present.
It was left at the case management conference that Elga would consider its position and decide what it was going to do. The order then made included certain provisions. First, as a preliminary, the case management conference was adjourned until 18 October, amongst other things, to consider preliminary issues suggested by Elga. Secondly, and relevantly for today's purposes, there was a provision that Elga was to issue and serve any application in relation to jurisdiction by 25 June and, then, by 29 August to notify all parties and the court whether it was intended to pursue that application and, if so, in relation to which parts of Biwater's claims. If that application was to be heard then it would be heard as it has now been heard before me yesterday and today. Elga did in fact so notify the parties and did make the application to which I have referred. It has framed its application under Part 11 of the Civil Procedure Rules. That says:
"(1) A defendant who wishes to—
(a)
dispute the court's jurisdiction to try the claim; or
(b)
argue that the court should not exercise its jurisdiction,
may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have."
As that intention had been signalled, the order was made with such a step in mind.
Such an application is, on the face of it, a little unusual where a party in the position of Elga simply wishes to say that the claims against it are misconceived or that there is no cause of action against it. However, it maintains that it is open to a defendant in such a position to utilise Part 11 where there is effectively no cause of action. Without anticipating too much the detailed and measured arguments of Mr. Timothy Elliott QC for Elga, they are, in essence, that if the claim is bound to fail then it cannot be tried in any real sense and the court has therefore no jurisdiction to try it.
The defendant has chosen the mechanism under Part 11 partly, it seems, as a result of what I said in Bernhards Rugby Landscapes v. Stockley Park Consortium when I heard and decided certain issues, in part on 7 February 1997 (82 BLR 39) and, in part, later, on 22 April 1998. On each occasion there were many issues to be resolved and, just as here, the arguments ranged quite widely. One of them on the second occasion related to whether Order 12, rule 8 of the Rules of the Supreme Court was appropriate where a party maintained that the contractual dispute resolution mechanism had not yet been implemented or exhausted and accordingly the commencement of an action prior to that time was wrong whereby the claim was not justiciable. The wording of the Rules of the Supreme Court referred to the fact that objection could be taken to the jurisdiction on grounds of irregularity (as set out in Order 12 rule 7) and "on any other ground". It provided that the court might make a declaration that in the circumstances of the case the court had no jurisdiction over the defendant in respect of the subject matter of the claim or the relief or remedy sought in the action. I took the view, on the arguments presented to me on that occasion, that Order 12 rule 8 was clear and wide, that there were apparently no authorities on it and that it was open to a defendant to use and, indeed, that it ought to use that provision when it wished to say that the contractual mechanism was such that a claim was not maintainable.
In the case of Halifax Financial Services v. Intuitive Systems Ltd. [1999] 1 All ER (Comm) 303 the same approach was adopted. I am told by Mr. Streatfeild-James QC (who appeared with Miss Parkin for Biwater) that that course was followed in the light of my earlier judgment. In the course of his judgment McKinnon J. said of my judgment that it supported rather than contradicted the principle that the court retains jurisdiction. He said very shortly, tersely but clearly:
"I regard the application under Order 12 rule 8 effectively as a non-starter."
In these circumstances I...
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