Prater Ltd v John Sisk & Son (Holdings) Ltd [2021] EWHC 1113 (TCC) (30 April 2021)

Neutral Citation Number: [2021] EWHC 1113 (TCC)

Case No: HT-2021-000060

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice,
Rolls Building
Fetter Lane,
London, EC4A 1NL

30 April 2021

B e f o r e :

VERONIQUE BUEHRLEN Q.C.
SITTING AS A DEPUTY HIGH COURT JUDGE
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Between:
PRATER LIMITED
Claimant

- and –


JOHN SISK & SON (HOLDINGS) LIMITED
Defendant

____________________

James Howells Q.C. and David Johnson (instructed by KT Construction Law) for the Claimant
Sarah Hannaford Q.C. (instructed by Hawkswell Kilvington Limited) for the Defendant

Hearing date: 20 April 2021
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HTML VERSION OF JUDGMENT APPROVED
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Crown Copyright ©

Covid-19 Protocol: This judgment was 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 30 April 2021 at 10:30 am

BEFORE VERONIQUE BUEHRLEN Q.C.:

1. This is the Claimant's (Prater) Claim and Application for Summary Judgment (the Application) for the enforcement of an adjudication decision dated 2 February 2021 (Decision 4) made by Mr Matthew Molloy (Mr Molloy or the Adjudicator). Mr Molloy was appointed pursuant to the contractual adjudication procedure set out in the Subcontract that has given rise to these proceedings.

2. By Decision 4, the Adjudicator decided that the Defendant (Sisk) was liable to make payment to Prater of the sum of £1,757,821.35 plus VAT and to pay the Adjudicator's fees in full. Sisk has paid the Adjudicator's fees but that is all. Prater claims summary judgment in respect of the sums awarded to it together with interest pursuant to section 35A of the Senior Courts Act 1981 from 2 February 2021 to the date of payment.

The Parties

3. Prater are specialist building envelope contractors. Sisk are part of the John Sisk group of companies that provides domestic and international construction services across a wide range of projects.

The Subcontract and the Adjudications to date

4. The Subcontract was for the design, supply, delivery and installation of envelope façade (cladding and roofing) works to a new Boeing Fleet aircraft maintenance hangar, office and plant room at London Gatwick Airport. The Subcontract forms part of a larger package of works pursuant to which Sisk is engaged by Boeing Commercial Aviation Services Limited for the construction of the hangar. The Subcontract was entered on 25 April 2018, the start date was 9 January 2018, and the contractual Completion Date was 22 March 2019. The Completion Date has been extended by the Adjudicator to 30 August 2019.

5. The Adjudication the subject of this Application was commenced under the contractual provisions for adjudication (Option W2 of the NEC3 Conditions of Subcontract, option A (2013) as amended by the Parties). It is the 4th Adjudication arising out of the Subcontract. I will come to the others briefly in a moment.

6. The Subcontract Works were subject to delays and changes. The Works were certified as completed on 7 November 2019. The Parties are in dispute as to the correct extension of time to the Completion Date, Prater's costs of prolongation and various other claims under the Subcontract. Prater maintains, among other things, claims for Compensation Events under the Subcontract that Sisk has largely refused to recognise. Ms Lisa Bull explains in her third witness statement that on 20 December 2019 Sisk issued an 'assessment' of Prater's account together with 8 lever arch files of documents. The parties are in dispute over several aspects of that assessment and of the subsequent Payment Certificate issued by Sisk on 22 January 2020 in response to Prater's December 2019 Payment Application and as to the final account.

7. There have now been 4 Adjudications, 3 before Mr Molloy (all commenced by Prater) and one commenced by Sisk before Mr Collier. This Application is Prater's application for enforcement of Decision 4. Decision 2 and Decision 4 are of primary relevance to the Application. However, in summary and for completeness, the four decisions arose as follows:

(1) In the First Adjudication (Adjudication 1), Prater sought an amendment to the Subcontract Completion Date. No payment was sought. Mr Molloy issued his decision on 15 June 2020 (Decision 1). He decided that Prater was entitled to an adjustment to the Subcontract Completion Date from 15 March 2019 (the original completion date) to 15 July 2019.

(2) In the Second Adjudication (Adjudication 2), Prater sought decisions on a number of matters including (a) the correct Subcontract Completion Date following upon the findings in Decision 1, (b) the status of provisional sums within the Subcontract and (c) Sisk's entitlement to deduct certain indirect losses from any sums due to Prater. As in Adjudication 1, no payment was sought by Prater. Mr Molloy's decision is dated 5 October 2020 (Decision 2).

(3) In the Third Adjudication (Adjudication 3), Sisk sought a declaration that certain Compensation Events claimed by Prater were not Compensation Events under the Subcontract. Mr Collier was the Adjudicator, and he issued his decision on 28 October 2020 (Decision 3).

