| Westshield Civil Engineering Ltd and another company v Buckingham Group Contracting Ltd [2013] EWHC 1825 (TCC) Queen’s Bench Division, Technology and Construction Court 28Jun2013 Mr Justice Akenhead JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS) MR JUSTICE AKENHEAD: Introduction 1. These proceedings are for the enforcement of an adjudicator The Factual Background 2. Buckingham Group Contracting Ltd ( 3. For reasons which are not obvious, the unsigned form of sub-contract headed
Part IV in relation to the final payment stated that: 4. There was a relatively standard adjudication clause, incorporating the ICE Adjudication Procedure but Clause 14(6) was in these terms:
It is common ground that the parties contractually opted for litigation and not arbitration. 5. The Sub-Contract Works were started in December 2011 and seven applications for payment were submitted to Buckingham between January and July 2012. It seems to be common ground that the work was completed in July. On 17 July 2012, WL or Civil Engineering submitted its final application which identified a gross value of The Adjudication 6. Buckingham commenced an adjudication against Civil Engineering by a Notice of Adjudication dated 5 December 2012. The relief claimed by Buckingham was for a declaration that the sum due to Civil Engineering was 7. Civil Engineering put in its detailed Response on 28 December 2012 which ran to 126 pages. The first threshold point made was that there had been an error by Buckingham in writing in the name of Civil Engineering into the Sub-Contract Order, given that Civil Engineering was dormant and that most of the preceding exchanges were with WL, stating at Paragraph 2.06:
The Response went on to assert that the true overall value of the Sub-Contract Works was 8. Buckingham replied on 4 January 2013 asserting unequivocally that the Sub-Contract was between it and Civil Engineering, averting to the fact that WL had been placed into a creditor 9. It is common ground that the adjudicator was by agreement given jurisdiction to determine the issue as to who the proper Sub-Contractor was. The adjudicator produced his decision on 16 January 2013 which comprises 14 pages of prose as well as a schedule which analyses the account. With regard to the issue relating to the identity of the Sub-Contractor, he said as follows (referring to Civil Engineering as
10. He then analysed the state of the account and decided as follows:
11. Civil Engineering sought payment of the net sum due consequential upon this decision and, no payment being forthcoming, it instituted a second adjudication serving a Notice of Adjudication dated 27 March 2013 on Buckingham; this effectively sought payment. Mr Brian Eggleston was appointed adjudicator. Somewhat surprisingly however, Buckingham sought to persuade Mr Eggleston that the decision was not enforceable because Civil Engineering was not the correct party to the Sub-Contract; this was completely contrary to the stance which it had taken in the adjudication. Mr Eggleston declined jurisdiction. It is clear from the internal e-mail set out below Buckingham was engaged on a relatively tactical manoeuvre. 12. An interesting e-mail dated 18 January was disclosed, somewhat surprisingly, by Buckingham. It was written by Buckingham
The Manchester Proceedings 13. Unbeknownst to WL and Civil Engineering, on 13 February 2013 Buckingham issued (but did not before the hearing in this Court serve) proceedings against Civil Engineering and WL as First and Second Defendants in the TCC in Manchester. There were no Particulars of Claim but the
14. Under the Civil Procedural Rules, service does not have to be effected for four months thereafter. As at the date of the hearing before this Court, the Claim had not been served on either Civil Engineering or WL. These Proceedings 15. For reasons best known to themselves, Civil Engineering and WL issued Part 7 (as opposed to Part 8) proceedings seeking enforcement of the decision. Declarations were also sought that Civil Engineering and Buckingham were bound by the decision, that WL, Civil Engineering and Buckingham were bound by the decision of the adjudicator as to the proper identity of the Sub-Contractor and that Civil Engineering was entitled to be paid the difference between the gross sum found to be due and the sums previously paid, namely the balance of 16. There was confusion as to whether these were properly constituted Part 8 proceedings or whether they should be dealt with as Part 7 proceedings with a summary judgement application. In the light of there being no material issues of fact on what I have to address, these procedural issues are immaterial. Directions were given to bring this matter on within a short period of time and the parties were, broadly, able to comply with the directions leading up to the hearing. Two witness statements were submitted from Mr Kite on behalf of Civil Engineering and WL with his clients doing a comparable volte-face and hinting that on reflection the Sub-Contract was or may well have been with Civil Engineering and two witness statements put in by Mr Hyland on behalf of Buckingham. C still reserved its position on this at the hearing . . 17. A number of issues have emerged through those statements and the skeleton arguments of Counsel:
