Davies & Davies Associates Ltd v Steve Ward Services (UK) Ltd [2021] EWHC 1337 (TCC) (19 May 2021

Neutral Citation Number: [2021] EWHC 1337 (TCC)

Case No: HT-2021-000006

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

TECHNOLOGY AND CONSTRUCTION COURT (QBD)

Royal Courts of Justice

Rolls Building

London, EC4A 1NL

19th May 2021

B e f o r e :

MR ROGER TER HAAR QC

Sitting as a Deputy High Court Judge

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Between:

DAVIES & DAVIES ASSOCIATES LIMITED

Claimant

- and –

STEVE WARD SERVICES (UK) LIMITED

Defendant

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Nigel Davies (a director of the Claimant Company) for the Claimant

James Bowling (instructed by Costigan King) for the Defendant

Hearing date: 23 April 2021

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HTML VERSION OF JUDGMENT APPROVED

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Crown Copyright ©

Covid-19 Protocol: This judgment will handed down by the judge remotely by circulation to the parties' representatives by email and release to BAILII. The date and time for hand-down is deemed to be 10.30am on Wednesday 19th May 2021.

Mr Roger ter Haar QC :

There is before me an application on the part of the Claimant for summary judgment for the fees of Mr. Nigel Davies for acting as the Adjudicator in an Adjudication brought by the Defendant against Bhavishya Investment Ltd ("BIL").

Although Mr Davies was the Adjudicator, his fees, if payable, were payable to the Claimant. Hereafter I refer to Mr Davies as "the Adjudicator" save where I am recording submissions he made before me as representative of the Claimant.

The claim (in the sum of £4,290 plus VAT) is for a very small amount of money by the standard of claims which come before this Court. It raises interesting points as to the circumstances in which an Adjudicator's fees are or are not payable.

The Facts

In late 2019 – early 2020 the Defendant carried out construction operations at a restaurant called "Funky Brownz", 28 Belmont Circle, Kenton Lane, Stanmore, Middlesex (the Premises).

The Premises are owned and operated by BIL as "Funky Brownz".

At all material times one Ms Vaishali Patel was a director and the majority shareholder in BIL.

In late 2019 a set of contract documents was drawn up but not signed.

At the head of the proposed contract is a section which reads as follows:

"CLIENT

VAISHALI PATEL

FUNKY BROWNZ

28 Belmont Circle, Belmont

Circle Kenton Lane

Stanmore, Middlesex, United

Kingdom, HA3 8RF (the "Client")"

Clause 1 of the proposed contract provided:

"The Client hereby agrees to engage the Contractor to provide the Client with the following services (the "Services"):

DESIGN SUPPLY AND BUILD OF FUNKY BROWNZ 28 Belmont Circle, Belmont Circle Kenton Lane, Stanmore, Middlesex, United Kingdom, HA3 8RF, Internal decorations."

At the end of the proposed contract, it provided for a seal to be affixed:

"IN WITNESS WHEREOF the Parties have duly affixed their signatures under hand and seal on this ___ day of _______ ____

"Client

"FUNKY BROWNZ

"Per ____________ (Seal)

Attention: OWNER/PROPITIER MISS VAISHALI PATEL."

(The mistyping of the word "Proprietor" is in the original.)

As I have said, the contract was never signed. Invoices for the works as they progressed were however addressed to and paid by BIL.

As at completion of the works in February 2020, the Defendant claimed an unpaid balance of £35,974.29.

The parties then fell into dispute about whether the works were complete, defects and snags.

It is the Defendant's case that it asked for access to carry out any works required in order to be paid. Access was finally secured on 18 May 2020. The Defendant said it completed the defects notified.

However, payment was still not made: it was claimed that the remedial works were defective and the works were still incomplete. These exchanges about access and defects took place between about April 2020 and at least June 2020 between solicitors for the Defendant and those representing Funky Brownz (I put it this way so as not to pre-judge who was the Defendant's counterparty).

The Defendant says that all of those communications were on the basis that BIL was the contracting party liable for any sums due. At no stage did BIL suggest that Ms Patel was personally liable instead.

On 15 April 2020 the Defendant served a Statutory Demand upon for the unpaid sums. The Statutory Demand was directed at BIL. Claims consultants engaged by BIL threatened an injunction to restrain presentation of a petition on the basis that the debt was bona fide disputed because of the defects, but not on the additional ground that BIL was not the relevant contracting party.

The Defendant therefore withdrew the Statutory Demand.

Under cover of an e-mail dated 14 September 2020, the Defendant's solicitors, Costigan King, submitted a request to The Royal Institution of Chartered Surveyors ("RICS") dated 14 September 2020 for the nomination of a construction adjudicator under the Scheme for Construction Contracts (England and Wales) Regulations 1998 SI No.649 (as amended) ("the Scheme") and the CIC Low Value Disputes Model Adjudication Procedure ("the Model Procedure") in relation to a dispute said to be with BIL. Costigan King then sent the Notice of Adjudication to BIL by e-mail of the same date.

On 15 September 2020 the Adjudicator was nominated by the RICS to act as the Adjudicator under the Scheme and the Model Procedure in relation to a dispute defined as being between the Defendant and BIL.

This was the first of two adjudications. The application before me concerns the second adjudication referred to below.

