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England and Wales High Court (Technology and Construction Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Primus Build Ltd v Pompey Centre Ltd & Anor [2009] EWHC 1487 (TCC) (16 June 2009) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2009/1487.html Cite as: [2009] CILL 2739, 126 Con LR 26, [2009] BLR 437, [2009] EWHC 1487 (TCC) |
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
133- 137 Fetter Lane London EC4A 1HD |
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B e f o r e :
____________________
PRIMUS BUILD LIMITED |
Claimant |
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- and - |
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POMPEY CENTRE LIMITED SLIDESILVER LIMITED |
Defendants |
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Mr Gideon Scott Holland (instructed by Sellar Property Group) for the Defendants.
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Crown Copyright ©
Mr Justice Coulson :
1. INTRODUCTION
2. BACKGROUND
"26.1 Any notice to be given hereunder shall either be delivered personally or sent by fax. The addresses or numbers for service of the Employer and the Construction Manager shall be those stated in Schedule 1 or such other address or number for service as the party to be served may have previously notified in writing to the other party. A notice shall be deemed to have been served as follows:
26.1.1 if personally delivered at the time of delivery, or
26.1.2 if sent by fax at the time of transmission.
26.2 In proving such service, it shall be sufficient to prove that personal delivery was made or that the fax was properly addressed and despatched as the case may be."
3. GENERAL PRINCIPLES
'85. The objective which underlies the Act and the statutory scheme requires the courts to respect and enforce the adjudicator's decision unless it is plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair. It should be only in rare circumstances that the courts will interfere with the decision of an adjudicator …
86. It is only too easy in a complex case for a party who is dissatisfied with the decision of an adjudicator to comb through the adjudicator's reasons and identify points upon which to present a challenge under the labels "excess of jurisdiction" or "breach of natural justice" …
87. In short, in the overwhelming majority of cases, the proper course for the party who is unsuccessful in an adjudication under the scheme must be to pay the amount that he has been ordered to pay by the adjudicator. If he does not accept the adjudicator's decision as correct (whether on the facts or in law), he can take legal or arbitration proceedings in order to establish the true position.'
I note that here Pompey raise one point in each category, although the alleged breach of natural justice is also put as an excess of jurisdiction.
4. ISSUE 1 – THE SERVICE OF THE NOTICE OF ADJUDICATION
4.1 The Issue
4.2 General Principles Relating To Service
"(1) The parties are free to agree on the manner of service of any notice or other document required or authorised to be served in pursuance of the construction contract or for any of the purposes of this Part.
(2) If or to the extent that there is no such agreement the following provisions apply.
(3) A notice or other document may be served on a person by any effective means.
(4) If a notice or other document is addressed, pre-paid and delivered by post—
(a) to the addressee's last known principal residence or, if he is or has been carrying on a trade, profession or business, his last known principal business address, or
(b) where the addressee is a body corporate, to the body's registered or principal office,
it shall be treated as effectively served.
(5) This section does not apply to the service of documents for the purposes of legal proceedings, for which provision is made by rules of court."
4.3 Analysis
4.3.1 Was There A Failure To Serve In Accordance With Clause 26?
4.3.2 Consequences of Invalid Service
(a) this offer was made to the adjudicator, not Primus;(b) Pompey did not accept it;
(c) the extension that was granted by the adjudicator was for the time for Pompey's response, not the adjudication as a whole.
Thereafter, Pompey did not waive the jurisdiction point and, although they suggested that they might do so, Primus did not re-serve the Notice of Adjudication.
5. ISSUE 2 – THE BASIS OF THE ADJUDICATOR'S DECISION
5.1 The Issue
5.2 The Principles
5.3 Analysis
5.3.1 Were The Parties Agreed That The Profit Figures In The Accounts Were Irrelevant?
(a) The accounts were introduced by Primus as part of their reply. Contrary to Primus' argument now, there is nothing to indicate on the face of that document that the accounts were provided because they had been requested by Pompey. Moreover, the only part of the reply that actually deals with the accounts themselves is paragraph 21, which is in these terms:"In the absence of any proposal from Pompey, Primus therefore produced its own assessment of lost profits on a fair basis. As explained in the referral, Primus considered it fair to apply the contractually agreed 3% construction management fee percentage to the estimated cost of the office works. In so doing,(a) Primus has ignored its usual profit recovery on similar works of around 6% to 8%. In his statement, Mr Samms confirms that Primus's statutory accounts for the period ending 31st December 2008 showed an earned gross profit of 6.9%.(b) Primus has also ignored the likelihood that ECH's costs estimate would have increased had the office works been carried out. See paragraph 9 of Mr Sammes' statement confirming this as a real possibility."(b) In their rejoinder at paragraph 30, Pompey say this about that passage in the reply:
"As to the first point [that is to say the argument that Primus had ignored its usual profit recovery on similar works of around 6% to 8%], it is simply not relevant what percentage profit Primus usually makes on other jobs. Each job is different and it cannot be reasonably assumed that the profit made on one job would also be made on another. For the same reason, it is not relevant what Primus expected to make on the office works. As explained above, besides the litigation point, the issues to be decided are what was the actual effect of the termination of the office works and, therefore, what is required to restore Primus to the position it would have occupied if that termination had not occurred? To answer those questions it is not relevant to consider Primus's expected or 'usual' level of profit, but fairness and legal principle require that the methodology adopted by Mr Cook and summarised at paragraph 22 of the response should be applied."
5.3.2 Was There A Breach Of Natural Justice?
"…the adjudicator should have made clear to the parties that, although they agreed that they had contracted on the basis of the LOI, he was intending to decide whether or not that was so, and should have given the parties the opportunity to make submissions on the question of contract formation (as opposed simply to the operation or otherwise of the cap). By not doing so, the adjudicator acted in breach of the rules of natural justice with the consequence that the court would be slow to give summary judgment to enforce the decision."
5.3.3 Was The Breach Significant Or Material?
5.3.4 Summary
6. GENERAL OBSERVATIONS ON COSTS
(a) The claim was for £100,000-odd, and just under £50,000 of that was the subject of the decision, albeit on a basis that was entirely different to that put forward by Primus.(b) Although I do not have figures for the costs that the parties incurred in the adjudication itself, I note that they must have been quite high because there were four rounds of documents (referral, response, reply, and rejoinder). Each document was extensive and came with other documents attached. Solicitors were involved. The adjudicator's fees alone were over £10,000.
(c) The enforcement proceedings have themselves cost a total of £30,000.