Michael John Construction Limited v (1) Richard Henry Golledge (2) Desmond Fielding Childs (3) Mario Carlo Carpanini (4) Robert Matthews
Case reference:
[2006] EWHC 71 (TCC)
Friday, 27 January 2006
Key terms: Enforcement - two decisions - unincorporated association - club - trustee - identity of appropriate party or parties for adjudication proceedings - bias - unfairness - more than one dispute
The claimant sought to enforce two decisions from the Adjudicator. The first adjudication decision was against the fourth defendant who at the time of the giving of the decision was a trustee of a club. The second decision was against the first, second and third defendants as trustees of the club at the time that the contract was made or in respect of the fourth defendant a person who actually signed the contract as agent of the trustees.
The defendants refused to pay on the basis that the adjudicator did not have any jurisdiction, as the proper responding parties should not have been the defendants, but each and every member of club. The key question was who was the appropriate party or parties against whom the adjudication should have been brought. In addition several jurisdictional challenges were also brought in respect of fairness and the question as to whether more than one dispute had been referred, and whether the matter in the second decision had already been decided in the first.
The first adjudication was against the fourth defendant Mr C Norman. It was brought against him because he had signed the contract. The defendant refused to pay. The identity of the members of the club or the trustees was not revealed. As a result of a pre-action disclosure the claimant then found out (for the first time) who the trustees were at the time of contract was signed. A second adjudication was then commenced against all four defendants.
HHJ Coulson QC noted that the club was not a separate legal entity, and that only individuals can be pursued. The question here is whether all of the members of the club needed to be pursued. The rules of the club were irrelevant, as the claimant had not been provided with a copy of them. A trustee entering into a contract would be personally liable under that contract. His personal liability would be unlimited (Lewin on Trusts 17th Edition; Maston Thompson & Evershed plc v Benn [1998] CLY NO 4875). The fourth defendant was therefore liable to the claimant as agent of the first, second and third defendants. The claimant could choose whether to pursue the trustees as principals, or fourth defendant as the agent of the principals. Had it known the true position it would have elected to enter judgment against the first, second and third defendants.
The Judgment should therefore be enforced. In respect of the jurisdictional challenges, the Judge decided that there had not been more than one dispute because the issue in respect of the identity of the parties was part of the initial disputes. Further, the second adjudication did not decide precisely the same issues, as parties were different. Finally, the Adjudicator had not been biased. It was not right to say that the Adjudicator might have been biased simply because he decided a second adjudication in the same way that he decided the first. There is nothing materially different about the submissions made by the claimant in the second adjudication that would suggest that the adjudicator should reach a different decision.
A stay would not be granted because the claimant’s difficult financial position had been brought about by the defendant’s failure to pay. Further, the Judge was not persuaded that any potential counterclaim would be worth as much as the £134,000.00 awarded by the Adjudicator.
The defendants refused to pay on the basis that the adjudicator did not have any jurisdiction, as the proper responding parties should not have been the defendants, but each and every member of club. The key question was who was the appropriate party or parties against whom the adjudication should have been brought. In addition several jurisdictional challenges were also brought in respect of fairness and the question as to whether more than one dispute had been referred, and whether the matter in the second decision had already been decided in the first.
The first adjudication was against the fourth defendant Mr C Norman. It was brought against him because he had signed the contract. The defendant refused to pay. The identity of the members of the club or the trustees was not revealed. As a result of a pre-action disclosure the claimant then found out (for the first time) who the trustees were at the time of contract was signed. A second adjudication was then commenced against all four defendants.
HHJ Coulson QC noted that the club was not a separate legal entity, and that only individuals can be pursued. The question here is whether all of the members of the club needed to be pursued. The rules of the club were irrelevant, as the claimant had not been provided with a copy of them. A trustee entering into a contract would be personally liable under that contract. His personal liability would be unlimited (Lewin on Trusts 17th Edition; Maston Thompson & Evershed plc v Benn [1998] CLY NO 4875). The fourth defendant was therefore liable to the claimant as agent of the first, second and third defendants. The claimant could choose whether to pursue the trustees as principals, or fourth defendant as the agent of the principals. Had it known the true position it would have elected to enter judgment against the first, second and third defendants.
The Judgment should therefore be enforced. In respect of the jurisdictional challenges, the Judge decided that there had not been more than one dispute because the issue in respect of the identity of the parties was part of the initial disputes. Further, the second adjudication did not decide precisely the same issues, as parties were different. Finally, the Adjudicator had not been biased. It was not right to say that the Adjudicator might have been biased simply because he decided a second adjudication in the same way that he decided the first. There is nothing materially different about the submissions made by the claimant in the second adjudication that would suggest that the adjudicator should reach a different decision.
A stay would not be granted because the claimant’s difficult financial position had been brought about by the defendant’s failure to pay. Further, the Judge was not persuaded that any potential counterclaim would be worth as much as the £134,000.00 awarded by the Adjudicator.