2000–HT–No. 184
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Tuesday, 6 th June 2000
Before:
HIS HONOUR JUDGE TOULMIN CMG QC
BETWEEN
JOHN MOWLEM & COMPANY PLC
Claimant
-and-
HYDRA–TIGHT LTD
(t/a Hevilifts)
Defendant
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Transcribed by BEVERLEY F NUNNERY & CO
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MR S BRANNIGAN (Instructed by Messrs Fenwick Elliott) appeared on behalf of the Claimant.
MR A NISSEN (Instructed by Messrs Addleshaw Booth & Co, Manchester) appeared on behalf of the Defendant
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J U D G M E N T
(As approved by the Judge)
JUDGE TOULMIN: I start this judgement by expressing my gratitude to the parties for their various submissions, including the additional written submissions by counsel, which I received and read yesterday.
This is an application issued on the 19th May 2000 by the claimant, John Mowlem & Co LTD (“Mowlem”) for a declaration that the adjudicator in a dispute between Mowlem and the defendant, Hydra–Tight Ltd trading as Hevilift (“Hydra-Tight”), does not have jurisdiction to decide the dispute forming the subject-matter of “Hydra–Tight’s purported reference to adjudication of the 25th April 2000, or any dispute arising out of the sub-contract agreed by the parties and forming the subject–matter of the purported reference.
Mowlem ask for an injunction forbidding the adjudicator, Mr Elven, and/or the defendant, from taking any further step in the purported adjudication, and also claim damages against Hydra–Tight for the costs and expenses they have incurred in contesting the purported reference, and in participating (under protest) in the adjudication by Mr Elven.
It is agreed between the parties that on or about the 10th June 1999 the parties agreed to enter into a sub-contract whereby Hydra–Tight agreed to carry out steel erection work at Covered Ways 12 and 58 on the District and Circle Lines in the London Underground railway system. The contract offer letter dated the 7th May 1999 had annexed to it conditions to be included in the sub-contract.
A dispute arose between the parties relating to the performance of the contract. It appears that Hydra–Tight had made application for stage payment on the 29th August 1999 and the 7th November 1999 which had not been met. Hydra–Tight are claiming £162,699.65, including VAT and Interest (see letter to Mowlem dated 25th April 2000).
On the 11th April 2000 Hydra–Tight sent an adjudication notice to Mowlem concerning the dispute and applied to the Royal Institution of Chartered Surveyors (RICS) for the nomination of an adjudicator. By fax to the RICS on the 13th April 2000 Mowlem objected to the RICS making an appointment on the grounds that, under the terms of their agreement with Hydra–Tight, Mowlem was entitled to nominate an adjudicator from its list of approved adjudicators. Mowlem contends that the approved list of adjudicators consists of the members, for the time being, of Atkin Chambers, a set of barristers’ chambers in Gray’s Inn, London.
On the 14th April 2000, the RICS nominated Mr C D Wheeler, MSC FRICS FCIArb to serve as adjudicator, Mowlem objected. The RICS told Mowlem that it had no jurisdiction to decide on the objection ie whether or not a nomination should be made by them. The RICS may have been confirmed in its view that this was the only position it could take by a letter from Hydra–Tight’s Solicitor, faxed that morning, confirming that the RICS did have authority to make a nomination.
Mr Wheeler was, not surprisingly, concerned about the challenge to his jurisdiction, and on the 17th April 2000 wrote to both parties inviting them to make any further representations which they wished to make as to the validity of his appointment by 6pm on the 18 April 2000.
On the 19 April 2000 Mr Wheeler notified both parties that he regarded his nomination by the RICS as invalid. He said:
“I therefore conclude that the proper nominating body of an adjudicator under the sub-contract (as amended by Part 1 of the Scheme) is the ICE.”
By a letter dated 20th April 2000 to James R Knowles (who were acting on behalf of Hydra – Tight) Fenwick Elliott, Mowlem’s solicitors, invited Hydra–Tight to write a letter requesting Mowlem to nominate a member of Atkin Chambers as adjudicator.
