Rochford Construction Ltd v Kilhan Construction Ltd

Today is a case management hearing in two different sets of proceedings relating to the same project, and the circumstances in respect of which they arise I will explain. They both concern adjudication. Rochford Construction Ltd. (“Rochford”) are defendants in an adjudication enforcement application brought by Kilhan Construction Ltd (“Kilhan”). I am just quickly going to outline the issues between the parties.

Kilhan have an adjudicator's decision in their favour for approximately £200,000. They have issued enforcement proceedings. These are listed to be heard on 13 February in this court, with a time estimate of two hours. The subject matter of that decision is interim application 9, which Kilhan lodged with Rochford on 20 May 2019. No payment was made in respect of the sum that Kilhan claimed was due to them, and that matter went to an adjudicator for his decision. The adjudication was commenced by way of a notice of adjudication on 27 November 2019, and in a decision that was produced by the adjudicator on Christmas Eve, namely 24 December 2019, Rochford was ordered to pay the sum of just under £200,000 in respect of that interim payment application. One (if not the main) issue which the adjudicator decided was the lack of a pay less notice. I am not going to go into the subject matter in any great detail, other than to say that the adjudicator considered the issues before him fairly carefully.

Rochford has issued a Part 8 claim. That was issued on 21 January 2020. The reason that the matter has been brought in before me, as the judge in charge, is that Rochford seek to have that Part 8 claim heard on the same occasion as the enforcement proceedings, which are currently listed for 13 February 2020. In the Part 8 details of claim, I am going to read out one paragraph of the executive summary, which was settled by counsel. It says:

Whether that is right or not is going to be resolved at the Part 8, but the court is in the current position. The parties do not agree, as set out potentially in the well known case governing such matters called Hutton v Wilson, that these proceedings should both be dealt with at the same time, namely the Part 7 enforcement of the adjudicator's decision, and the Part 8 hearing. In fact Ms White appears to have told me today - and I am not holding her to this, in case this is a misunderstanding or misapprehension on my part - that there are no issues on the validity of the adjudicator's decision other than those that are contained within the Part 8 claim. In other words, put slightly differently, it might be said to be the case that

What Ms White wants me to do is to set the Part 8 claim down on 13 February 2020 to be heard at the same time as the adjudication enforcement and also, it should be said, within the same time limit. That time limit is two hours. I have explored with her in her submissions how that two hours would be shared between each party. Consistent with the recent decision in the case of Kazakhstan Kagasy v Baglan & Ors [2020] EWHC 128 (Comm), a decision of Andrew Baker J, it is clear, as set down by the learned judge in that case at [15] and [16], that time estimates (a) have to be realistic, (b) have to include a sufficient time for all substantive arguments, and for an oral judgment to be delivered should the judge decide to give an ex tempore judgment, and the determination of consequential matters. Ms White's suggestion that her Part 8 claim can be heard within two hours is, in my judgment, wholly unrealistic. I will not labour the point, but it provides one hour for the judge to read, including any authorities that might be lodged (although she says there will not be very many) and 40 minutes per party for their oral submissions. I would observe that this morning has already taken 45 minutes, of which about three minutes have been spent in giving this ex tempore judgment. It is simply not remotely realistic that the Part 8 proceedings can be heard at the same time as the Part 7 enforcement, or within the two hours currently available on that date.

What that therefore means is that one moves to Ms White's secondary position, which is that 13 February 2020 should be put off, and both sets of proceedings should be listed to take place at the same time, with a longer time estimate, later in the year. I observe that this is in the context of an adjudication decision ordering payment having been delivered on 24 December 2019, with the payment not having been made. To put off the hearing on 13 February 2020 means that situation would continue into 2020. That is directly contrary both to the express terms of the Act, the intent of Parliament, and the substance of all of the enforcement decisions from Macob onwards. These have made it clear that adjudicator's decisions that are made with jurisdiction and in accordance with the rules of natural justice have to be complied with and, under the "pay now, argue later" ethos, it is the winner of the adjudication who is entitled to hold the money.

I am now going to deal with an authority which has been argued before me, because this sets down the modern current approach of the TCC in matters where there are competing enforcement and Part 8 proceedings. It is the case called Hutton Construction Ltd. v Wilson Properties (London) Ltd. [2017] EWHC 517 (TCC) to which I have already referred. It is a decision of the then judge in charge, Coulson J (as he then was), and he states in the relevant principles (between [2] and [7] of that judgment) what the starting point is in terms of enforcing an adjudicator's decision. He also identifies, from [14] onwards, what the court should do when there is no consent to Part 7 enforcement proceedings, and Part 8 proceedings on the substantive issue have been issued, being dealt with together. As he says at the end of [12]:

He then gives an example where there was a case called Kersfield which involved extensive pre-reading, a whole day's hearing, and a detailed reserved judgment. He said that in his view the practice that has grown up around challenges of that sort has worked relatively well but only where there is a large measure of consent between the parties, and that the problem in that case - and, I should add, the problem in today's case - was there was no such consent. The proper approach where there is no consent is set out between [14] and [19] in Hutton. He makes clear at [16] that the TCC Guide is to be seen as having been superseded by that judgment, and at [17] he says that a defendant must be able to demonstrate the following:

It is, in my judgment, beyond clear that the Part 8 proceedings cannot be heard on 13 February as there is only two hours of court time available. That is the period routinely set aside for an adjudication enforcement application under Part 7, and it is simply not possible to say that only five or ten minutes of that two hours would be required. In any case, the Part 8 proceedings, in my judgment, should be set down for a day in any event. It cannot possibly be said, on the documents that I have seen, that the adjudicator's construction of the contract clauses is beyond any rational justification, and the word "must", which appears in the executive summary of the Part 8, and which forms part of the case advanced in those proceedings, does not appear in any respect in the subcontract terms.

The question therefore becomes: should the winner in the adjudication have to wait to have its opposed enforcement application heard, to a date much later in the term when the court can accommodate a whole day hearing? In my judgment, not only would that be the wrong approach, it is contrary to the authority of Hutton, and it is contrary to the approach of the TCC. I would go so far as to say it would be wrong in principle to adopt such a course. The

__________