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England and Wales High Court (Technology and Construction Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Hillview Industrial Developments (UK) Ltd v Botes Building Ltd [2006] EWHC 1365 (TCC) (07 June 2006) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2006/1365.html Cite as: [2006] EWHC 1365 (TCC) |
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
B e f o r e :
____________________
HILLVIEW INDUSTRIAL DEVELOPMENTS (UK) LTD. | Claimant | |
- and - | ||
BOTES BUILDING LTD. | Defendant |
____________________
Official Shorthand Writers and Tape Transcribers
Quality House, Quality Court, Chancery Lane, London WC2A 1HP
Tel: 020 7831 5627 Fax: 020 7831 7737
MS. N. JEFFORD and MR. J. LEE (instructed by Thomas Eggar) appeared on behalf of the Defendant.
[Note: Ms Jefford argued the case
but was not available for the judgment]
____________________
Crown Copyright ©
JUDGE TOULMIN:
"3 Botes accepts that the Adjudicator's decision was a valid decision and that the normal practice of the court would be to give summary judgment as the mechanism for enforcing the decision. For the reasons explained below, however, in the particular circumstances of this case, Botes submits that the court ought not to do so at this stage."
"The adjudication shall be conducted in accordance with the Construction Industry Council's Model Adjudication Procedure from time to time in force … which are hereby incorporated into this contract."
"4. The Adjudicator's decision shall be binding until the dispute is finally determined by legal proceedings, by arbitration … or by agreement.
"6. The parties shall implement the Adjudicator's decision without delay whether or not the dispute is to be referred to legal proceedings or arbitration."
THE LAW:
"108(3) The contract shall provide that the decision of the Adjudicator is binding until the dispute is finally determined by legal proceedings … or by agreement."
1. As a matter of common law where a claimant and a defendant have a liability to each other, the general principle is that the defence of set-off arises. This applies, in the absence of clear words to the contrary, to building contracts as to other contracts (see Modem Engineering v. Gilbert Ash [1974] A.C. 689, 718 per Lord Diplock).2. The purpose of s.108 of the 1996 Act provides for the rapid resolution of disputes in the construction industry on an interim basis and is an exception to the general rule set out above.
3. Section 111 of the 1996 Act, dealing with intention to withhold payment, provides a comprehensive code governing the right to set-off against payments contractually due (see His Honour Judge Hicks QC in VHE Construction Plc v. RBSTB Trust Co. Limited [2000] BLR 187.
4. This general principle may be subject to certain limited circumstances where it may be possible to set off liquidated damages for delay against an Adjudicator's award (see Balfour Beatty Construction v. Serco [2004] EWHC (TCC) 3336 at Part VI of the judgment).
5. The intention of Parliament is that the decision of the Adjudicator is to be given effect in a way which is consistent with providing a quick and effective remedy on an interim basis and without consideration of arguments as to other provisions of the contract (see Ferson contractors v. Levolux AT Limited [2003] BLR 118, and His Honour Judge Gilliland QC in MJ Gleeson Group Plc. v. Devonshire Green Holdings Limited (Salford District Registry, 19th March 2004).
"Where the parties to a construction contract engage in successive adjudications each focused upon the parties' current rights and remedies, in my view the correct approach is as follows: at the end of each adjudication, absent special circumstances, the losing party must comply with the Adjudicator's decision. He cannot withhold payment on the grounds of his anticipated recovery in a future adjudication based on different issues. I reach this conclusion both from the express terms of the Act and also from the line of authority referred to earlier in this judgment."
He held that Cleveland was not entitled to set off against the award in the second adjudication either its anticipated recovery or even the actual recovery in the third adjudication where the sum was not yet due.