Dacy Building Services Ltd v IDM Properties LLP, Court of Appeal - Technology and Construction Court, February 05, 2018, [2018] EWHC 178 (TCC)

Resolution Date:February 05, 2018
Issuing Organization:Technology and Construction Court
Actores:Dacy Building Services Ltd v IDM Properties LLP
 
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Neutral Citation Number: [2018] EWHC 178 (TCC)

Case No: HT-2016-000244

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

TECHNOLOGY AND CONSTRUCTION COURT(QBD)

Royal Courts of Justice

Strand, London, WC2A 2LL

Date 5 February 2018

Before :

THE HON MR JUSTICE FRASER

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Between :

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Mr Maurice Rifat (instructed by WH Matthews & Co) for the Claimant

Mr Samuel Townend (instructed by Stepien Lake) for the Defendant

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Hearing date: 16 January 2018

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Judgment Approved

Mr Justice Fraser:

Introduction

  1. These proceedings started life as an application by the Claimant, Dacy Building Services Ltd. (``Dacy'') to enforce the decision of an adjudicator, Mr Philip Eyre, which was made on 9 August 2016, evidently some time ago. His decision was to the effect that the Defendant should pay to Dacy the sum of £247,250 plus interest. The sum that he ordered was said by Dacy in the adjudication to arise in respect of works done by Dacy between 3 December 2015 and May 2016 at a site in Camberwell, London. The Defendant, IDM Properties LLP (``IDM Properties''), resisted enforcement on the basis that Mr Eyre lacked jurisdiction. IDM Properties' position was then, and remains, very simple, and is that there was no contract between it and Dacy. A contract is a pre-condition to the statutory adjudication regime applying at all, and if there is no contract between two parties there can be no dispute capable of being referred to adjudication, and no adjudicator purportedly appointed could have jurisdiction to deal with such a dispute. If IDM Properties' position were to be the correct analysis, this adjudicator, Mr Eyre, would have lacked jurisdiction to make his decision, and the court would not enforce it.

  2. The application by Dacy for summary judgment on the enforcement of the decision was heard by Jefford J on 22 October 2016. Her judgment on the application is at [2016] EWHC 3007 (TCC). She held at [67] that ``this is a case where the Defendant has a realistic prospect of succeeding in its defence that there was simply no contract between it and Dacy.'' She therefore ordered that there should be a trial of this specific issue, and also ordered - entirely consistently with the ethos that adjudication is intended by Parliament to be a swift process of dispute resolution - that the trial should be expedited and set down with a time estimate of one day.

  3. This approach accords with that generally in respect of adjudication enforcement, which is to resolve disputes between parties to disputes under construction contracts speedily. It must however be emphasised that it will only be in very rare cases that adjudication enforcement applications will result in trials of issues relevant to that enforcement issue. In Estor Ltd. v Multifit (UK) Ltd [2009] EWHC 2108 Akenhead J dealt with a similar situation. In that case, Estor resisted enforcement on the basis that it was not the contracting party. Akenhead J pointed out that, in the Technology and Construction Court, if the jurisdictional point was simply a matter of law (for example of contractual or statutory construction) the court would deal with it summarily. The position was potentially different if the jurisdictional challenge was dependent on fact and evidence, where the issue that the court would have to decide would be whether the defendant had no, or a realistic, prospect of establishing that there was no contract. The issue in such cases is often whether or not there was a concluded contract at all. The courts will be reluctant to find that there was no concluded contract if the subject matter of the putative contract has been performed. For example, in Purton (t/a Richwood Interiors) v Kilker Projects Limited [2015] EWHC 2624, Stuart-Smith J had little difficulty in concluding that there was a concluded contract between the parties and not a series of works carried out by Mr Purton, for which Kilker had paid, without being under any contractual obligation to do so. It will usually be possible for such issues to be resolved summarily. A trial, with contested evidence given orally, will only in my judgment very rarely be justified. This is such a case; but it should not be seen as encouragement to parties upon enforcement generally to argue that a trial is required in order to determine issues directly relevant to that enforcement. In Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] EWHC 254 (TCC) Dyson J (as he then was) made it clear that the court would enforce an adjudicator's decision ordinarily through summary judgment under CPR Part 24. That approach has been reinforced innumerable times in the cases since then, and that remains the usual route to enforcement.

