BRAVEJOIN COMPANY LIMITED v PROSPERITY MOSELEY STREET LIMITED

The Claimant is a company that is engaged in steelwork, cladding, and related fabrication. The Defendant is a single purpose vehicle engaged in the development of a site in Moseley Street in Birmingham. The Claimant was engaged to perform works on that site as a subcontractor to J A Ball. That company went into administration. The Claimant’s case is that it was then engaged directly by the Defendant.

In November 2020 the Claimant rendered invoices to the Defendant. Rather I should say that it rendered invoices in the following circumstances. The invoices were sent under cover of an email of 9^th November 2020 to chrishay@prosperitydevelopments.co.uk. It is not disputed that Mr Hay was acting on behalf of the defendant company and potentially others in what I will call the Prosperity Group. It is also not disputed that the defendant company did not have its own website or email address. The 9^th November email had the subject “Moseley Street invoice - 21289” and said: “Good afternoon, please find enclosed invoice 21289.” There were similar emails in respect of the other invoices which were sent on the same date.

Invoice 21289 was from the Claimant. It was addressed to “Prosperity Developments” and had the customer order number “Mr C Hay PMSL-015-009” with Bravejoin Limited’s job reference “C8390”. The other emails and invoices were in similar terms though not all had the PMSL-015-009 reference as well as that of Mr Hay. The total amount of the invoices was £77,500-odd. Those invoices were sent, as I have said, on 9^th November.

At 12.42 on 19^th November Mr Hay responded from the email address chris.hay@prosperitydevelopments.co.uk on a letterhead which simply said “Prosperity Developments” and gave a Prosperity Developments website. The response was sent to “admin@Bravejoin.co.uk” and copied in various Bravejoin personnel. The heading of the email was “Re Moseley Street - payment confirmation” and it said “Thank you. I’ll have them paid on 11 December 2020.”

Then twenty minutes later, at 13.03 on 19^th November 2020, Mr Hay sent an email with the same subject line, “Moseley Street - payment confirmation” with an attachment “Bravejoin’s site valuation 01PDF. The email said:

That email had attached to it on a Prosperity Developments’ pro forma a “subcontract valuation” operating for these purposes as a payment notice. It is of note that it had a header: “Bravejoin - site - valuation 01” and that the contract was stated to be “Moseley Street, Birmingham.” The body of the document said:

The payment was valued at £37,889.59. There was a footer which had https://d.docs.live.net/...” and then a string of numbers in figures followed by “/prosperitymoseleystreetlimited/subcontractor/structuralsteelwork/bravejoin-site-valuation-01.” That valuation related to three of the six invoices which had been sent by the Claimant.

On 29^th January two pay less notices were sent in respect of two of the other invoices. They are in similar terms. I will deal with that which appears at p.99 in the electronic bundle. It begins with a reference in the top left: “PMSL-2901221-CH-Bravejoin”. The same reference but with a slightly different number appears on the second pay less notice. That is dated 29^th January and it is addressed to “Bravejoin Company Limited”. It is said to be in respect of the contract at Moseley Street. It is a notice to pay less and is expressed:

The pay less notice at page 99 says this in the last part of the text:

As I have noted, the payment notice had a release date of 15 December and, indeed, Mr Hay’s email of the same date as the payment notice said that he would have the invoices paid on 11^th December. There was, in fact, no payment. It seems that at some point, the Claimant intimated, suggested, or queried whether the proper defendant was Prosperity Wealth which appears to be another company in the group of companies related to the Defendant.

On 18^th February 2021 Trowers & Hamlins, the solicitors then acting for the Defendant, wrote to the Claimant’s solicitors under this heading:

I will not quote the whole letter but under a subheading “The contract”, it says:

The next but one paragraph says:

It then goes on to say this:

Then under the heading “PMSL’s claims”, it says:

The antepenultimate paragraph of the letter says this:

That letter, as I have said, was on 18^th February 2021. The Claimant did not respond to that letter and some little while later, on 16^th July 2021, it referred the dispute which it contended existed to adjudication.