There were some other issues such as whether or not the sum identified as due was payable in the light of two Discussion 18. I will consider first the issue relating to Clause 14(6), the material part of which states:
In this case, litigation was the chosen final dispute resolution forum and therefore the issue revolves around when court proceedings can be considered to be commenced. More narrowly, the argument is between whether or not simply the issue of court proceedings amounts to commencement and whether there must be service before they can be considered to have been commenced. 19. There can be no doubt that Part 7 of the Civil Procedural Rules is applicable here. Part 7.2 is absolutely clear:
There is no absolute requirement that Particulars of Claim must be embodied within the Claim form. Part 7.4(1) gives the Claimant the option of either incorporating them within the Claim form or serving them with the Claim form. 20. These Rules distinguish between the issue of proceedings and the service of proceedings. CPR Part 7.5 lays down that for claim forms to be served within the jurisdiction there must be service 21. In my judgment, there can be no doubt therefore that proceedings in England and Wales are started (or synonymously 22. What is therefore left by way of argument on behalf of the Claimants is that there must be a commercial or purposive interpretation of Clause 14(6) which reads the word
23. The next argument deployed by Mr Moran QC for the Claimants was that the 24. CPR Part 16.2 specifies that the claim form must:
25. The 26. Accordingly, the adjudicator 27. Turning to the issue of approbation and reprobation, this is essentially an immaterial issue. There is no doubt that Buckingham has taken a tactical approach albeit I can not find that the tactics started when Buckingham addressed the adjudication proceedings to Civil Engineering, knowing that in reality the Sub-Contract was with WL. Since the adjudication was started however, it is believed that it has been able to take advantage of the confusion as to who the Sub-Contractor was; that is clear from its solicitor 28. The doctrine of approbation and reprobation is relied upon here to say that it is not open to Buckingham to challenge the adjudicator 29. The final issue relates to whether or not there should be a stay of execution. Miss Cheng on behalf of Buckingham has, clearly and wholly properly, accepted that the decision of the adjudicator is binding upon Buckingham pro tem 30. So far as the stay of execution is concerned, there have been a number of cases which identify what the practice is such as Wimbledon Construction Co 2000 Ltd v Derek Vago [2005] BLR 374, Mead General Building Ltd v Dartmoor Properties Ltd [2009] BLR 225 and Pilon Ltd v Breyer Group Ltd [2010] BLR 452. I do not intend to repeat material parts of the judgments in those cases. It is obviously material not only that Civil Engineering is a dormant company (and indeed has been since incorporation) but that it was also a dormant company as at the time that the Sub-Contract was entered into. 31. In any event, WL has agreed to guarantee any of Civil Engineering 32. In reality, there are two or possibly three grounds relied upon by Buckingham. The first is that the cause of action by which Buckingham could recover from Civil Engineering any sums ordered to be paid by this judgment is 33. The second and third grounds relate to the financial position of Civil Engineering and WL with Civil Engineering having no assets to speak of and being a dormant company and WL having been subject to a Creditors Voluntary Arrangement for 2Wimbledon Construction case, a stay will not usually been granted if 34. Another, less significant but still material, factor is the tactical approach adopted by Buckingham in going to adjudication in the first place and thereafter seeking to confuse matters. It expressly knew when it started the adjudication that Civil Engineering was dormant and it must have known of the risk that Civil Engineering would assert that there was substantially more due to it than had been paid by Buckingham. The solicitors 35. For these reasons, I do not consider that it is or can be appropriate for there to be a stay of execution. Decision 36. There will be judgment in favour of Civil Engineering in the sum of |
Westshield Civil Engineering Ltd and another v Buckingham Group Contracting Ltd
