Hart Investments Ltd -v- Fidler & Anor
Case reference:
[2006] EWHC 2857 (TCC)
Friday, 3 November 2006
Key terms: Flank wall collapse - trespass - restraining order - damages - setting aside - CPR 6 - enforcement of adjudicator's decision - referral out of time - strict time limit - construction contract - in writing - Section 107
Hart engaged Larchpark to carry out construction work in Muswell Hill, North London. Fidler was the engineer. On 5th February 2004 the flank wall of the property collapsed. This led to an action in trespass, the seeking of a restraining order and then a claim for damages. A default judgement was issued, and after consideration of CPR Part 6, this was set aside.
Larchpark sought payment of unpaid sums from Hart. The Adjudicator decided that Larchpark was not responsible for the collapse and awarded them payment.
Hart defended payment of the Adjudicator's decision on two grounds. Firstly, that there was no construction contract in writing in accordance with Section 107 of the Act. Secondly, that the Referral had been served out of time.
HHJ Coulson QC considered the English Law case of Simons Construction Ltd v Aardvark Developments Ltd [2004] BLR 117 which conflicted with the later Scottish case of Ritchie Brothers Plc v David Phillip Commercials Ltd [2005] BLR 384. The Scottish court came to the conclusion that if a decision was issued after the expiry of the 28 day period, then it was a nullity. Paragraph 7(1) of the Scheme was clear that the Referral must be provided "not later than 7 days" after the notice of intention to refer. His Honour preferred the Scottish approach of Ritchie Brothers, noting that there was no distinction between a delay of just one day or a delay of one month. Adjudication was supposed to be a rapid process and the purpose of the Act was to ensure that a decision was given quickly. The referral must therefore be made within 7 days. A party could of course consent to the irregularity, but in this case there had been no waiver. The decision would therefore not be enforced.
In respect of the second point, the documents relied upon to support the argument that there was a written construction contract were not adequate. In particular, the scope of the work was not properly identified and was subject to future orders which could be oral. It was therefore not possible to identify a written construction contract. This was the second reason to decline enforcement of the award.
Larchpark sought payment of unpaid sums from Hart. The Adjudicator decided that Larchpark was not responsible for the collapse and awarded them payment.
Hart defended payment of the Adjudicator's decision on two grounds. Firstly, that there was no construction contract in writing in accordance with Section 107 of the Act. Secondly, that the Referral had been served out of time.
HHJ Coulson QC considered the English Law case of Simons Construction Ltd v Aardvark Developments Ltd [2004] BLR 117 which conflicted with the later Scottish case of Ritchie Brothers Plc v David Phillip Commercials Ltd [2005] BLR 384. The Scottish court came to the conclusion that if a decision was issued after the expiry of the 28 day period, then it was a nullity. Paragraph 7(1) of the Scheme was clear that the Referral must be provided "not later than 7 days" after the notice of intention to refer. His Honour preferred the Scottish approach of Ritchie Brothers, noting that there was no distinction between a delay of just one day or a delay of one month. Adjudication was supposed to be a rapid process and the purpose of the Act was to ensure that a decision was given quickly. The referral must therefore be made within 7 days. A party could of course consent to the irregularity, but in this case there had been no waiver. The decision would therefore not be enforced.
In respect of the second point, the documents relied upon to support the argument that there was a written construction contract were not adequate. In particular, the scope of the work was not properly identified and was subject to future orders which could be oral. It was therefore not possible to identify a written construction contract. This was the second reason to decline enforcement of the award.