Building contract – Construction – Defendant engaging claimant to carry out construction works – Completion of subcontract works delayed – Claimant applying for payment – Defendant seeking to deduct sum for delay and disruption – Whether claim giving rise to dispute capable of being referred to adjudicator – Whether disputed claim being withdrawn – Claim allowed
The claimant company was a building and civil engineering subcontractor and the defendant was the main contractor in respect of certain works on the M3 motorway. In November 2006, the defendant employed the claimant to carry out construction services to provide ducts and cabling on the motorway.
The parties subcontract was based upon the ICE form of subcontract (September 1991 with 1998 amendments) and was a remeasurement contract, which none the less allowed for the ordering of variations and their valuation for payment purposes. The subcontract identified the completion period as being 26 weeks, but the works overran.
Following the claimant’s submission of two applications for payment, (applications 13 and 14) and the imposition of various set-offs by the defendant, adjudication was commenced. The adjudicator decided that a net sum of £745,657.64 was due to the claimant. The defendant failed to honour that decision and the claimant applied for summary judgment to enforce the award.
The main issues before the court were whether there was a sufficient dispute (if any) to be referred to adjudication, in particular whether a claim for £300,000, deducted by the defendant for delay and disruption, was so nebulous and ill-defined as to be unable to give rise to any dispute; alternatively, whether any claim giving rise to a possible dispute had been withdrawn.
Held: The claim was allowed.
If the claim as presented by the claimant was so nebulous and ill-defined that the defendant could not sensibly respond to it; neither silence by the defendant nor an express non-admission was likely to give rise to a dispute for the purposes of arbitration or adjudication. To determine whether a claim fell into that category, it was necessary to consider all the surrounding circumstances. A one-line claim might be briefly described but, when one considered what both parties were doing and saying at the relevant time, it might not be so nebulous or ill-defined: Cruden Construction Ltd v Commission for the New Towns [1995] 2 Lloyd’s Rep 37, Amec Civil Engineering Ltd v Secretary of State for Transport [2005] EWCA Civ 291; [2005] PLSCS 55; [2005] 12 EG 219 (CS) and Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358; [2006] BLR 15; [2005] PLSCS 207 considered.
In the instant case, the claims made in applications 13 and 14 in context were not so nebulous and ill-defined as to be incapable of giving rise to a dispute. The claim for £300,000 was merely one of 150 sub-claims within the applications. The claim for delay and disruption was within the substantial part of the applications that related to variations. Thus, it was or should have been clear to all concerned that the primary basis for any claim for delay and disruption related to variations. With regard to the issue of application 14, there was an established dispute between the parties as to whether the claimant was entitled to the full amount claimed and that was the dispute ultimately referred to adjudication.
In general, there could be nothing wrong with the proposition that a dispute might cease to be a dispute by reason of an agreement between the parties or an unconditional withdrawal of the claim or assertion that gave rise to the dispute. However, the court needed to consider whether the claiming party was intending to abandon or merely temporarily suspend or hold back any entitlement which it might have had to pursue dispute resolution processes laid down by the contract in question. There might, in context, be a difference between a party that indicated that it would hold its claim in abeyance because that might imply, in the circumstances, something less than a withdrawal. A withdrawal of a disputed claim might give rise to a substantive defence in any subsequent dispute resolution process.
However, on the evidence the claim under applications 13 and 14 had not been withdrawn. Nor was there any agreement that the claimant was in some way prevented from pursuing its disputed claims in adjudication.
Sarah Hannaford QC and Samuel Townend (instructed by SLS Solicitors) appeared for the claimant; Alexander Nissen QC (instructed by Fenwick Elliott) appeared for the defendant.
Eileen O’Grady, barrister