Westshield Civil Engineering Ltd and another company v Buckingham Group Contracting Ltd [2013] EWHC 1825 (TCC) Queen’s Bench Division, Technology and Construction Court 28Jun2013 Mr Justice Akenhead JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS) MR JUSTICE AKENHEAD: Introduction 1. These proceedings are for the enforcement of an adjudicator The Factual Background 2. Buckingham Group Contracting Ltd ( 3. For reasons which are not obvious, the unsigned form of sub-contract headed 9(2) Payment may be withheld or prejudiced [sic] if any of the Sub-Contractor 9(3) Within 60 days, unless stated elsewhere, of completion of the Sub-Contract Works, the Sub-contractor shall provide a detailed Final Statement of the value of works executed, which shall include all matters or things arising out of or in connection with the Sub-Contract or the execution of the Sub-Contract Works. The period within which payment of any sum due arising from submission of the Final Statement and the final date for payment under the provisions of this Sub-Contract shall be as detailed in Part IV of the Appendix, or as otherwise provided by this Agreement. Part IV in relation to the final payment stated that: 4. There was a relatively standard adjudication clause, incorporating the ICE Adjudication Procedure but Clause 14(6) was in these terms: on in accordance with clause 15 of this Sub-Contract. If no such proceedings are commenced within the said 28 days then the Adjudicator It is common ground that the parties contractually opted for litigation and not arbitration. 5. The Sub-Contract Works were started in December 2011 and seven applications for payment were submitted to Buckingham between January and July 2012. It seems to be common ground that the work was completed in July. On 17 July 2012, WL or Civil Engineering submitted its final application which identified a gross value of The Adjudication 6. Buckingham commenced an adjudication against Civil Engineering by a Notice of Adjudication dated 5 December 2012. The relief claimed by Buckingham was for a declaration that the sum due to Civil Engineering was 7. Civil Engineering put in its detailed Response on 28 December 2012 which ran to 126 pages. The first threshold point made was that there had been an error by Buckingham in writing in the name of Civil Engineering into the Sub-Contract Order, given that Civil Engineering was dormant and that most of the preceding exchanges were with WL, stating at Paragraph 2.06: The Response went on to assert that the true overall value of the Sub-Contract Works was 8. Buckingham replied on 4 January 2013 asserting unequivocally that the Sub-Contract was between it and Civil Engineering, averting to the fact that WL had been placed into a creditor 9. It is common ground that the adjudicator was by agreement given jurisdiction to determine the issue as to who the proper Sub-Contractor was. The adjudicator produced his decision on 16 January 2013 which comprises 14 pages of prose as well as a schedule which analyses the account. With regard to the issue relating to the identity of the Sub-Contractor, he said as follows (referring to Civil Engineering as 24a There was some disagreement about the correct identity of the Responding Party and the Referring Party was very firm in that the Contract had been placed with [Civil Engineering] and any references to [WL] are erroneous. I must agree with the Referring Party as the Contract Agreement is clear and unambiguous 10. He then analysed the state of the account and decided as follows: MY DECISION 25. I Declare that the sum due to the Responding Party under the Contract is 26. I Decide that as the sum due being greater than 27. I Decide that each party pays half the fees and expenses of the Adjudicator and accordingly I attach invoices each Party in equal sums of PAYMENT DUE 82. In relation to the contractual payment terms I find that money are due to WCEL but do not have jurisdiction, in this Adjudication, to order payment. I do FIND an amount due from [Buckingham] to WCEL .5% retention] from which previous payment should be deducted. INTEREST ON LATE PAYMENT 83. There is no overpayment to WCEL, on the contrary there is an underpayment and interest is due on such sum in accordance with the Sub-Contract or Statute.,, WHEN IS PAYMENT TO BE MADE 89. I FIND that payment is to be made by [Buckingham] to WCEL but as correctly stated in the Reply to the Response that direction is beyond my jurisdiction in this Adjudication – I can and have the jurisdiction to declare the sums due between the parties but the Notice of Adjudication does not give me the jurisdiction to make any award of sums to [Civil Engineering]. Neither was my jurisdiction enlarged during the currency of this Adjudication. 11. Civil Engineering sought payment of the net sum due consequential upon this decision and, no payment being forthcoming, it instituted a second adjudication serving a Notice of Adjudication dated 27 March 2013 on Buckingham; this effectively sought payment. Mr Brian Eggleston was appointed adjudicator. Somewhat surprisingly however, Buckingham sought to persuade Mr Eggleston that the decision was not enforceable because Civil Engineering was not the correct party to the Sub-Contract; this was completely contrary to the stance which it had taken in the adjudication. Mr Eggleston declined jurisdiction. It is clear from the internal e-mail set out below Buckingham was engaged on a relatively tactical manoeuvre. 