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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Niken Construction Ltd v Trigram Carver Street Ltd [2016] EWHC 2232 (TCC) (01 September 2016)
URL: http://www.bailii.org/ew/cases/EWHC/TCC/2016/2232.html
Cite as: [2016] EWHC 2232 (TCC)
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QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
TECHNOLOGY AND CONSTRUCTION COURT
33 Bull Street, Birmingham B4 6DS |
||
B e f o r e :
(Sitting as a Judge of the High Court)
____________________
| NIKEN CONSTRUCTION LTD. |
Claimant |
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| - v - |
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| TRIGRAM CARVER STREET LTD. |
Defendant |
____________________
1st Floor, Quality House, Quality Court, Chancery Lane, London WC2A 1HP.
Telephone No: 020 7067 2900. Fax No: 020 7831 6864
____________________
PAUL HEVINGHAM of counsel appeared for the Defendant, instructed by Emms Gilmore Liberson of Lancaster House, 67 Newhall Street, Birmingham B3 1NQ
____________________
Crown Copyright ©
- The application
- Trigram has also commenced separate proceedings in action C50BM023 in which it seeks final determination of the issues which form the subject matter of this adjudication, as well as various other issues which have arisen between the parties. In those separate proceedings Trigram has made an application to consolidate those proceedings with the present proceedings, which Niken has commenced in order to enforce the adjudicator's decision. Trigram also relies on the fact that it has made such an application to consolidate the two sets of proceedings as a further ground of opposition to Niken's application for summary judgement.
- Niken is represented at this hearing by Mr. Ensaff of counsel. Trigram is represented by Mr. Hevingham of counsel.
- The building contract
- By letter dated 19 December 2014 Ginny Owen of PMO Quantity Surveyors, who were at all material times Trigram's project managers, wrote to Niken as follows (page 1/6/128):
- There were then set out at appendices 1 to 12 a series of documents. Within those enclosed documents was a copy of the JCT design and build form of main contract which is at page 1/6/153. The contract particulars provided for a base date of October 2014 and a date for completion of the works of 9 October 2015.
- The notices of default and termination
- On 7 October 2015 Niken served a default notice. That is at page 3/792. In that letter Nick Plant of Niken wrote as follows:
- On 13 October 2015 Trigram served a termination notice, which is at page 3/640. In that letter Ginny Owen wrote as follows:
- On 26 October 2015 Niken served a termination notice, which is at page 3/794. In that letter Nick Plant wrote as follows:
- The three adjudications
- The second adjudication was commenced by Trigram on 15 December 2015. It concerned Trigram's assertion that Trigram had lawfully terminated Niken's employment under the contract. The relevant adjudication notice is at page 2/346 and it thus arose out of the termination notice which Trigram had served on 13 October 2015. In the event Trigram was unsuccessful in that adjudication.
- The third adjudication notice was commenced by Niken on 25 April 2016. The adjudication notice in respect of this adjudication is at page 1/3/16. It concerned Niken's assertion that Niken was due a sum as a result of its termination account, which derived from Niken's termination of its employment under the contract.
- It is to be noted that the adjudicator in this third adjudication was the same as the adjudicator in the second adjudication. However, the adjudicator in the first adjudication was a different person.
- In the event Niken was successful in the third adjudication with the consequence that Trigram was ordered to pay Niken some £180,000 odd, together with interest, by way of a decision dated 27 June 2016. It is this third decision which Niken now seeks to enforce by way of summary judgment.
- From those adjudication notices it can be seen that the respective position of the parties is that each contended that it had validly terminated the building contract. In the second adjudication the adjudicator decided that Trigram did not terminate the contract by its project manager's letter of 13 October 2015 (page 2/6/249). In the third adjudication the same adjudicator decided that Niken did terminate the building contract and that as a result Niken was due £180,000 in round terms on its termination account (page 1/3/119).
- Trigram's grounds of opposition.
- The first ground of opposition: jurisdiction
- Mr. Ensaff submits that while it is indeed correct that a party - here Trigram - has the right to have matters in issue finally determined, whether by litigation, arbitration or any other appropriate form of dispute resolution, that is not of itself a good reason why a valid decision of an adjudicator should not be enforced. I accept that submission.