By a letter dated the 25th April 2000 James R Knowles declined the invitation, saying that the attempt of one party to reserve for itself the nomination of the adjudicator created a potential for bias.
By a letter dated the 25th April 2000 Hydra–Tight applied to the Institution of Civil Engineers (ICE) to appoint an adjudicator. On the same day, Mowlem wrote to ICE to say that, under the terms of the sub-contract, the appointment must come from Mowlem’s approved list of adjudicators, consisting of members of Atkin Chambers, Gray’s Inn, and any purported appointment by ICE would be challenged on the grounds of lack of jurisdiction.
On the 28th April 2000 Mr Elven, a partner in the Anton Gill Partnership in Gillingham, Dorset, wrote to say that he had accepted the appointment from the ICE to act as adjudicator. Mowlem wrote to him on the same day, objecting that he did not have jurisdiction to adjudicate.
On the 4th May 2000 Mr Elven confirmed to the parties that, in his view, he had jurisdiction. His letter went on:
“I find that the sub-contract in question is unworkable since it has not proved possible to appoint an Adjudicator in accordance with the sub-contract adjudication procedure. In these circumstances the sub-contract under Disputes and Termination, provides for the President of the Institution of Civil Engineers to choose a new Adjudicator. I have accordingly been appointed to act in this matter.”
Also on the 4th May 2000 Fenwick Elliott wrote to Mr Elven to put him on notice that they did not accept the validity of his nomination. Making reference to the case of Northern Developments (Cumbria) Ltd v J J Nicholl, they said that they would under protest contest the substance of Hydra–Tight’s claim. On this basis the adjudication by Mr Elven has proceeded. Mr Elven wrote to the parties on the 5th May 2000 suggesting that the issue of jurisdiction should be resolved by this court before he proceeded with the reference to adjudication. Mowlem was prepared to agree to this sensible suggestion. Hydra–Tight was not (see letter from James R Knowles dated 8th May 2000).
By fax on the 10th May 2000 Fenwick Elliott on behalf of Mowlem confirmed to Mr Elven that it intended to make the application to this court. There followed a correspondence between Fenwick Elliott and Mr Elven in which Mr Elven makes the point (17th May 2000) that Fenwick Elliott had ample time by that date in which to apply to this court and obtain a decision on the jurisdiction issue.
The Atkin Chambers List
In his first witness statement dated 24 May 2000 Mr Donnelly, an assistant solicitor at Addleshaw Booth & Co, for the defendants, records that his clients were never supplied with Mowlem’s list of the approved adjudicators prior to the institution of the proceedings and says that no such actual headed list of approved adjudicators existed before the dispute arose.
It is suggested that such a list was required to have been drawn up as such by para 8.1 (e) of the Adjudication Procedure which defined the approval list of adjudicators as;
“The list of adjudicators who are considered suitable by the contractor to act in determining disputes under the main contract at the date of notification of dispute complied by the contractor.”
The defendant relies on Fenwick Elliott’s fax dated 23rd May 2000 which says:
“We enclose as requested a copy of the current list of approved adjudicators. Our clients have not sent such a copy to yours; neither have they been asked to do so. The list is not included with the contract documentation as it is ambulatory until a dispute arises: 8.1 (e) Appendix 3, Option 2 refers to the list ‘Current at the date of notification of dispute complied by the contractor’.”
In his witness statement dated 25th May 2000 Mr Wadsworth, project quantity surveyor responsible to the applicant for the commercial management of the project, responded by noting that the first time that the contention had been raised was in Mr Donnelly’s witness statement. He said that in mid-1998 he was informed by Bruce Jackson, an in-house solicitor for Mowlem, that he contacted Atkin Chambers and asked if the members were prepared to constitute the approved list of adjudicators. By a letter dated 16 July 1998 the clerk of Atkin Chambers, Mr Goldsmith wrote to Mr Jackson suggesting appropriate wording that the referring party shall request the senior clerk for the time being to nominate the member of chambers to act as adjudicator.
