Bond v Mackay & Ors, Court of Appeal - Technology and Construction Court, September 25, 2018, [2018] EWHC 2475 (TCC)

Resolution Date:September 25, 2018
Issuing Organization:Technology and Construction Court
Actores:Bond v Mackay & Ors

Neutral Citation Number: [2018] EWHC 2475 (TCC)

Case No: HT2018-000055




Royal Courts of Justice

Rolls Building, London, EC4A 1NL

Date: 25/09/2018




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Mr Martin Kingston QC and Mrs Nicola Preston (instructed by Burges Salmon LLP) for the Claimant

Mr Mark Wonnacott QC (instructed by Field Fisher Waterhouse LLP) for the Defendants

Hearing dates: 25th July, 25th September 2018

Draft available to the parties 2nd August 2018

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Mr Jonathan Acton Davis QC:

  1. By a claim form issued on 22nd February 2018 [1/113] the Claimant applied under Section 67 of the Arbitration Act 1996 for an Order that Answer (a) under paragraph 3(a) of the second Award dated 2nd February 2018 of Mr Roderick Mackay, the Arbitrator appointed by letter dated 27th August 2013 of the President of the Royal Institute of Chartered Surveyors pursuant to the terms of the Deed to Grant (the BG deed) dated 1st June 1994 between the Claimant and the Defendant's predecessor in title British Gas plc be varied so as to provide that the dispute as to whether the Third Defendant is in breach of Clause 2(i) of the BG Deed is within the scope of the matters already referred to the Arbitrator for determination: and that Answer (b) under paragraph 3(b) of the said Award be set aside (so that the Third Defendant will remain a party to the Arbitration and that paragraph 4 of the Second Award be set aside alternatively be varied so as to provide that there be no order as to costs.

  2. By letter dated 5th March 2018 [1/122] Mr Mackay, the Arbitrator, said that he did not wish to make any representations to the Court.

  3. Both Second and Third Defendants filed acknowledgements of service [1/123] and [1/125] making clear that they intended to contest the claim but their solicitor Ms Ingham said in a witness statement dated 29th March 2018 at paragraph 1 [1/138] that her statement was on behalf of the Third Defendant (although her firm acts also for the Second Defendant) but because the claim relates only to the Award obtained by the Third Defendant she made the statement only on behalf of the Third Defendant.

  4. The claim form was supported by a witness statement made by Mr Minhinick dated 22nd February 2018 [1/130]. In his witness statement Mr Minhinick explains that the issue that is the subject matter of this claim is that it is claimed by the Claimant that the Third Defendant is in breach of Clause 2(i) of the BG Deed dated 1st June 1994 between the Claimant and British Gas plc (the Third Defendant's predecessor in title) and that determination of that issue was within the ambit of the matters referred to the Arbitrator.

  5. The BG Deed was entered into so as to permit the Third Defendant to run its gas pipeline under the land of the Claimant at Dorey's Pit. On 23rd September 1994 the Claimant entered into a lease with BP Exploration Operating Company Limited (now Perenco UK Limited) in relation to the placement of oil pipes under the same land of the Claimant. The principal pipelines are around 3.8 metres apart.

  6. On 12th October 2011 the Claimant obtained planning permission to `` extract Ball Clay and Sand and Gravel as an extension of Dorey's Pit...''

  7. A dispute arose as to the compensation payable to the Claimant in respect of the sterilization of the minerals at Dorey's Pit occasioned by the presence of the various pipelines. Both the BG Deed and Lease provide that if there was such a dispute, the matter was to be referred to arbitration. The area of Ball Clay and Sand and Gravel, the subject of the 2011 planning permission referred to above was also the area which was the subject of the Claimant's claim against the Third Defendant of 30th November 2011. The Claimant also made a claim against the Second Defendant under a second contractual instrument, a Deed of Lease with British Petroleum in respect of the same area. It is said that those 2 disputes relating to liability for, and compensation payable in respect of, common mineral sterilization comprise the subject matter of the disputes referred to the Arbitrator.

  8. On 10th November 2016, the Claimant provided the Second and Third Defendants with a method statement outlining the manner in which he intended to extract mineral from the eastern side of the pipelines and up to within 3 metres of the Third Defendant's pipeline. Those Works subsequently commenced, and on 30th November 2016 the Second Defendant's solicitors sought an urgent undertaking from the Claimant to cease those Works on account of the dangers those Works were alleged to pose to the Third Defendant's pipeline. It became clear in subsequent correspondence that the Second Defendant would seek an injunction against further works being carried out in the immediate vicinity of the Third Defendant's pipeline, due to possible consequential impacts on the Second Defendant's pipeline.

  9. At no time since those Works were proposed has the Third Defendant offered any direct comment or correspondence on the mineral extraction works proposed, and carried out, in the vicinity of its gas pipeline.

  10. The Claimant provided notice of his intention to resume the Works on 10th May 2017. Those Works will take place at a lateral distance in excess of 10 metres from the Third Defendant's gas pipeline, which the Second Defendant has indicated is an appropriate safety stand-off stop.

  11. By letter dated 22nd May 2017, the Claimant set out the dispute with the Third Defendant in relation to Clause 2(i) of the BG Deed. The Claimant's case is that the Third Defendant is in breach of that clause. The Third Defendant denies any such breach. It is the Claimant's case that the Clause 2(i) dispute is within the ambit of the current arbitration. That is denied by the Third Defendant.

  12. In his second Award, the Arbitrator found that the Clause 2(i) is not within his reference. That is the decision which is challenged by the Claimant. The Claimant says that the Arbitrator does have the jurisdiction to determine the Clause 2(i) issues. Thus the Claimant seeks a review of the second Award under Section 67 of the Arbitration Act 1996.

  13. Ms. Ingham's witness statement [1/138] argues that the Claimant has refused to plead out the dispute under Clause 2(i) of the BG Deed and that the first time the claim was raised was in Burges Salmon's letter...

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