- Earlier in his witness statement Mr. Liberson had stated at paragraph 7 (9) as follows:
- That statement in the second sentence of paragraph 7(9) of Mr. Liberson's witness statement led Mr. Ensaff to submit in paragraph 50 of his written submissions as follows:
- That, in turn, led Mr. Hevingham to inform me in the latter part of his oral submissions, on instructions, that paragraph 7(9) of Mr. Liberson's witness statement contained a typographical error, such that the words "but only if and" should not have been included and should now be excised.
- In paragraph 30 of his written submissions Mr. Ensaff submitted that none of the points raised in opposition by Trigram went to jurisdiction.
- In paragraph 28 of his written submissions Mr; Hevingham submitted as follows:
- Although he makes a submission that "… there were jurisdictional errors made by the adjudicator in adjudication number three", Mr. Hevingham's submissions did not identify what, if any, jurisdictional error was made, nor does it appear that Trigram has filed any evidence to identify what, if any, jurisdictional error was made in the third adjudication. I therefore conclude that the jurisdiction of the adjudicator is not in issue in this application.
- The second ground of opposition: matters relating to natural justice.
- In his written submissions Mr. Ensaff submitted as follows:
- Mr. Ensaff then went on in his written submissions to refer to the provisions of section 108(3) of the Act and paragraph 23(2) of Part 1 of the scheme.
- He then referred to the well-known decisions of Macob Civil Engineering Ltd. v. Morrison Construction [1999] BLR 93, Bouygues (UK) Ltd. v. Dahl-Jensen (UK) Ltd. [2000] BLR 49 and Carillion Construction Ltd. v. Devonport Royal Dockyard Ltd. [2005] BLR 310. I was also referred in the course of oral submissions to the subsequent decisions of the Court of Appeal in both Bouygues and Carillion. It is to be noted that these decisions are of considerable authority and set out principles relating to the enforcement of adjudicator's decisions which are now very well established.
- In Macob, Dyson J (as he then was) held at page 97 as follows:
- He continued on page 98 as follows:
- In Bouygues, which, it is to be noted, was a decision delivered later in 1999, again by Dyson J (as he then was). He held at paragraph 35 as follows:
- It is to be noted that that decision was then approved by the Court of Appeal. In paragraph 27 of his judgment Chadwick LJ held as follows:
- Then in Carillion, having referred to a number of relevant authorities, Jackson J (as he then was) held at paragraph 80 as follows:
- That decision also went on appeal to the Court of Appeal. In paragraph 52 of his judgment Chadwick LJ (who was also part of the constitution of the Court of Appeal in Bouygues) referred to paragraph 80 of the first instance judgment of Jackson J, recited the general principles which Jackson J had derived from the various authorities to which he had referred, and then held as follows:
- In paragraph 31 of his written submissions Mr. Ensaff submitted that none of the points raised by Trigram in opposition to the application went to points of natural justice.
- However, in his written submissions Mr. Hevingham submitted as follows:
- In his oral submissions Mr. Hevingham developed the point made in paragraph 52 of his written submissions as follows: he submitted that the essence of Trigram's case was that in considering whether Niken proceeded regularly and diligently, the adjudicator confined himself to looking at the period between the default notice, served on 25 September 2015, and the termination notice which had been served on 13 October 2015.
- In his written submissions Mr. Hevingham referred to the adjudicator's second decision and submitted as follows:
- In his oral submissions Mr. Hevingham summarised the effect of those submissions as one to the effect that the adjudicator had failed to recognise the relevant provisions in the contract. In summary, Trigram's case is as set out in paragraph 53 of Mr. Hevingham's written submissions where he submitted that " … the adjudicator's failure in adjudication No 2 to consider evidence and argument led him to a decision which ... was so wrong as to constitute a breach of natural justice, leading him, as it did, to the conclusion he reached in adjudication No 3". Mr. Hevingham made a submission to almost exactly the same effect in the course of his oral submissions, where he submitted that in failing to recognise the basic elements of the case advanced by Trigram the adjudicator committed an unfairness that amounted to a breach of natural justice.
- A key point relied upon by Trigram is that the adjudicator only looked at the period between Trigram's notice of default and Trigram's notice of termination, and not to any earlier period in which Niken was in delay.