A manuscript note makes it clear that there were further discussions between the administrator of the chambers and the in-house staff of Mowlem. The decision to adopt the members of Atkin Chambers as the approval list was made in Mr Wadsworth’s presence on 6th January 1999.
It is suggested by the defendant that there was a requirement that a piece of paper should exist entitled “Approved List of Adjudicators”, which should be physically updated from time to time to reflect new arrivals into Atkin Chambers and departures to retirement or to judicial office.
I do not accept this construction. It is clear that the approved list should exist by identification and be able to be communicated on request, as it was to KCF in the course of the same construction contract on the 7th June 1999. In my view, there is no difficulty in construing the list of adjudicators under clause 8.1 (e) as being the members of Atkin Chambers for the time being. This method of identification is appropriate since the list gives a range of possible adjudicators depending on the availability of potential adjudicators, the size and complexity of the dispute and enables an adjudicator to be appointed who is free from any actual or perceived conflict of interest.
It also gives a sub-contractor the opportunity to object to a proposed adjudicator on the grounds of actual or perceived conflict of interest.
This does not dispose of the matter. I must now turn to the rather convoluted provisions of the contract and consider the rival contentions of the parties. Fortunately, there is a substantial measure of agreement on the construction of many of these provisions.
The Contractual Provisions
The starting point is the Definition Section SUBCONTRACT DATE – PART ONE enclosed with Mr Wadsworth’s letter of 7th May 1999, which provides that:
“The conditions of Sub-contract are the core clauses and the clauses for option A” (priced sub-contract) “and Y (UK) 2 (published by the ICE April 1998) of the second edition (November 1995) of the NEC Engineering and Construction Sub-contract plus the following Optional Clauses”.
These include Clause Z Additional Conditions of Contract. It is to be noted that the provision says “plus”, not “as modified or supplemented by”. The 1999 sub-contract document also provides that:
“The Adjudicator in this sub -contract is selected from the list of Adjudicators in accordance with the subcontract procedure or where the contractor issues a notification under clause 91.4 is the same person as the Adjudicator for the main contract. The main contract Adjudicator is to be agreed between the contractor and the Employer.”
The amended procedure, Option Y (UK) 2, published by the ICE in April 1998, is intended to comply with s.108 of the Housing Grants Construction & Regeneration Act 1996 (“the Act”) and the Scheme for Construction Contracts (England and Wales) Regulations 1998 SI No. 649 (“the Regulations”) which brought the Act into force on 1st May 1998.
Option Y (UK) 2 detailed clause 90 of the 1995 standard NBC Engineering & Construction Sub-contract 1995, a core clause, and replaced it with clause Y2.5 headed “Avoidance and Settlement of Disputes”. It provided in new clause 90.1 to clause 90.4 a mechanism called a Notification of Dissatisfaction (“Notification of Dissatisfaction”) which delays a referral to adjudication for four weeks during which time the parties have an opportunity to meet and resolve their differences. During this time the parties agree that a dispute shall not have arisen and therefore there is no matter which can be referred to adjudication.
Clause 90.4 provides:
“The Parties agree that no matter shall be a dispute unless a notice of dissatisfaction had been given and the matter has not been resolved within four weeks. The word dispute (which includes a difference) has that meaning.”
The parties are agreed that these provisions are illegal Section 108 (1) of the Act defines dispute as “any difference”, and gives a unfettered right to refer the dispute to adjudication.
Clause 90.5 provides:
“Either Party may give notice to the other Party at any time of his intention to refer a dispute to adjudication. The notifying Party refers the dispute to the Adjudicator within seven days of the notice.”
This provision would conform to Section 108 (2) (b) of the Act taken on its own but not if taken in conjunction with Clause 90.4.
The contract is also subject to Option Z. This is set out in Appendix 3. It provides in Para 16:
“Except for any referral under Clause 91.4 any dispute is resolved in accordance with the ICE ADJUDICATION PROCEDURE (1997) amended as follows…”
It provides that para 3.2 of the scheme should be deleted and replaced with:
“Para 3.2A Where an Adjudicator has not been so named or agreed, the Contractor shall nominate an Adjudicator from the list of Approved Adjudicators”.