  4. This case is a little different for reasons that will become clear. Dacy's case is that a contract was agreed orally at a meeting on 3 December 2015 attended by three people, namely Mr Dacian Keran of Dacy, Mr Brian Cutmore, and Mr Niall Mcloughlin, the latter gentleman being employed by IDM Properties. An oral contract is sufficient for disputes to be governed by the statutory adjudication provisions, due to s.139 Local Democracy, Economic Development and Construction Act 2009, which repealed the requirement in s.107 of the Housing Grants, Construction and Regeneration Act 1996 that construction contracts had to be in writing or evidenced in writing.

  5. Oral contracts that are construction contracts are now therefore sufficient for disputes under them to be governed by the statutory regime of adjudication. IDM Properties' case is that no such oral agreement was reached at all with Dacy, and that Dacy was working on site for an entirely different entity with whom Dacy had contracted, a company which is now insolvent. This is the central and only point in this trial, to which I will return in some detail. The written evidence before Jefford J reflected these starkly opposing positions, and it was for this reason that she ordered the issue be resolved after a trial, and that the trial be expedited.

  6. It may however strike an objective observer as somewhat difficult to understand why, given this was an adjudication enforcement, and given that the order of Jefford J was made in November 2016, this trial did not take place until mid-January 2018. That lapse of time might give the impression that the Technology and Construction Court could not accommodate a trial of this issue (and, one would assume, the parties' joint wishes to have this matter resolved speedily) in a period of less than 14 months. Rather the converse is the case, however. The Court did list the matter for a trial date in early 2017, consistent both with the order of Jefford J and with the requirement to deal with such adjudication business as quickly as practicable. Had that trial taken place as originally listed, the matter would have been resolved over a year ago. However, it did not do so and the circumstances in which it was not listed, and eventually came to be listed so long after the order by Jefford J, are controversial. Regardless of what happened in this case, if the court orders an expedited trial it is incumbent upon both parties and their legal advisers to do their best to list the matter. The vexed matter of counsel's availability lurks in the background, as often happens, and all I can do in that respect is repeat my views in Bates v Post Office Ltd [2017] EWHC 2844 (QB).

  7. Thus it is that in January 2018 the trial, which was indeed accomplished in one day, finally took place. I heard evidence relating to the one issue solely, namely whether Dacy and IDM Properties had concluded an oral contract pursuant to which Dacy performed the construction works at the Project. The facts of this case are a little unusual.

  8. It is agreed by the parties that if the answer to that single issue is that there was a contract between Dacy and IDM Properties, then the adjudicator did have jurisdiction and his decision should be enforced. If the answer is that there was no such contract, then the decision of Mr Eyre must and would have been reached without jurisdiction on the part of the adjudicator and that is the end of the matter. Although Mr Eyre considered this issue as part of a challenge to his jurisdiction by IDM Properties, and concluded that there was a contract between Dacy and IDM Properties, I refer to that matter for completeness only. The adjudicator's findings on this issue do not have any bearing upon the issue before me. No presumptions or anything of that nature arise as a result of Mr Eyre's findings, which I have put firmly to one side and to which I have had no regard at all.

  9. I heard oral evidence from Mr Keran, Mr Cutmore, Mr Mcloughlin (all of whom were at the meeting to which I have referred); and Mr Appleton (for Dacy, who was not at that meeting) and Mr Taylor (for IDM Properties, who was not present either). Mr Keran, Mr Cutmore and Mr Appleton were called for Dacy, and Mr McLoughlin and Mr Taylor were called for IDM Properties. All five gentlemen were cross-examined, and I deal with their evidence below.

  10. I now turn to a more detailed analysis of the situation that has arisen to this unusual state of affairs. There were many documents before the court dealing with 2015 and going into mid-2016. Much of the cross-examination covered matters throughout this period. I have considered all the documents and all of the evidence, but I only deal specifically in this judgment with that evidence which is required in order to enable me to resolve the only issue in the case.

    The Project

  11. The project that these proceedings concern is one to construct a mixed development of residential flats and retail space at 315-317 Camberwell New Road, London SE5 (``the Project''). The main...

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