- In his oral submissions Mr. Ensaff made two points in response to those submissions. His first point was that if one has regard to the relevant contractual provisions, it is understandable how and why the adjudicator would look at and or focus his attention on the period between Trigram's notice of default and Trigram's notice of termination. Clause 8.4.1.2, under the heading "Termination by Employer. Default by contractor" provides as follows:
- Mr. Ensaff drew attention to the words: "If the contractor continues a specified default for 14 days from receipt of the notice under clause 8.4.1 …" with particular emphasis on the word "continues", and submitted that Trigram would have had to prove a continuation of Niken's default in the second adjudication, with the consequence that the adjudicator obviously had to look at and or have regard to that period of time in the second adjudication. In my judgement, the terms of those clauses resonates with the language used by Trigram's project manager in her letter constituting notice of termination, to which I have already referred.
- Mr. Ensaff's second point was that, notwithstanding the first point, in any event, the text of the adjudicator's decision in the second adjudication indicates that he did in fact have regard to earlier periods, and Mr Ensaff referred in particular to paragraphs 232, 234 and 247 of that decision in which the adjudicator made specific reference to earlier events relating to the topic of delay. I accept Mr. Ensaff's submissions in that regard.
- Standing back I have come to the conclusion that all of the submissions of Trigram in the context of its second ground of opposition amount to a submission that the adjudicator was wrong, whether in his third decision or, as the majority of Mr. Hevingham's submissions focus on, his second decision. However, as the authorities cited above clearly establish, the fact that, as Trigram submits, the adjudicator was wrong is not a reason for his third decision not to be enforced. In my judgment, properly construed, the submissions made by Trigram do not go to matters of natural justice. The consequence is that the third decision is a valid decision.
- The third ground of opposition: real prospect of successfully defending the claim at trial.
- In his oral submissions Mr. Ensaff submitted that the point sought to be advanced was meaningless, because Niken's claim was not one in which it sought to litigate the underlying issues between the parties, but instead was an application to enforce a valid decision of an adjudicator. I accept that submission.
- In my judgment Trigram's proposition under this ground inevitably conflates or confuses an analysis of the underlying subject matter of the dispute between the parties - which in a substantial construction case may be, and often is, both complex and substantial - with consideration of the validity of an adjudicator's decision, and application of the now well-established principles relating to the enforcement of adjudicator's decisions, and of course the relevant statutory provisions which inform such practice and/or principles.
- The fourth ground of opposition: complexity etc
- Mr. Ensaff's oral submission in response to that point was that it was irrelevant to the issues that fell to be considered in Niken's application to enforce the adjudicator's decision. In general terms I accept that submission.
- In the course of his oral submissions I asked Mr. Hevingham whether it was Trigam's case that in any case where the losing party in an adjudication raises complex issues of fact and law in support of its application for declaratory relief, that that would amount to a good reason not to enforce an adjudicator's decision, and Mr. Hevingham submitted that it was Trigram's case, but confirmed that he knew of no authority to support such a proposition.
- In my judgment there is no proper basis or foundation for such a proposition and I reject any submission that there is such.
- One of the submissions made by Mr. Hevingham, which resonates with the second and fourth points identified by Mr. Liberson in paragraph 16 of his witness statement, is that because the subject matter of the underlying dispute between the parties is complex and substantial, it was not appropriate to be dealt with through the medium of Part 8 proceedings, which is why the separate proceedings brought by Trigram have been commenced as a Part 7 claim. Mr Hevingham went on to submit that, as a consequence, this is not the sort of case where the court can finally determine all the matters which are in issue between the parties as at the time of hearing of Niken's application for summary judgment, and that is therefore a good or sufficient reason not to enforce the adjudicator's decision by way of summary judgment.
- In my judgment that submission is misconceived. While it may be the case that in the particular circumstances of a particular case a party may be able to raise a discrete point by way of Part 8 proceedings which is capable of being determined at or before the hearing of an application for summary judgment to enforce an adjudicator's decision, the mere fact that the underlying issues between the parties are complex and/or substantial is not of itself good or sufficient reason not to enforce a valid decision of an adjudicator by way of summary judgment.
- Conclusion on Niken's application.
- Trigram's application to consolidate.