As I have already set out, “Approved adjudicators” is defined in new para 8.1 (e) as:
“… the list of adjudicators who are considered suitable by the Contractor to act in determining disputes under the main contract, current at the date of Notification of Dispute, compiled by the Contractor.”
Taken together, Mowlem says that it is clear that the list of Adjudicators deemed to be suitable by the contractors is that containing the members of Atkin Chambers, and one of their number and only one of their number should be appointed. They also say that, contrary to the opinion expressed by Mr Elven this cannot be frustrated by a refusal by Hydra–Tight to operate the agreed mechanism for the appointment of an adjudicator.
The defendant disagrees. It says that there should be a general referral in accordance with the ICE adjudication procedure and not a referral to Mowlem’s list of approved adjudicators. It says, first, that the regime set out in clause 90.1 and following is a mandatory regime for the avoidance and settlement of disputes. This includes the notice of dissatisfaction which is deemed, contrary to the definition in the Act, to fall short of amounting to a dispute.
Hydra–Tight says that it is simply illegal to make a provision denying a party an immediate right to refer a matter to adjudication once a dispute has arisen within the definition in the Act. This provision taints the provisions which follow. Therefore it is argued the statutory scheme applies.
It is also claimed that Para 3.2A of the received ICE procedure is fundamentally flawed in that it merely provides for the contractor to nominate an adjudicator from its list. There is no requirement that this should be done within any particular timescale.
The defendants say that para 2 (1) of the statutory scheme applies and in particular para 2 (1) (b) which provides:
“If no person is named in the contract or the person named has already indicated that he is unwilling or unable to act and the contract provides for a specified nominating body to select a person, the referring party shall request the nominating body named in the contract to select a person to act as adjudicator.”
The defendants say that ICE is the specified nominating body and that in relation to Mr Elven’s appointment it has acted correctly and Mr Elven’s appointment is valid.
The claimants say in answer that it was the clear intention of the parties in agreeing Option Z to provide an adjudication procedure that was not flawed and was compliant and that clause 90.5 of Option Y (UK) 2 should be construed to reflect the common intention which was to put forward a procedure which was in accordance with the Act.
Conclusion
Section 108 of the Act provides for a right to refer a dispute to adjudication and a mechanism by which it is to be achieved. It defines “dispute” as “any difference” (Section 108 (1)).
Section 108 (1) provides:
“A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.”
Section 108 (5) provides:
“If the contract does not comply with the requirements of subsections (1) to (4) the adjudication provisions of the Scheme of Construction Contracts apply.”
This contract does not comply with subsection (1) and subsection (2) (a) since, under clauses 90.1 to 90.4 of Y (UK) 2 the parties have no immediate right to refer at any time or to give notice of an intention to refer a dispute to adjudication. Under the wording of “SUBCONTRACT DATA PART ONE” enclosed with Mr Wadsworth’s letter of 7th May 1999, Y (UK) 2 remains part of the contract. I do not accept Mowlem’s argument that “plus” in Subcontract Data Part One means “as modified by” Optional Clause Z.
Having reached this conclusion, it is unnecessary to consider in detail the requirement under Clause 108 (2) (b) except to say that I accept the argument that Clause 90.1 and following does not provide a timetable for the securing of the appointment of an adjudicator and referral of a dispute to him within seven days. Therefore, on the plain wording of the statue, the Scheme applies.
I have considered whether, if some parts of the subcontract comply with the Act, they can be retained and the Act can be used in substitution for or to fill in those parts of the sub-contract which are contrary to the Act. But the words of the Act are clear. Either a party complies in its own terms and conditions with the requirement of Sections 108 (1) to (4) of the Act or the provisions of the Scheme apply.
