Vitpol Building Service v Samen [2008] EWHC 2283 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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The TCC cannot deprive a claimant of its potential right to adjudication by refusing to determine the existence and/or terms of a contract simply because a pre-action protocol process dealing with this and other issues has already been substantially completed.   

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

Background

Michael Samen invited tenders for building works to convert a London hotel back to its original status of family home.  Vitpol’s tender was successful and works were commenced in July 2006 before a contract had been agreed.  Contractual negotiations continued as the works progressed.  Disputes arose between the parties as to payment and defects claims.  In December 2007 Vitpol commenced the pre-action protocol process.  The letters exchanged by the parties pursuant to this process dealt with the entirety of the dispute, including (briefly) the issue of whether a contract existed at all and its terms if so. 

The pre-action protocol process was largely complete when Vitpol brought proceedings in the Technology and Construction Court (“TCC”) under Part 8 of the Civil Procedure Rules seeking general declarations as to the existence of the contract and its terms, and a more specific declaration that the IFC Form was incorporated into the contract (without which any contract would relate to building works for a residential occupier and would therefore fall outside the scope of adjudication).

Michael Samen argued that that the TCC had no jurisdiction to decide these matters.  This argument was considered in a short judgment by Coulson J in the context of the case management conference.  At the time of Coulson J’s judgment the pre-action meeting had not yet taken place, but was scheduled for the following week.

Issues

Michael Samen contended that the TCC had no jurisdiction to hear the Part 8 claim, because:

  • paragraph 9.4.1 of the TCC guide (second edition) was phrased in terms of “commenced adjudications” and no adjudication had yet been commenced and
  • there was a substantial dispute of fact relating to the question of the contract, and therefore the Part 8 procedure was inappropriate

If the TCC were found to have jurisdiction to hear the Part 8 claim, Michael Samen sought a stay of one month to allow the pre-action protocol meeting to go ahead.

Decision

Coulson J upheld Vitpol’s right to bring the claim under Part 8. 

Rejecting Michael Samen’s argument that the reference in the TCC guide to “commenced adjudications” prevented the court from hearing the claim, Coulson J held that the TCC guide did not define the TCC’s jurisdiction in every case or replace the CPR.  The judge emphasised that the provisions of the TCC guide did not shut out a bona fide dispute between the parties as to the existence of a contract, which might give the claimant the right to adjudicate.

Coulson J disagreed that the Part 8 procedure was inappropriate in the circumstances.  On the facts, the dispute was unlikely to involve any significant oral evidence as most of the material was in documentary form.  Even if the claim did end up involving issues which could only be determined on oral evidence, this was not uncommon in the TCC and in many cases a hybrid of Part 7 and Part 8 procedure had been agreed by the parties to accommodate this.  Coulson J noted that the procedure should serve the individual needs of the case, not dominate the proceedings.

Coulson J agreed that no direction should be made under the Part 8 claim until the pre-action protocol meeting had taken place and the parties had had time to reflect on it.  However, the judge did not think a stay was necessary, or that the proceedings gave Vitpol any unfair advantage or bargaining power over Michael Samen.  Coulson J agreed that unnecessary costs had been incurred by Vitpol’s sudden change of tack at this late stage in the pre-action protocol process, and noted that any costs orders would reflect his view that it would have been more efficient from a case management perspective to deal with all the disputes at once.  However, this view did not allow the court to deprive Vitpol of its right (or potential right) to adjudicate.  Coulson J concluded that he should therefore make directions enabling the contractual issues to be resolved as quickly as possible, whilst allowing sufficient time for the pre-action protocol meeting and preparation of Michael Samen’s evidence.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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