| Date | 22 March 2006 |
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| Judgment | Quietfield Ltd v Vascroft Contractors Ltd, [2006] EWHC 174 (TCC) |
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| The Issue | Extension of time claims in adjudications. |
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| Implication |
Within adjudication proceedings, a contractor may rely, by way of defence against a claim for liquidated damages, upon an alleged entitlement to an extension of time, irrespective of whether that entitlement has been previously notified to the referring party. However, a contractor cannot rely upon an alleged entitlement to extension of time which has been considered and rejected in previous adjudication proceedings. |
printIn April 2003, Quietfield employed Vascroft to carry out some renovations, alterations and additions to Denham Place in Buckinghamshire. The contract was the JCT 1998 standard form with a number of amendments. Work duly commenced in 2002 but, during the course of the works, delays occurred and completion was delayed for a substantial period beyond the original date for completion of 12 February 2004. During the course of the works Vascroft sent a number of letters to Quietfield's project manager and architect recording the delays to the project. In addition to these letters, Vascroft sent two specific applications for extensions of time to the architect. The architect did not accede to the applications made by Vascroft and consequently, on 1 August 2005, Vascroft sent a notice of adjudication to Quietfield. The dispute referred to whether, and to what extent, Vascroft was entitled to an extension of time on the basis of the two applications. In August 2005, the adjudicator was appointed and, six weeks later, he delivered his decision. The adjudicator declined to grant a declaration that Vascroft was entitled to an extension of time. Within his reasoning the Adjudicator concluded that Vascroft had failed to provide ‘’either evidence or reasoned analysis to demonstrate that the events upon which Vascroft rely caused delay to the completion of the works.”. Unfortunately for Vascroft, the adjudicator's decision was not the end of their misery. Quietfield had decided to take the initiative and began a second adjudication. This was abandoned for procedural reasons but in October 2005 Quietfield began a third adjudication. In this adjudication, Quietfield claimed liquidated and ascertained damages of £588,000 for the contractor's delay beyond 12 February 2004. In its notice of adjudication, Quietfield relied upon the decision reached in the first adjudication in order to demonstrate that Vascroft was not entitled to any extension of time in respect of that period. The same adjudicator was appointed for this third adjudication. In response, Vascroft asserted that it was entitled to an extension of time in respect of the entire period of delay. The grounds upon which Vascroft now claimed an extension of time were set out in Appendix C to their response. This Appendix was almost 400 pages long and the contents set out numerous causes of delay. It also traced the dominant critical path and contained an analysis of the delays to completion caused by each of the relevant events. The parties then proceeded to argue whether the adjudicator could pay any regard to the contents of the Appendix or whether the adjudicator was bound by his previous decision that no extension of time was due. In his decision the adjudicator declined to consider Vascroft's submissions on extension of time, holding that this matter had already been determined in the first adjudication. The adjudicator then went on to decide that Vascroft were liable to pay liquidated damages for the delay in the sum of £588,000 plus interest. Vascroft took the view that the adjudicator's decision in the third adjudication was unlawful and declined to pay the sums for which they were liable. Quietfield, aggrieved by the non-payment, commenced proceedings in the Technology and Construction Court before Mr Justice Jackson. Justice Jackson carried out a review of the Construction Act, the Scheme for Construction Contracts and the previous decisions relating to multiple adjudications and concluded that the following four principles apply when there are successive adjudications about extension of time and/or the deduction of damages for delay: (i) “Where the contract permits the contractor to make successive applications for extension of time on different grounds, either party, if dissatisfied with the decisions made, can refer those matters to successive adjudications. In each case the difference between the contentions of the aggrieved party and the decision of the architect or contract administrator will constitute the "dispute" within the meaning of section 108 of the 1996 Act.In applying those principles to the case in hand, Justice Jackson concluded that, in the third adjudication, Vascroft was entitled to advance any defence available to them, irrespective of whether that defence had been notified when the relevant dispute arose. Mr Justice Jackson was satisfied that Vascroft's alleged entitlement to an extension of time, as set out in the Appendix to its response to the third adjudication, was substantially different from the claims for extension of time which were advanced in the first adjudication. For that reason, the Judge decided that, in the third adjudication, the adjudicator should have considered Vascroft's response but had failed to do so. Therefore the adjudicator's decision could not be enforced because he had failed to abide by the rules of natural justice. Accordingly, Quietfield’s application for enforcement of the adjudicator’s decisions was declined.
CJ-0611
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