12. An interesting e-mail dated 18 January was disclosed, somewhat surprisingly, by Buckingham. It was written by Buckingham The position is as follows: If WCEL seeks to enforce the Adjudicator There seems to be uncertainty as to whether WCEL is trading. If not, they will have great difficulty taking any further action at all Next steps and recommended strategy As you will appreciate, strategically WL/WCEL have got very few options and [Buckingham] is now in an excellent position, as we planned at the outset of this matter For WL/WCEL to have any success on contested proceedings, they will not get much change out of The Manchester Proceedings 13. Unbeknownst to WL and Civil Engineering, on 13 February 2013 Buckingham issued (but did not before the hearing in this Court serve) proceedings against Civil Engineering and WL as First and Second Defendants in the TCC in Manchester. There were no Particulars of Claim but the The Claimant claims: (1) damages for breach of contract from the First Defendant and/or alternatively Second Defendant; (2) payment of a debt and/or debts under the contract; (3) declaratory relief; (4) equitable relief; (5) interest thereon (6) such further or other relief as the Court thinks fit. 14. Under the Civil Procedural Rules, service does not have to be effected for four months thereafter. As at the date of the hearing before this Court, the Claim had not been served on either Civil Engineering or WL. These Proceedings 15. For reasons best known to themselves, Civil Engineering and WL issued Part 7 (as opposed to Part 8) proceedings seeking enforcement of the decision. Declarations were also sought that Civil Engineering and Buckingham were bound by the decision, that WL, Civil Engineering and Buckingham were bound by the decision of the adjudicator as to the proper identity of the Sub-Contractor and that Civil Engineering was entitled to be paid the difference between the gross sum found to be due and the sums previously paid, namely the balance of 16. There was confusion as to whether these were properly constituted Part 8 proceedings or whether they should be dealt with as Part 7 proceedings with a summary judgement application. In the light of there being no material issues of fact on what I have to address, these procedural issues are immaterial. Directions were given to bring this matter on within a short period of time and the parties were, broadly, able to comply with the directions leading up to the hearing. Two witness statements were submitted from Mr Kite on behalf of Civil Engineering and WL with his clients doing a comparable volte-face and hinting that on reflection the Sub-Contract was or may well have been with Civil Engineering and two witness statements put in by Mr Hyland on behalf of Buckingham. C still reserved its position on this at the hearing . . 17. A number of issues have emerged through those statements and the skeleton arguments of Counsel: (a) Given the impact of Clause 14(6) of the Sub-Contract, have not been served or, alternatively, that the Details of Claim are insufficient to be considered as a reference to the Court of the same dispute as was resolved by the adjudicator. (b) Has there been approbation/reprobation by Buckingham with regard to its shifting stance as to who the party was with whom it sub-contracted? (c) Even if the decision is to be considered as binding until final resolution of the dispute, should there be a stay of execution by reason of the fact that Civil Engineering is dormant and has no assets to speak of? There were some other issues such as whether or not the sum identified as due was payable in the light of two Discussion 18. I will consider first the issue relating to Clause 14(6), the material part of which states: In this case, litigation was the chosen final dispute resolution forum and therefore the issue revolves around when court proceedings can be considered to be commenced. More narrowly, the argument is between whether or not simply the issue of court proceedings amounts to commencement and whether there must be service before they can be considered to have been commenced. 