- As a preliminary point it is appropriate to inquire what would be the purpose or object of an order for consolidation? Niken's action concerns only its application to enforce the adjudicator's decision. If summary judgment is entered that will be the end of those proceedings. If summary judgment is not entered, it is unlikely that any further substantial step will be taken in that action. Certainly Mr. Ensaff was not able to envisage any such action being taken in such circumstances. So, either way, there will be little or nothing left in the action commenced by Niken to consolidate - to any relevant or meaningful effect - with the action commenced by Trigram.
- In the course of oral submissions I suggested to Mr. Hevingham that the issue raised by Trigram was, in essence, as follows: to what extent does a procedural power to consolidate proceedings override a successful party's substantial right to enforce a valid adjudicator's decision? Mr. Hevingham agreed that that was indeed the issue raised by Trigram's cross-application. I then inquired of Mr. Hevingham if there was any authority which supported such a proposition, and he informed me that he was not aware of any such authority.
- In my judgment there is no merit in Trigram's submission, either that an order for consolidation should be made in all the circumstances of these two cases, or that if an order for consolidation was made, that summary judgment should not also be entered on Niken's application to enforce the adjudicator's decision.
- Trigram's position appears to be no different from instances where the resisting party seeks to set off a cross-claim against an adjudicator's decision in an attempt to avoid enforcement. As such, it seems to me to be, in effect, little more than a device sought to be set up in order to avoid the consequences of the adjudicator having made a valid decision. In those circumstances I reject the application to consolidate and the submissions made in support of it.
- Overall conclusion
- Those are the substantive decisions on the applications, and I will now hear counsel on the issue of costs.
JUDGE DAVID GRANT:
This is an application by Niken Construction Ltd. ("Niken") for summary judgment so as to enforce the decision of an adjudicator. It is opposed by Trigram Carver Street Ltd. ("Trigram").
The particulars of claim in these proceedings state the details of the building contract as follows:
"(1) The Claimant is a construction contractor which undertakes a variety of construction works, including residential properties.
"(2) The Defendant is a special purpose vehicle company formed to redevelop a site situated at 30 - 34 Carver Street, Birmingham B1 3AL. The title of the site is held by the Defendant under Land Registry official copy of registered title No. WM499950 and has been held since 27 November 2014.
"(3) By a contract made between the parties the Claimant agreed with the Defendant to design and construct twenty-four residential apartments (one and two bedrooms), associated car parking, communal areas and a single commercial unit for the total price of £2,266,896.50 pence + VAT. The project was zero VAT rated."
"(4) The contract was a JCT design and build contract 2011 ..."
"Please carry out main contract works which are briefly described as design and build twenty-four number one and two bedroom apartments, associated communal areas, car parking, landscaping and commercial unit and which are more particularly described in the main contract documents and shall be upon the terms contained in the main contract. The main contract comprises the rights and obligations set out in the main contract documents which are this main contract order, the joint contracts tribunal design and build main contract 2011, the main contract particulars and the schedule of numbered documents as listed in the main contract particulars which comprise the following documents."
The parties served the following notices of default and termination. On 25 September 2015 Trigram, by its project manager, served a notice of default under the contract. In that notice, which was given by form of letter, Ginny Owen wrote as follows (page 2/6/409):
"As you are aware we are the employer's agent under the building contract ... As agent for and on behalf of Trigram this letter is formal notice of default to you under clause 8.4 of the conditions of contract. The specified default is set out under clause 8.4.1.1 of the conditions of the contract, namely that you have failed and are failing to proceed regularly and diligently with the performance of your obligations under the contract.
"You are in significant and substantial delay in a number of areas of the works arising out of your failure to proceed regularly and diligently with the works. We attach a progress statement showing the significant areas in delay that are either already complete outside the target programme durations or are in progress and continue to contribute to the delay. In summary, the principal areas of delay are the installation of the foundations, upper floor metal decking, the installation of the concrete to those upper floors, completion of the superstructure brickwork, installation of the roof trusses, completion of the roof coverings and parapet walls with concealed gutter."
To that letter was attached a progress statement which is on the following page.
