Levolux A.T. Limited -v- Ferson Contractors Limited
Wednesday, 26 June 2002
Key terms: Summary Judgement - Part 24 - Part 8 - GC/Works Sub Contract with amendments -clause 38(a) - determination - regularly and diligently - suspension -clause 38.12 - section 111
The Claimant, Levolux, was a sub contractor engaged under the GC/Works sub contract with amendments to supply and fit brise soleil and louver panels for the Defendant, Ferson, Levolux served a notice of intention to refer a dispute to adjudication dated 25 March 2002 in respect of a failure to pay application number 2. The Respondent relied upon a notice of withholding payment, but Levolux contended that the notice was not a valid notice within section 111 of the Act. The Adjudicator issued his decision dated 30 April 2002 which held that the withholding notice did not comply with the requirements for Section 111 of the Act and therefore concluded that payment of £51,659 inclusive of VAT, together with interest, costs and the Adjudicator’s fee should be paid by to Levolux.
The Claimant claimed summary judgement for the amount of the decision. However, the Claimant had commenced the action pursuant to CPR Part 8 (alternative procedure for claims) rather than CPR Part 24 (the part dealing summary judgement). The Defendant accepted that the matter could be heard as a Part 24 matter.
The Defendant’s primary case was that it had determined the sub contract. Alternatively, the Defendant argued that it could rely upon the amended clause and set off and/or counterclaim against the decision of the Adjudicator. The amendment to the GC/Works sub contract stated at clause 38A.11 that “neither party shall be precluded from raising any right of set off, counterclaim or abatement in connection with the enforcement of an Adjudicator’s decision”. The Claimant had suspended the works as a result of non payment. The Defendant then issued determination notices for failing to proceed regularly and diligently. The dispute referred to adjudication was in respect of the valuation and withholding, and did not include an issue in respect of determination.
HHJ Wilcox held that the amount owing pursuant to the Decision should be paid to the Claimant. This was on the basis that the parties had accepted, by reference to clause 38A7 of the contract that a decision would be binding pending litigation or arbitration. The amended clause 38A.11 in respect of a right to withhold and/or set off against an Adjudicator’s decision was in conflict with section 111(1) of the Act requiring an effective notice. Therefore, HHJ Wilcox enforced the Adjudicator’s decision.
The Claimant claimed summary judgement for the amount of the decision. However, the Claimant had commenced the action pursuant to CPR Part 8 (alternative procedure for claims) rather than CPR Part 24 (the part dealing summary judgement). The Defendant accepted that the matter could be heard as a Part 24 matter.
The Defendant’s primary case was that it had determined the sub contract. Alternatively, the Defendant argued that it could rely upon the amended clause and set off and/or counterclaim against the decision of the Adjudicator. The amendment to the GC/Works sub contract stated at clause 38A.11 that “neither party shall be precluded from raising any right of set off, counterclaim or abatement in connection with the enforcement of an Adjudicator’s decision”. The Claimant had suspended the works as a result of non payment. The Defendant then issued determination notices for failing to proceed regularly and diligently. The dispute referred to adjudication was in respect of the valuation and withholding, and did not include an issue in respect of determination.
HHJ Wilcox held that the amount owing pursuant to the Decision should be paid to the Claimant. This was on the basis that the parties had accepted, by reference to clause 38A7 of the contract that a decision would be binding pending litigation or arbitration. The amended clause 38A.11 in respect of a right to withhold and/or set off against an Adjudicator’s decision was in conflict with section 111(1) of the Act requiring an effective notice. Therefore, HHJ Wilcox enforced the Adjudicator’s decision.