19. There can be no doubt that Part 7 of the Civil Procedural Rules is applicable here. Part 7.2 is absolutely clear: (2) A claim form is issued on the date entered on the form by the court. There is no absolute requirement that Particulars of Claim must be embodied within the Claim form. Part 7.4(1) gives the Claimant the option of either incorporating them within the Claim form or serving them with the Claim form. 20. These Rules distinguish between the issue of proceedings and the service of proceedings. CPR Part 7.5 lays down that for claim forms to be served within the jurisdiction there must be service 21. In my judgment, there can be no doubt therefore that proceedings in England and Wales are started (or synonymously 22. What is therefore left by way of argument on behalf of the Claimants is that there must be a commercial or purposive interpretation of Clause 14(6) which reads the word (a) The word (b) The law applicable to this Sub-Contract is that of England and Wales and the parties must either have known or be taken to have known that it is the issue of proceedings within this jurisdiction which heralds the commencement of the proceedings. (c) Adjudication generally and under this Sub-Contract is a process primarily designed to provide a decision which is temporarily binding after a relatively summary procedure but which can be reversed in the tribunal selected by the parties for final dispute resolution. To take away the right of a party to take the dispute to that final tribunal requires clear wording. Although the parties here do provide for that right to be taken away, it is subject to a step being taken, commencement of proceedings within a time limit, which will have the effect of preventing the decision from becoming finally binding. In my view, one would need absolutely clear and express wording to the effect that the (d) It is argued that it is somehow unfair or non-commercial that the losing party to an adjudication can in some way for up to 4 months. It is neither unfair nor non-commercial. The winning party can go immediately to court to have the decision enforced and the TCC generally will bring the enforcement proceedings to a hearing within 3-4 weeks of the issue of the proceedings; that party therefore can secure the commercial benefit of a decision in its favour. The winning party must at least contractually be aware that in this country the other party may have issued but not yet served proceedings effectively challenging the adjudicator seek to secure the service of the Claim well before the 4 months are up. 23. The next argument deployed by Mr Moran QC for the Claimants was that the 24. CPR Part 16.2 specifies that the claim form must: (b) specify the remedy which the claimant seeks; (c) where the claimant is making a claim from money, contain a statement of value in accordance with rule 16.3 25. The 26. Accordingly, the adjudicator 27. Turning to the issue of approbation and reprobation, this is essentially an immaterial issue. There is no doubt that Buckingham has taken a tactical approach albeit I can not find that the tactics started when Buckingham addressed the adjudication proceedings to Civil Engineering, knowing that in reality the Sub-Contract was with WL. Since the adjudication was started however, it is believed that it has been able to take advantage of the confusion as to who the Sub-Contractor was; that is clear from its solicitor 28. The doctrine of approbation and reprobation is relied upon here to say that it is not open to Buckingham to challenge the adjudicator 29. The final issue relates to whether or not there should be a stay of execution. Miss Cheng on behalf of Buckingham has, clearly and wholly properly, accepted that the decision of the adjudicator is binding upon Buckingham pro tem 30. So far as the stay of execution is concerned, there have been a number of cases which identify what the practice is such as Wimbledon Construction Co 2000 Ltd v Derek Vago [2005] BLR 374, Mead General Building Ltd v Dartmoor Properties Ltd [2009] BLR 225 and Pilon Ltd v Breyer Group Ltd [2010] BLR 452. I do not intend to repeat material parts of the judgments in those cases. It is obviously material not only that Civil Engineering is a dormant company (and indeed has been since incorporation) but that it was also a dormant company as at the time that the Sub-Contract was entered into. 31. In any event, WL has agreed to guarantee any of Civil Engineering 32. In reality, there are two or possibly three grounds relied upon by Buckingham. The first is that the cause of action by which Buckingham could recover from Civil Engineering any sums ordered to be paid by this judgment is 33. The second and third grounds relate to the financial position of Civil Engineering and WL with Civil Engineering having no assets to speak of and being a dormant company and WL having been subject to a Creditors Voluntary Arrangement for 2Wimbledon Construction case, a stay will not usually been granted if 34. Another, less significant but still material, factor is the tactical approach adopted by Buckingham in going to adjudication in the first place and thereafter seeking to confuse matters. It expressly knew when it started the adjudication that Civil Engineering was dormant and it must have known of the risk that Civil Engineering would assert that there was substantially more due to it than had been paid by Buckingham. The solicitors 35. For these reasons, I do not consider that it is or can be appropriate for there to be a stay of execution. Decision 36. There will be judgment in favour of Civil Engineering in the sum of