"In the matter of a construction contract between Trigram ... and Niken ... this is a notice of specified default given under clause 8.9.1.1 of the contract. Payment notice number seven, dated 3 June 2015, in respect of interim application number seven (due date 29 May 2015) set out the amount of the interim payment to be made by Trigram on or before the final date for payment. The sum stated on payment notice number seven, i.e. the sum due to Niken, was £202,933.66 pence. In the event Niken received a payment of £162,010.66 pence in respect of payment notice number seven. No pay less notice was issued. The employer has failed to pay Niken the amount due to Niken in accordance with clause 4.9 by the final date for payment. With reference to clause 8.9.3, if the specified default continues for fourteen days from receipt of this notice, Niken may on or within twenty-one days from the expiry of that fourteen day period, via further notice to Trigram, terminate Niken's employment under the contract."
"We write further to our letter dated 25 September 2015 ... You have continued the specified default for fourteen days following receipt of our notice. You remain in significant and substantial delay in a number of areas of the works on site arising out of your failure to proceed regularly and diligently with the works. In the circumstances, as employer's agent on behalf of the employer, this letter is notice to you pursuant to clause 8.4.2 of the contract conditions of termination of your employment under the contract. The employer will now employ and pay other persons to carry out and complete the works and make good any defects. You must now forthwith vacate the site. Under clause 8.7.2.2 of the contract you must provide to us immediately all contractor's design documents ... Under clause 8.7.2.3 of the contract you must provide, within fourteen days of this date, details of any agreements for the supply of goods and materials for execution of works needed to complete the scheme ..."
"In the matter of a construction contract between Trigram ... and Niken ... and with reference to the notice of specified default, dated 7 October 2015 ... the specified default has continued for fourteen days from receipt of that notice. Accordingly, this is a notice of termination of the contractor's employment, given under clause 8.9.3 of the contract. This notice of termination shall take effect as provided for under clause 8.2.2 of the contract upon which the provisions of clause 8.12 of the contract shall apply."
There have been three adjudications between the parties. Brief details of those three adjudications are set out in paragraphs 8 to 12 of Mr. Ensaff's written submissions. The first adjudication was commenced by Niken. It concerned an unpaid balance from interim valuation no 7 in the sum of £40,923. Niken was successful in that adjudication and Trigram was ordered to pay the sum sought by way of a decision dated 27 November 2015. It is common ground that on some later date Trigram paid that sum to Niken.
These derive from a variety of sources. Firstly, there are the matters set out in the witness statement of Mr. Liberson, who is Trigram's solicitor, in particular as set out in paragraph 16 of the witness statement, which is in bundle 2 under tab 5. Secondly, there are the matters set out in Mr. Hevingham's written submissions; and thirdly there are the matters which were set out and/or developed by Mr. Hevingham in the course of his oral submissions in this hearing.
In paragraph 16 (1) of his witness statement Mr. Liberson states that:
"Trigram is entitled under the Construction Act to have adjudications decided in legal proceedings and to seek declaratory relief as to the matters at issue"
I construe that as a submission by Trigram that, because Trigram now seeks to have the underlying matters in dispute finally determined, that is a good or sufficient reason not to enforce the adjudicator's decision. In effect it is a submission which goes to the jurisdiction of the adjudicator.
"I invite the court to consider the salient facts of this matter in considering whether to exercise its discretion to consolidate the two claims: ... The Claimant's right to bring its claim is not controversial, the Construction Act specifically provides for all adjudications to be binding, not only if and until the issues are finally decided in legal proceedings."
"... Trigram's misunderstanding of the law is apparent from paragraph 7(9) of Mr. Liberson's witness statement where he states: 'The Construction Act specifically provides for all adjudications to be binding, but only if and until the issues are finally decided in legal proceedings.' This is plainly wrong;
"(a) This is the opposite of what section 108(3) of the Act and paragraph 23(2) of Part 1 of the Scheme say."(b) Trigram seems to think that an adjudication is binding only if the issues are finally determined by legal proceedings, i.e. the adjudication decision is held in limbo until a court confirms or refutes it and only then will it become binding. What the legislation actually says is that the decision is binding and a party has to comply with it until the matter is finally determined."(c) This stated misunderstanding of the law may explain Trigram's evidence and the points it seeks to make, but at the end of the day it is still a misunderstanding of the law and is plainly incorrect."
"Trigram's case is that the adjudicator's decision in adjudication No 2 is wrong to the extent that it amounts to a breach of natural justice. Trigram's further case is that there were jurisdictional errors made by the adjudicator in adjudication No 3 and that in both instances the matter cannot be finally decided without determining complex questions of fact which cannot be properly be carried out at a summary judgment hearing. Both of Trigram's arguments are real, supported by evidence and deserve proper consideration in final proceedings."
