Carillion Construction v Stephen Andrew Smith [2011] EWHC 2910 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-lawnow.com/adjudication

Judgment date: 10.11. 2011

SUMMARY

Issues that are the same or substantially the same as those decided in a previous adjudication cannot be re-evaluated in a further adjudication.  The Court gave guidance as to the factors to be taken into account in considering whether the same or substantially the same dispute has been referred to or resolved in an earlier adjudication.

Technology and construction Court, Mr Justice Akenhead

BACKGROUND

Carillion Construction Ltd (“Carillion”) was the main contractor employed by The Royal Liverpool and Broadgreen University Hospitals NHS Trust to carry out infrastructure refurbishment at Broadgreen Hospital in Liverpool. In May 2000, Carillion engaged Underground Pipeline Services (the “Sub-Contractor”) to supply, install, test and commission the underground water and gas pipeline systems for the project.
 
The Sub-Contractor commenced the Sub-Contract works in mid 2000; but did not complete the work until 5 May 2001, which was considerably beyond the 24 week completion period required in the Sub-Contract. There were disagreements between the parties as to who caused the delay and if the Sub-Contractor was entitled to extensions of time.  Disputes also arose in relation to the value of the Sub-Contract Works.  These disagreements and disputes resulted in three adjudications. 

The Second Adjudication, commenced by the Sub-Contractor in June 2003, required the Adjudicator to decide if the Sub-Contractor was entitled to an extension of time to 5 May 2001 (or any other time) and to the sum of £380,589.53 (or any other sum) claimed as loss and expense caused by the delays.  In addition, the Adjudicator was asked to consider if Carillion was entitled to any Contra-charges that arose out of the delay in completion.  The Adjudicator concluded that Carillion was likely to have delayed the Sub-Contract Works but that the Sub-Contractor had failed to establish a causal link between the delay and the loss and expense.  He granted an extension of time to the Sub-Contractor for the period up to completion of the works and rejected Carillion’s claim for Contra-charges.

In September 2011, the Sub-Contractor commenced a Third Adjudication in which it claimed over £1m as loss and expense caused by the delays.  The Sub-Contractor claimed that it had not previously seen (or had time to evaluate) substantial documentation produced by Carillion in the Second Adjudication.  The Sub-Contractor also alleged that Carillion was in breach of the sub-contract in failing properly to value the loss and expense variation in 2001, 2003 and after the Sub-Contractor had put forward the revised claim in May 2011.  

In October 2011, Carillion applied to the Court for a declaration that the Adjudicator in the Third Adjudication had no jurisdiction in relation to the dispute that had been referred to him.  

ISSUES
 
The Court was asked to address the following issues:

  • Whether the Adjudicator in the Third Adjudication had jurisdiction to deal with the dispute referred to him.
  • Whether the dispute in the Third Adjudication was the same or substantially the same as the dispute in the Second Adjudication.

DECISION

The Court held that:

  • The following factors, amongst others, can be deployed in considering whether the same or substantially the same dispute has been referred to or resolved in an earlier adjudication:
      
    • One needs to consider what is and was the ambit and scope of the disputed claims which is being and was referred to adjudication.
    • The fact that different or additional evidence, over and above what was relied upon in the earlier adjudication, is deployed in the later adjudication will not usually alter what the essential dispute is or has been.
    • The fact that different or additional arguments to support or enhance a claiming party's position are deployed in the later adjudication will not usually of itself mean that it is a different dispute to that which was referred earlier.
    • The fact that the quantum is different or is claimed on a different quantification basis in the later reference to adjudication from that claimed in the earlier adjudication is not necessarily a pointer to the referred disputes being in substance different.
    • One should be particularly cautious about being over-awed in the exercise of comparison of two sets of documents purporting to set out the disputed claims for two adjudications by the amount or bulk of the detail, evidence, analysis, submissions or annexures attached to either.
    • It is legitimate to look at the expressed motivation by the party in the later adjudication for bringing it and the given reasons for the basis of formulation of the later adjudication claim.
    • One strong pointer as to whether disputes are substantially the same is whether essentially the same causes of action are relied upon in the earlier and later Notices of Adjudication and Referral Notices.  However, one must bear in mind that Notices of Adjudication and Referral Notices are not required to be in any specific form; they may be more or less detailed and they may or may not be drafted by people with legal expertise.  They do not need to be interpreted as if they were contracts, pleadings or statutes.
  • In the present case, the dispute referred in the Third Adjudication was the same or substantially the same as that referred in the Second Adjudication.  Each involved a claim for delay and disruption based loss and expense relating to extensive delays and disruption said to have been caused by breaches of contract and default on the part of Carillion.  The financial heads of claim were the same, albeit the figures were different.  The period up to which delay and disruption ran was the same.
  • The fact that a substantial amount of documentation disclosed in the Second Adjudication had now been analysed for the purposes of the Third Adjudication did not of itself convert the dispute referred to in the Third Adjudication into a different dispute.  The Sub-Contractor had had a substantial time in possession of that documentation during the Second Adjudication and had responded to it extensively in that Adjudication.    
  • The complaint about Carillion’s alleged failure to value the Sub-Contractor’s claim in 2001, 2003 and in May 2011 was not a new claim, it was merely another way to claim exactly what was being or could have been claimed before.
  • Accordingly the Adjudicator did not have jurisdiction.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-lawnow.com/adjudication

 

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