Walter Lilly & Co Ltd v DMW Developments Ltd [2008] EWHC 3139 (TCC)

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Either party may seek a final determination of the issues decided by an adjudicator (whose decision is temporarily binding) in the TCC.

Mr Justice Coulson, Queen’s Bench Division, Technology and Construction Court


DMW engaged Walter Lilly to build a property in Earl’s Court, several rooms of which were required under the contract to be fitted with American Black Walnut natural timber veneer (“the veneer”).  A dispute arose when the veneer faded, leading DMW to withhold approximately £90,000 from Walter Lilly.  The dispute was referred to adjudication, and the Adjudicator concluded that the fading was caused by natural light and constituted a breach of contract by Walter Lilly.  The decision did not identify which term(s) of the contract Walter Lilly was said to have breached.

Walter Lilly sought a declaration under Part 8 of the Civil Procedure Rules (“CPR”), which entitles a claimant to seek the court’s decision on a question which is unlikely to involve a substantial dispute of fact, that any natural fading of the veneer supplied and installed by Walter Lilly did not constitute or give rise to a breach of contract.


DMW argued that the application should not be entertained because it was effectively an appeal from the Adjudicator; alternatively it was not suitable for determination under Part 8, as it raised a number of significant disputes of fact.  Walter Lilly argued that the action was appropriate for Part 8, as the Adjudicator had already determined that the cause of the fading was natural light and the only question at issue was therefore how Walter Lilly could be in breach of contract as a consequence. 


The Court rejected DMW’s first contention, holding that an adjudicator’s decision is temporarily binding and it is open thereafter to either party to seek a final decision in the TCC on the point considered by the adjudicator.

As to DMW’s second argument, the Court noted that DMW had, in the course of the Part 8 claim, made it clear that its case was not in fact based on the Adjudicator’s conclusion that the only cause of the fading was natural light; DMW’s case was that there were inherent deficiencies in the veneer supplied by Walter Lilly.  Walter Lilly accepted that the arguments raised by DMW were not appropriate for determination under Part 8, but maintained that it was not seeking resolution of those issues but merely a declaration that the fading could not of itself constitute a breach of contract. 

The Court accepted DMW’s submission that the declaration sought by Walter Lilly was too wide in this respect and risked cutting across the arguments now being raised by DMW.  However, the Court considered that it was appropriate (and, although seemingly self-evident, potentially likely to assist the parties in setting out more clearly the parameters of their dispute) to grant two declarations along the following lines:

  • That there must be a breach of an express or implied term of the contract by Walter Lilly in order for Walter Lilly to be liable for the fading of the veneer and
  • That if the only cause of the fading was natural light, that on its own could not render Walter Lilly in breach of contract.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit



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