On 6^th September Mr Paul Jensen, the appointed adjudicator, issued his decision. At [8] he dealt with the question of jurisdiction saying:

At [23], the adjudicator set out his conclusion as to the scope of the contract concluding that the order he found had been placed related only to design, and at [27], he said this about the six invoices:

It is that decision that the Claimant now brings proceedings to enforce. The matter is before me on the summary judgment application in respect of those enforcement proceedings.

The Defendant’s case was put in a witness statement by Mr Lumb who is an employee of the Defendant and a director of at least one other company in the Prosperity Group. Mr Lumb has today represented the Defendant in person. That witness statement appeared to be saying that there was no dispute between the Claimant and the Defendant potentially because the Claimant had intimated a claim against Prosperity Wealth, and also saying that there was no contract with the Defendant and so on that footing no dispute had crystallised before the adjudication took place.

In his oral submissions to me Mr Lumb put matters rather differently and his concern as set out today was that what had happened was that Bravejoin had produced a design that did not work and which was a failure and he asked why should the Defendant pay invoices for a design that did not work. Indeed, he said the Defendant was still happy to work with Bravejoin but was working to try and find a solution to the inadequacy of the design.

It can be a defence to an application to enforce an adjudication award that an adjudicator lacked jurisdiction and there would be no jurisdiction if a dispute had not crystallised before the commencement of the adjudication.

I have been helpfully referred to guidance as to how the courts have referred to the meaning of a dispute. So, firstly, in Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd [2007] EWHC 2421 (TCC), Akenhead J said this at [55] having reviewed the authorities:

Then in 2015 Coulson J in CSK Electrical Contractors Ltd v Kingwood Electrical Services Ltd [2015] EWHC 667 (TCC) said this at [4]. He referred to the starting point being the decision of Jackson J in AMEC Civil Engineering Ltd v Secretary of State for Transport [2004] EWHC 2339 (TCC) and after quoting from Jackson J said:

He noted that that was the approach that had been taken by Akenhead J in Ringway case.

The year before that, in 2014, Ramsey J in City Basements Ltd v Nordic Construction UK Ltd [2014] EWHC 4817 (TCC) had dealt with the matter thus beginning at [29]. At [29], he had quoted from Jackson J’s position in the Amec case. Ramsey J quoted thus from Jackson J’s comments, as adopted by Clarke LJ in the Court of Appeal in Collins (Contractors) Ltd v Baltic Quay Management [1994] Ltd [2004] EWCA Civ 1757:

At [31], Ramsey J noted that in the case before him there had been an application for payment. There was a long period of time up to the date for payment and from then until the final date for payment. He said:

At [32], he said:

I note the last sentence at [33]:

In [34], he said:

Ramsey J made it clear that he was not regarding that last point as of crucial significance in the interpretation of the question of whether there was a dispute or not but it is also clear it was a pointer as to whether or not there was a dispute and it is a similar pointer in the circumstances of this case.

Finally, I have been referred to the decision of Akenhead J in VGC Construction Ltd v Jackson Civil Engineering Ltd [2008] EWHC 2082 (TCC) at [49]. The relevant part of that paragraph is the second sentence where the judge said:

He went on to say:

My conclusion on the facts here is that there clearly was a dispute. Invoices were sent to Mr Hay. The terms of the invoices, including the order number, made reference to the Defendant. More significant are the responses in Mr Hay’s emails of 19^th November, the payment notice, and the pay less notice. Those were clearly issued on behalf of the Defendant to the Claimant. At one point, it does seem that the Claimant was confused as to the correct contractual counterparty and that is referred to in the letter from the Defendant’s solicitors of 18^th February. The letter of 18^th February 2021 asserted there was no dispute but it was, in fact, itself indicating that there was a dispute because it was denying any liability on the part of the Defendant to pay the Claimant. That must be an indication of a dispute in the context of the invoices, the payment notice, and the pay less notices. It is also significant that there was no payment at any stage after the date when Mr Hay said there would be payment and as was indicated in the payment notice.

