Berry Piling Systems Limited v Sheer Projects Limite [2012] EWHC 241 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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

Judgment date: 21.02.2012

SUMMARY

(1) Where a point is made by an Adjudicator in his decision that has not previously been raised with the parties, this will not render his decision unenforceable on grounds of a material breach of natural justice if it does not from part of his reasons for reaching his conclusion and, even if it does, would not have made any material difference to the outcome.

(2) When considering a party’s ability to repay a sum for the purposes of an application for a stay of execution of a judgment enforcing an adjudicator’s award, the court should consider that party’s position at the time when the judgment sum might have to be repaid.

Technology and Construction Court, Mr Justice Edwards-Stuart

BACKGROUND

Sheer Projects Limited (“Sheer”) engaged Berry Piling Systems (“Berry”) as a sub-contractor to perform secant piling and associated works at an address in London for a contract sum of approximately £160,000.  Berry commenced work on 20 January 2011 but the works became delayed. 

Following a dispute regarding Berry’s payment under the contract, Berry referred the matter to adjudication claiming approximately £78,000.  Before the Adjudicator Sheer alleged that the delay had been caused by water seeping into his excavations as a result of Berry’s poor work.  Sheer also stated that delay was caused as there were “2 Piles missing [and] 1 Pile having a gap at high level”.  Berry contended that in its quotation of 22 October 2010 it had made it clear to Sheer that Sheer was to be responsible for any dewatering required.

The Adjudicator found that Sheer had failed to provide sufficient evidence or analysis of how Berry actually delayed Sheer’s progress.  Moreover, Sheer did not address Berry’s contention that under the contract Sheer was responsible for any dewatering.  After making these comments, the Adjudicator referred to a video showing the flow of water through the piles, and noted that it was significant at one particular leak.  The Adjudicator observed that there was no reason why “that water could not have been directed to a storage tank from which it could be pumped away”.  The Adjudicator concluded that Sheer had failed to prove that Berry caused any critical delays to the completion of Sheer’s work and awarded Berry £20,459.89 (plus VAT). 

Sheer did not pay.  Berry  applied to the court for summary judgment to enforce payment ofthe awarded sum.   Sheer opposed the application, submitting that the Adjudicator’s decision was unenforceable by reason of a material breach of natural justice in that the point he made in regard to the video footage of the leaking water was one that he had not raised with the parties.  In the alternative, Sheer requested that enforcement of any judgment in Berry’s favour be stayed on the ground that by reason of its financial circumstances Berry may be unable to repay the amount if Sheer is successful in arbitration proceedings which it had already commenced on the same dispute. 

ISSUES

The Court was asked to address the following issues:

  • Whether the Adjudicator’s decision was unenforceable by reason of a material breach of natural justice.
  • If Berry was entitled to summary judgment, whether execution of the judgment should be stayed. 

DECISION

The Court held:

  • That it was clear from the Adjudicator’s decision that Sheer’s claim for delay failed  because Sheer had not provided sufficient detail or proper analysis of the delays it alleged had been caused by Berry and had not challenged Berry's argument that the contractual responsibility for dewatering rested with Sheer.
  • That the Adjudicator’s comments about  the video showing the water flow were irrelevant to this and did not form part of his reasons for reaching his  conclusion.
  • That even if the adjudicator's suggestion about the ability to direct the leaking water to a storage tank had formed part of his reasons for reaching his conclusion, it would not have made any material difference to the outcome.  It would simply have amounted to an additional reason.
  • That Berry was therefore entitled to summary judgment.
  • That the separate arbitration proceedings taking place on the same issues did not affect the enforcement of an Adjudicator’s decision.  
  • That when considering a party’s ability to repay a sum, the court should consider that party’s position at the time when any award by the court might have to be repaid.
  • That Berry was currently trading profitably and was likely to do so for the foreseeable future.  Therefore there was no good reason why Berry would not be able to repay a judgment sum in 12 to 18 months time when a decision is reached in the arbitration proceedings.
  • That the application for a stay of execution of the judgment would therefore be refused.  

This summary was provided by CMS Cameron McKenna LLP.

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

Click here to read full-screen | Click here to print the case