The second point raised by Mr. Liberson in paragraph 16 of his witness statement was as follows:
"Notwithstanding the adjudicator's decisions, Trigram's position is that they lawfully and properly terminated the employment of Niken and as such the subsequent purported termination by Niken was of no effect."
I construe that as a submission by Trigram that the adjudicator was wrong in both his second decision and his third decision, noting, as I do that it is only the third decision which is the subject of Niken's application for summary judgment.
"32. ... it amounts to the following submission: 'Yes, we know there is an award. We disagree with it. We are seeking to litigate the underlying dispute. Therefore the court cannot enforce the award because we are litigating it.'
"33. The opposition is meritless. In fact it is hopeless. It runs wholly contrary to the 'pay now, argue later' regime of adjudication enforcement. In fact it amounts to 'argue now, hopefully never pay.'"
"The intention of parliament in enacting the Act was plain. It was to introduce a speedy mechanism for settling disputes in construction contracts on a provisional interim basis and requiring the decisions of adjudicators to be enforced pending the final determination of disputes by arbitration, litigation or agreement ... It is clear that parliament intended that the adjudication should be conducted in a manner which those familiar with the grinding detail of the traditional approach to the resolution of construction disputes apparently find difficult to accept, but parliament has not abolished arbitration and litigation of construction disputes, it has merely introduced an intervening provisional stage in the dispute resolution process. Crucially, it has made it clear that decisions of adjudicators are binding and are to be complied with until the dispute is finally resolved."
"For all those reasons I ought to view with considerable care the suggestion that the word 'decision' where it appears in section 108(3) of the Act and paragraph 23(2) of the scheme ... means only a decision whose validity is not under challenge. The present case shows how easy it is to mount a challenge on an alleged breach of natural justice. I formed the strong provisional view that the challenge is hopeless, but the fact is that the challenge has been made and a dispute therefore exists between the parties in relation to it, thus on Mr. Furst's argument the party who is unsuccessful before the adjudicator has to do no more than assert a breach of the rules of natural justice or allege that the adjudicator acted partially and he will be able to say that there has been no decision. At first sight it is difficult to see why a decision, purportedly made by an adjudicator on the dispute that has been referred to him, should not be a binding decision within the meaning of section 108(3) of the Act and paragraph 23(1) of the scheme ... If it had been intended to qualify the word decision in some way, then this could have been done. Why not give the word its plain and ordinary meaning? I confess that I can think of no good reason for not doing so and none was suggested to me in argument. If this decision on the issue referred to him is wrong, whether because he erred on the facts or the law or because in reaching his decision he made a procedural error which invalidates his decision, it is still a decision on the issue."
"Mr. Furst submits that if Dahl-Jensen is permitted to enforce a decision which is plainly erroneous, Bouygues will suffer an injustice and this will bring the adjudication scheme into disrepute, but, as I said in Macob, the purpose of the scheme is to provide a speedy mechanism for settling disputes in construction contracts on a provisional interim basis and requiring the decisions of adjudicators to be enforced pending final determination of disputes by arbitration, litigation or agreement, whether those decisions are wrong in point of law or fact. It is inherent in the scheme that injustices will occur because from time to time adjudicators will make mistakes. Sometimes those mistakes will be glaringly obvious and disastrous in their consequences for the losing party. The victims of mistakes will usually be able to recruit their losses by subsequent arbitration or litigation and possibly even by a subsequent adjudication. Sometimes they will not be able to do so, where, for example, there is intervening insolvency, either of the victim or the fortunate beneficiary of the mistake."
"The first question raised in this appeal is whether the adjudicator's determination in the present case is binding on the parties, subject always to the limitation contained in section 108(3) and in paragraphs 4 and 31 of the model adjudication procedure, to which I have referred. The answer to that question turns on whether the adjudicator confined himself to a determination of the issues that were put before him by the parties. If he did so, then the parties are bound by his determination, notwithstanding that he may have fallen into error. As Knox J put it in Nikko Hotels v. MEPC ... if the adjudicator has answered the right question in the wrong way, his decision will be binding. If he has answered the wrong question his decision will be a nullity. I am satisfied, for the reasons given by Buxton LJ, that in the present case the adjudicator did confine himself to the determination of the issues put to him. This is not a case in which he can be said to have answered the wrong question, he answered the right question. ..."