Paragraph 2.1 of the Scheme sets out who is to act as adjudicator as
“(a) the referring party shall request the person (if any) specified in the contract to act as adjudicator or
“(b) if no person is named in the contract or the person named has already indicated he is unwilling or unable to act and the contract provides for a specified nominating body to select a person, the referring party shall request the nominating body named in the contract to select a person to act as adjudicator.”
The question is whether there is a person specified in the contract to act as adjudicator. Mowlem says that there is and that the person is to be nominated from the list of members of Atkin Chambers for the time being. The defendants say that there is no single adjudicator named and there is no list.
The agreement which the parties entered into June 1999 was expressed to be the core clauses of the ICE sub-contract and the clauses of Option A and Y (UK) 2 published together with Option Z. The contract provides a mechanism for the appointment of an adjudicator who is defined as,
“… the person selected from the List of Adjudicators in accordance with the Sub-contract adjudication procedure, or where the contractor issues a notification under Clause 91.4” (where the same dispute exists under both the sub-contract and the main contract) “is the same person as the adjudicator for the main contract.”
The list of approved adjudicators is defined in para 8.1 (e) as,
“… the list of adjudicators who are considered suitable by the Contractor to act in determining disputes under the main contract, current at the date of Notification of Dispute complied by the Contractor.”
The list of members of Atkin Chambers for the time being constitute a list of adjudicators considered suitable by the contractor. The only question which remains is whether this represents a sufficient identification of the adjudicator, or whether the scheme requires an individual adjudicator to be identified in advance to be able to be on hand to deal with disputes. In my view the Scheme does not so require. The person specified in the contract is the member of Atkin Chambers selected by the contractor as adjudicator at the time when the dispute arises. The adjudication must then proceed in accordance with the Scheme. If I had come to the conclusion that para 2.1 (a) of the Scheme did not apply, I should have concluded that under para 2.1 (b) of the Scheme the defendant would have been entitled to ask the ICE to select a person to act as adjudicator, as in fact they did.
I therefore find for the applicant, Mowlem. It remains to be considered the terms of the relief which I should give.
MR BRANNIGAN: My Lord, there remain a number of issues to deal with. The first of course is the one you have just flagged up, which is the precise terms of the relief. The relief which we would ask for is the relief which is set out in the statement of claim, by which I mean the declaration and the injunction.
JUDGE TOULMIN: What is the position as far as the present adjudication is concerned?
MR BRANNIGAN: My Lord, my learned friend and myself were debating the merits of that.
MR NISSEN: My understanding simply as a matter of chronology, is that the decision has not been issued and it is the 11th hour within which it has to be issued, so that is where it stands at the moment, as I understand it.
MR BRANNIGAN: That is my understanding as well, my Lord.
JUDGE TOULMIN: Am I able to grant an injunction against a party that is not present? Presumably not.
MR NISSEN: I think that is probably right.
JUDGE TOULMIN: And Mr Elven has not been joined.
MR NISSEN: No. That was a deliberate decision, as I understand it. Your Lordship may have seen that from the correspondence that there were all sorts of threats against him personally and so on. The decision was made not to join him.
JUDGE TOULMIN: So no injunctive relief can be claimed against him.
MR NISSEN: No.
JUDGE TOULMIN: So he cannot be enjoined from making the decision.
MR NISSEN: No. The only thing that my learned friend, I think, can do is an injunction – well, I would have thought a declaration that Mr Elven has no jurisdiction really deals with everything that he needs. I cannot see that there is anything further that he can possibly need.
JUDGE TOULMIN: You could ask for an injunction restraining your clients from taking any further action in relation to …
MR NISSEN: I suppose he could, though it is difficult to see what that could be if there is prior declaration that has no effect.
MR BRANNIGAN: I see the force in your Lordship’s point. What I would ask for is the declaration as set out in the particulars of claim. My Lord, there is a red bundle handed in which … you were using that brown bundle from earlier.
JUDGE TOULMIN: I have not got the red bundle. I have been working off the … but I have got the claimant’s application notice.
MR BRANNIGAN: My Lord, that is good enough. You will see about that application hopefully there will be a claim as part of it.