The short point is that six invoices were rendered by the Claimant to the Defendant. They were treated by the Defendant as having been rendered to the Defendant. That is show by the payment notice which was clearly issued on behalf of the Defendant if only as indicated by the reference in the footer which must be the Defendant’s reference. More significantly the pay less notices relating to two out of the same batch of six invoices were avowedly on behalf of the Defendant. What explanation could there be in those circumstances for non-payment and that response other than that the Defendant was disputing liability to pay at least in the sense of not accepting its liability to pay? As I have said, that was shown by the letter of 18^th February.

The point that was raised in Mr Lumb’s witness statement and, to some extent, referred to in the correspondence that the dispute ceased because of the Claimant’s suggestion at some point that the payment should be from Prosperity Wealth, has to be considered. However, Mr Zvesper is right to say that that was not a withdrawal of the claim still less was it one on which the Defendant acted to its detriment. At most, it was a not uncommon raising of the question of which was the appropriate contracting party to be the recipient of any claim or proceedings in circumstances where, as was apparent from the correspondence, there was a lack of a company name on large elements of the email correspondence and, indeed, a lack of clarity shown in Mr Lumb’s comments to me today when I asked about his role. It is clear from all of that that the defendant company and other companies in the group proceeded somewhat informally as to the nature of which company was doing what. All doubtless understood what was happening on the ground but the formalities were not clear. It is not surprising, in those circumstances, that the Claimant appears to have questioned which company should be the recipient of any proceedings or claim. That, in circumstances where invoices were rendered; where a payment notice was sent; and where pay less notices were served does not mean that there was not a dispute nor does it mean that there was an abandonment of the claim or of the dispute of the kind which Akenhead J was referring to in the VGC Construction case.

Today, Mr Lumb raised rather different points. Today, Mr Lumb raised a challenge to liability to pay under the contract. It seems that the Defendant is aggrieved as to the position of the Claimant and aggrieved as to what the Defendant sees as the failure of the design produced by the Claimant. It may very well be correct that there was an ineffective design produced but the question before me today is enforcement of this adjudication award and the criticism which is now made of the claim of the Claimant under the invoices is not a defence today to the adjudication award and it can be of no relevance on the question of enforcement of that award.

The position, in very short terms, is this. At the time of the reference of the matter to the adjudicator there was a dispute between the Claimant and the Defendant. That dispute was referred to the adjudicator. The adjudicator had jurisdiction to conclude that dispute. He came to a decision that a particular sum of money was payable and that sum of money is payable. There is no defence with any real prospect of success to that claim and there will be summary judgment for the Claimant.

There will be judgment for that sum, plus interest.

The Claimant asks for interest on the same basis as was awarded by the adjudicator, namely under the Late Payment of Commercial Debts (Interest) Act 1998.

I am satisfied that is the appropriate rate here and I award interest on that basis. So that is £744.38 to the date of today and at a daily rate of £8.18 to the date of payment.

The Claimant was the successful party here. The normal rule is that the successful party recovers his, her, or its costs. There is no reason to depart from that rule here. So the Claimant will recover its costs.

The next question I have to decide is the basis on which they should be assessed. There are two bases of assessment, Mr Lumb. One is what is called the standard basis, which is for normal cases. The other is the indemnity basis. However, the courts have said that because adjudication enforcement is so important, the normal approach is to award indemnity costs in adjudication enforcement cases.

I think again Mr. Zvesper is right that this is a case where there was an application to enforce adjudication where the defence put forward, I have no doubt in good faith, was simply misconceived and never going to succeed. Therefore, there is no reason why the normal TCC approach of awarding indemnity costs should not follow in the particular circumstances here.

I am going to assess these figures. Assessing them on the indemnity basis, I have to have regard to what is a reasonable sum with any doubts as to reasonableness being resolved in the favour of the receiving party, that is the Claimant here, and taking no account of proportionality.

The original figure of £33,000-odd did seem on the high side even on the indemnity basis. The revised figure of a touch over £23,000, in my judgment, cannot be said to be unreasonable in the context of a half day adjudication, albeit one conducted virtually in the circumstances here.

Yes, I cannot say that that figure is not the appropriate figure. I will assess the costs in that figure.