(4) In the Fourth Adjudication (Adjudication 4), Prater sought payment of the sum of £2,253,731.65 plus VAT following Decisions 1 – 3. Again, the Adjudicator was Mr Molloy. His decision was issued on 2 February 2021 following a slip rule correction (Decision 4). As already noted, he awarded Prater the sum of £1,757,821.35 plus VAT. Decision 4 is (in part) based on the findings made in Decision 2.

8. Were that not enough, I understand that a fifth Adjudication (also commenced by Prater before Mr Molloy) is ongoing as to outstanding issues in relation to Prater's final account and the appropriate final payment. Prater has also issued a Claim Form in this Court in respect of its final account to comply with the time limits set out in the Subcontract for challenges to a Final Certificate.

9. For the purposes of this Application, the Parties are in dispute as to several issues including the proper interpretation of the contractual and legal effect of Decision 2 which Sisk say is unenforceable impacting the enforceability of Decision 4, the subject of this summary judgment application.

The Parties' respective cases

10. In short it is Sisk's case that Mr Molloy had no jurisdiction to reach the decision he did in Adjudication 2 because Prater's referral included multiple disputes rather than a single dispute. As a result, Decision 2 is unenforceable, not binding and a nullity. Accordingly, Mr Molloy did not, in turn, have jurisdiction to reach the decision he did in Adjudication 4 which was based (in part) on his findings in Adjudication 2. Thus, it is argued that Decision 4 should not be enforced.

11. Sisk identify 3 disputes as having been referred for determination in Adjudication 2. The first being a dispute as to the correct Subcontract completion date i.e., as to Prater's entitlement to an extension of time. The second dispute being a dispute as to whether the Subcontract included provisional sums, itself an issue of contract interpretation. The third dispute being as to Sisk's entitlement to deduct certain indirect losses from sums due to Prater. Sisk's case is that there was no clear link between these three issues, that they could each have been decided independently and that applying the test set out by Akenhead J at paragraph 38 of his judgment in Witney Town Council v Beam Construction (Cheltenham) Ltd [2011] EWHC 2332 (TCC) as to what will constitute a single dispute, the issues raised by Prater in Adjudication 2 constituted three separate disputes.

12. Prater submits:

(i) Firstly, that it is not open to Sisk to challenge Decision 2 in the context of Adjudication 4. Decision 2 is binding and enforceable against Sisk as a matter of principle as well as contractual obligation unless and until revised by the Court pursuant to clause W2.3(11) of the Subcontract.

(ii) Secondly, Sisk's argument does not give rise to a right to impugn Decision 4 on grounds of lack of jurisdiction of the Adjudicator, fraud or breach of the rules of natural justice which are the only bases on which enforcement of Decision 4 can be challenged. Even if correct, the complaint is that Mr Molloy based Decision 4 on a mistake of law by treating Decision 2 as binding or as recording matters that could not be revisited.

(iii) Thirdly, any challenge to the jurisdiction of the Adjudicator in Adjudication 4 would need to be based on the dispute referred to him in that Adjudication and the Adjudicator's jurisdiction to make a decision in Adjudication 4 and not his jurisdiction in respect of Adjudication 2. A challenge based on an assertion that an earlier decision upon which an adjudicator is asked to proceed is not a challenge to the Adjudicator's jurisdiction in the current Adjudication.

(v) Fourthly, if (contrary to Prater's primary case) a lack of jurisdiction in relation to Decision 2 is relevant to the enforcement of Decision 4, Sisk's case that the Adjudicator lacked jurisdiction in relation to Adjudication 2 because the referral included multiple disputes is misplaced. The genesis of the dispute was Sisk's "assessment" of Prater's account issued on 20 December 2019 and its 22 January 2020 Payment Certificate and the referral simply included a number of issues arising out of that disputed certificate.

The Issues on the Application

13. Accordingly, the following issues arise:

(i) Firstly, is a lack of jurisdiction in relation to Decision 2 capable of impugning the Adjudicator's jurisdiction in Adjudication 4 by virtue of the fact that Decision 4 is, in part, based on findings made in Decision 2?

(ii) Secondly, if it is, did the Adjudicator lack jurisdiction in relation to Adjudication 2?

14. In turn, the second issue involves determining whether the matters referred by Prater in Adjudication 2 concerned more than one dispute and, if so, whether the Adjudicator had jurisdiction to deal with more than one dispute in the context of a single adjudication pursuant to the NEC3 Option W2 contractual adjudication scheme.

The full version of the judgement can be found at: https://www.bailii.org/ew/cases/EWHC/TCC/2021/1113.html

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