JUDGE TOULMIN: So it is a declaration in terms of para 1?
MR BRANNIGAN: My Lord. Yes.
JUDGE TOULMIN: Of the application for relief.
MR BRANNIGAN: My Lord, yes. And I would at this stage also ask for an injunction forbidding the defendant from taking any further step in the purported adjudication. Can I address you on that?
JUDGE TOULMIN: Before you do, let us see what is said about it.
MR NISSEN: My Lord, I simply say that, as a matter of practicality, it is sufficient for an declaration to be granted that he has no jurisdiction and that an injunction is an unnecessary stop because there is nothing further that we can usefully do with anything. This appears to be, for example, precluding us from writing to Mr Elven saying: “What has happened today?” I do not want to get into all those difficulties of paying Mr Elven’s bill, if we are called upon to do that. All matters of this sort seem to me to be rather unhelpfully within the ambit of the injunction and really met by a declaration that it has no effect.
JUDGE TOULMIN: I think they would be entitled to an injunction restraining the defendant from taking any step to implement any award which Mr Elven might take.
MR NISSEN: Yes, I do not have a difficulty with that.
MR BRANNIGAN: My Lord, can I tell you the concern which I have? I am not asking simply as a matter of form. If my learned friend were to take this matter further and seek to appeal your Lordship, he would be seeking to argue that at all material times in fact Mr Elven has had jurisdiction. I do not want us to be in a position where we now, the claimant, thinking that your Lordship is right in the decision he has made, simply say: “Well, there we are, Mr Elven, that is the end of it”, whereas the defendant keeps going and saying: “Well, in fact Mr Elven, we are going to appeal this. You do have jurisdiction. Please continue”. Now, we do not want that to happen because that would leave us in the rather precarious position where if the defendant were going to continue under protest any competent solicitors would have to, under protest, continue to participate in this adjudication.
JUDGE TOULMIN: Well, if I was to say “restrain from taking any step in the adjudication or to implement any award”?
MR BRANNIGAN: My Lord, to satisfy my learned friend’s problems, and I anticipate what is going to happen, you could put “save for the communication of this award to Mr Elven and save for the” …
JUDGE TOULMIN: But that is not a step in the adjudication.
MR BRANNIGAN: No. On that basis.
JUDGE TOULMIN: It is not a step in the adjudication. If I simply say “may not take any step in the adjudication or seek to enforce or implement.”
MR BRANNIGAN: My Lord, I am more than happy with that because that will cover, I think, all my learned friend’s concerns about being keen to pay Mr Elven’s bill and so on.
MR NISSEN: Yes. I had in mind perhaps your Lordship might like to lift the words from section 9(1), on the stay, of the Arbitration Act. “The step in the proceedings to answer the substantive claim.” One might be able to use “take any step in the adjudication to pursue the substantive claim”.
MR BRANNIGAN: Seeking to meet my learned friend’s concerns again, I have taken a note of what your Lordship means when you say “step” …
JUDGE TOULMIN: What am I going to say is an injunction. The claimants are going to have to draw up the order.
MR BRANNIGAN: My Lord, yes.
JUDGE TOULMIN: “1. A declaration in the terms of the relief sought.
2. Injunction restraining the defendant from taking any further step in the adjudication or seeking to enforce or implement any award which Mr Elven may make without the agreement of Mowlem.”
It would be a bit silly not to put in the last bit because if the claimants discovered that the adjudication was going rather well, it would look a bit silly if it was unable to be implemented if it was thought in the end that this was an appropriate resolution of the dispute.
MR BRANNIGAN: My Lord, yes. It would also cover the point which if I am conscious my learned friend made about the costs of it. If Mr Elven were to say that the defendant should end up paying his costs, then of course Mowlem would agree to that.
JUDGE TOULMIN: So if we put it in that form.
MR BRANNIGAN: My Lord, yes.
MR NISSEN: Can I just persist in qualifying “step” by “substantive step” which would, I hope, identify that we are talking here about the furtherance of the thing rather than any administrative … I am concerned, this is an injunction which has its usual consequences, that my solicitors do not get too concerned about taking administrative steps in effect to wind the adjudication down.”