On the same date, 15 September, the Adjudicator wrote to the parties by post and e-mail providing directions and copies of his terms and conditions by letter. Costigan King acknowledged receipt of the letter and e-mail under cover of their e-mail of the following day, 16 September 2020.

I refer to the Adjudicator's terms and conditions in more detail below. They were the same in respect of both adjudications.

Neither party objected to those terms and conditions.

Under cover of an e-mail dated 21 September 2020 BIL disputed that the Adjudicator had jurisdiction to decide the dispute in the first adjudication on the grounds that the request for nomination of an adjudicator was made to the RICS before the Notice of Adjudication had been issued by the Defendant to BIL.

By email on 21 September 2020 the Adjudicator resigned as adjudicator in the first adjudication.

The Claimant rendered to the Defendant an invoice for 1.7 hours of the Adjudicator's time. The Defendant paid this invoice.

On behalf of the Defendant, Costigan King issued BIL with a second Notice of Adjudication dated 21 September 2020 and a second request to the RICS followed on 22 September 2020 for the nomination of a construction adjudicator under the Scheme and the Model Procedure.

On 23 September 2020 the Adjudicator was nominated again by the RICS to act as Adjudicator under the Scheme and the Model Procedure in relation to the same dispute between the Defendant and BIL.

Again, the Adjudicator wrote to the parties providing directions and copies of his terms and conditions by letter sent by post and e-mail dated 23 September 2020. His terms and conditions were identical to those which he had issued to the parties eight days earlier on 15 September 2020. Again, there was no objection to his terms and conditions.

The Adjudicator received the Response on 8 October 2020 and the Reply on 15 October 2020.

In his Skeleton Argument for the hearing before me, Mr Davies set out what happened next as follows:

"23. The Response was received on 8 October 2020 …. and the Reply was received on 15 October 2020 ….

"24. In accordance with Referral para.4 … the Defendant claimed the Parties to the adjudication had entered into "the Contract" pursuant to an agreement in writing on or around 21 November 2019 ….

"25. The Contract …. the Defendant had written and relied upon in order to bring the adjudication, unequivocally recorded that it was between the Defendant and Miss Vaishali Patel and it contained both a "Modification of Agreement" clause at para.24 and at para.27 an "Entire Agreement" clause ... Despite exhaustive enquiries of the documents and of the Parties as per my e-mail dated 16 October 2020 timed 1759hrs …. I established that the Contract had not ever changed (e.g. by novation) and remained to be between the Defendant and Miss Patel.

"26. Para.12(b) of Part 1 of the Scheme …. provides that I was to avoid incurring unnecessary expense. Following e-mail correspondence with the Parties dated 15 and 16 October 2020 consistent with para.9 of Part 1 of the Scheme … and para.31 of the CIC LVD MAP … I resigned as the Adjudicator by e-mail dated 16 October 2020 timed 1759hrs …. I resigned because Bhavishya was not a Party to and/or identified within the Contract on which basis the second adjudication had been referred and therefore I was without jurisdiction as per paragraph 31 in Dacy Building Services Ltd v IDM Properties LLP [2016] EWHC 3007 (TCC) (25 November 2016) …. and paragraphs 62 to 64 of the judgment in M Hart Construction Ltd & Anor v Ideal Response Group Ltd (Rev 1) [2018] EWHC 314 (TCC) (07 March 2018) ….

"27. Clearly, I could not issue a Decision in relation to the contractual rights of one of the contracting parties in an adjudication where the other contracting party was not a party to the process. Obviously, Bhavishya's participation did not change this.

"28. It had been necessary to establish such facts because at Referral para.39 … the Defendant had requested that I provide written reasons for my Decision and because it was a critical component to my reasoning. It was a natural consequence of establishing whether and on what basis the Defendant was entitled to the payment it claimed from Bhavishya, all in accordance with para.13 of Part 1 of the Scheme …., i.e. take the initiative in ascertaining the facts and the law necessary to determine the dispute. It was part of the process of determining the adjudication as per paragraph 38 in Ex Novo Limited v MPS Housing Ltd [2020] EWHC 3804 (TCC) (17 December 2020) ….

"29. I issued the Claimant's invoice number 696 in the VAT inclusive sum of £5,148 …. in accordance with my accepted terms and conditions …., addressed to the Defendant, by e-mail to Costigan King dated 19 October 2020 timed 1122hrs …..

"30. Under cover of my e-mail dated 21 October 2020 timed 1654hrs, I provided a breakdown of my time charged under invoice number 696 …. and …. Out of the 16.9 hours spent I charged for 13.2 hours."

On 20 October 2020 Costigan King wrote by email to say that the Defendant would not pay the Claimant's invoice because it was claimed that Mr Davies had committed a repudiatory breach of his contract of appointment. The Defendant was said to have accepted the Adjudicator's repudiation so that his terms and conditions had ceased to have effect. It was also claimed that the Claimant was not entitled to payment because of the Court of Appeal decision in PC Harrington Contractors Limited v Systech International Limited [2012] EWCA Civ 1371.

The full version of the judgement can be found at: https://www.bailii.org/ew/cases/EWHC/TCC/2021/1337.html

Contains public sector information licensed under the Open Government Licence v3.0.