"In my view it is helpful to state or restate four basic principles:
(1) The adjudication procedure does not involve the final determination of anybody's rights (unless all the parties so wish).
(2) The Court of Appeal has repeatedly emphasised that adjudicator's decisions must be enforced, even if they result from errors of procedure, fact or law: see Bouygues, C&B Scene v. Levolux.
(3) Where an adjudicator has acted in excess of his jurisdiction or in serious breach of the rules of natural justice, the court will not enforce his decision: see Discain, Balfour Beatty and Pegram Shopfitters.
(4) Judges must be astute to examine technical defences with a degree of scepticism consonant with the policy of the 1996 Act. Errors of law, fact or procedure by an adjudicator must be examined critically before the court accepts that such errors constitute excess of jurisdiction or serious breaches of the rules of natural justice: see Pegram Shopfitters and Amec."
"We do not understand there to be any challenge to those general principles. They are fully supported by the authorities, as the judge demonstrated in his judgment."
I shall therefore have regard to those four principles in considering this application and the various points raised by Trigram in opposition to the application.
"52. In essence the adjudicator misdirected himself as to whether Niken had proceeded 'regularly and diligently'. He omitted to consider the obligations placed upon Niken by the JCT contract conditions with particular reference to the obligation to carry out and complete the works and to complete the obligation to complete the M&E works themselves. He failed to consider the obligation to proceed regularly and diligently from the outset of the contract and instead concentrated on the period 'post-default notice'.
"53. The adjudicator's failure in adjudication No 2 to consider evidence and argument led him to a decision which ... was so wrong as to constitute a breach of natural justice, leading him, as it did, to the conclusion he reached in adjudication No 3."
"44. In paragraph 223 … the adjudicator considered why there was no M&E contractor and at paragraph 255 the adjudicator apparently found himself in a tangle with the question of named subcontractors and a supposed 'detriment' to Niken. He found that the Claimant (there referring to Trigram) had some sort of responsibility which directly led to Niken having no M&E subcontractor and which, in turn, 'affected the carrying out and completion of the works by the contractual date for completion'."
"45. In so finding the adjudicator ignored JCT Schedule 2, clause 2.1.6, and the obligations spelt out in article 1, clause 2.1 and clause 2.3. He failed to recognise that Sabic was not a case of JCT terms and that in fact in Sabic the obligation was to proceed with 'due diligence', whereas in the JCT contract the obligation is wider, being that set out in clause 2.3, which requires a contractor ' … thereupon to begin the construction of the works or section and regularly and diligently proceed with and complete the same on or before the relevant completion date'."
"If, before practical completion of the works, the contractor … fails to proceed regularly and diligently with the performance of his obligations under the contract ... the employer may give to the contractor a notice specifying the default or defaults."
Clause 8.4.2 then provides that:
"If the contractor continues a specified default for 14 days from receipt of the notice under clause 8.4.1, the employer may, on or within 21 days from the expiry of that 14 day period by a further notice to the contractor terminate the contractor's employment under this contract."
In paragraph 16 of his witness statement Mr. Liberson stated that:
"In the circumstances, Trigram's claim as articulated in its particulars of claim and supporting documents reveals that it has a real prospect of successfully defending Niken's claim at trial."
This was identified by Mr. Liberson in paragraph 16 of his witness statement as follows:
"Furthermore, it is desirable that these matters proceed together to trial so that the long-running dispute between the parties may be settled once for and all."
I therefore conclude that the decision of the adjudicator in the third adjudication is a valid decision, and that Trigram has not established any matter which goes either to jurisdiction or to natural justice, and/or which amounts to a good or sufficient reason not to enforce that decision by way of summary judgment.
This application leads me to consider the interrelation between the two sets of proceedings. Trigram applies to consolidate the action which it has commenced with the action commenced by Niken. Trigram submits that an order for consolidation should be made rather than an order entering summary judgment so as to enforce the decision of the adjudicator.
I therefore come to my overall conclusion, which is that Niken succeeds in its application for summary judgment to enforce the third decision of the adjudicator, and Trigram fails in its cross-application to consolidate the two sets of proceedings.