JUDGE TOULMIN: I will say:
“An injunction restraining the defendant”, and then it goes on in the normal way “from taking any substantive step in the adjudication or seeking to enforce or implement any award which Mr Elven may make without the agreement of Mowlem.”
MR NISSEN: I am obliged.
MR BRANNIGAN: My Lord, yes. I have taken a note. I can understand my learned friend’s concern.
JUDGE TOULMIN: I assume that part of the order when it is drawn up will be shown to the defendants and will be agreed and, if it is not agreed, then we may have to come back and deal with it.
MR BRANNIGAN: And face your Lordship’s wrath if it turns out that we cannot …
JUDGE TOULMIN: But I imagine that will not be necessary because both sides know what the position is and both sides are very sensibly and very prudently concerned about drafting (a) in committee and (b) on the hoof.
MR BRANNIGAN: My Lord, yes. My Lord, that is the first point, ie the precise nature of the relief. The second point is what we do about the remaining claim for damages for breach of contract.
JUDGE TOULMIN: Well, that has to be adjourned.
MR BRANNIGAN: My Lord, I was going to suggest adjourned with directions. If necessary it can be simply adjourned at the moment and directions can be sought to be agreed between the parties.
JUDGE TOULMIN: I think it should be adjourned at the moment and directions should be sought to be agreed.
MR BRANNIGAN: My Lord, I am content with that.
MR NISSEN: My Lord, yes. I think it is right to make one or two very short observations on it, if I may at this stage. The first is that, on any view, the sorts of figures that we are talking about are well below the jurisdiction of this court, however interesting questions that might arise from that investigation might be.
JUDGE TOULMIN: On the other hand, this would be, I think the first one.
MR BRANNIGAN: Yes.
MR NISSEN: That is right. I make that point.
JUDGE TOULMIN: I would think that this court should retain jurisdiction certainly for the first one on the basis that it is specialist court dealing with this area.
MR NISSEN: Yes. My Lord, the second point is that in any event we say an assessment would benefit from a deferral at least to this extent. Clearly in the light of the decision, my clients will now seek the appointment of an adjudicator form Atkin Building who will deal with the matter. A necessary issue in the assessment of damages will be assessing by how much the claimants’ costs have increased over and above, in effect, one adjudication because they would not get their costs in one adjudication since there is no entitlement to costs.
JUDGE TOULMIN: What I have said is that I am not going to make any directions today.
MR NISSEN: Right.
JUDGE TOULMIN: I think that I will be surprised to put it at its lowest, if that is the only matter that is left that actually has to come back to the court to be litigated.
MR NISSEN: Yes.
JUDGE TOULMIN: I can understand why parties wish to deal with the matter of principle but it would be disproportionate. I would have thought, for the parties to come back to the court to deal with that question of quantum unless there is some serious issue of principle involved which at the moment escapes me. There may be.
MR BRANNIGAN: My Lord, the position may of course be that if the next adjudication does not result in a situation where both parties are satisfied with it, that the whole matter might have come back before the court, at which point this would be part thereof.
JUDGE TOULMIN: That is unlikely to be the outcome.
MR BRANNIGAN: I am merely speculating.
JUDGE TOULMIN: That is likely to be the outcome in view of the attitude this court has taken to adjudications which have been validity pursued.
MR BRANNIGAN: Oh no, I entirely understand that and I entirely understand the enforcement provisions, that any award is likely to be enforced. But as to what happens thereafter between these parties as to whether or not they agree that is speculating.
JUDGE TOULMIN: I am, I think, indicating that I would have expected that if there was a properly constituted adjudication the parties would abide by the results of that.
MR BRANNIGAN: No doubt that is what will happen. As I say, that was the second point and, as I understand it, what your Lordship has done is to adjourn off the claim for damages to another date.
JUDGE TOULMIN: Yes.
MR BRANNIGAN: Adjourned generally, I think.