Caledonian Modular Ltd v Mar City Developments Ltd

Citation: [2015] EWHC 1855 (TCC)

Nature of case:
This was an adjudication enforcement case where Mar City Developments (‘MCD’) resisted enforcement on the basis that the document which the Caledonian Modular (‘Caledonian’) relied upon was not in fact a valid payment application.

Caledonian had been engaged by MCD to carry out construction works at a site in North London. Caledonian submitted its interim application 15 on 30th January 2015 showing a net sum of ~£1.5m due. This was met with a valid pay less notice by MCD.

On 13th February 2015, Caledonia sent MCD an email which attached an updated account to take account of the valuation of scaffolding works. The increase in the amount due was ~£6,000. Neither the email nor the attached documents expressly claimed to be application 16. One of the attached documents was still headed “Application number 15” but took account of the minor increase in the sum due.

MCD questioned the purpose of the email and the attached documents but received only a holding reply from Caledonian. Subsequently, Caledonian sent MCD a series of invoices dated 19th March 2015 which were met by a valid pay less notice.

Caledonian successfully referred a dispute on the email of 13th February 2015 to adjudication. The adjudicator found that the sum claimed was due, as there had been no valid pay less notice. MCD refused to pay, and when Caledonian sought to enforce, it claimed that it was not a valid application.

As a preliminary point, Coulson J noted that in most cases it would not be appropriate to deal with matters which went to the substantive outcome of the adjudication at the enforcement stage where there was no issue of jurisdiction or natural justice. He stated that in the rare cases where the issue is a short, self-contained point, which requires no oral evidence or other elaboration than that which is capable of bring provided during a short interlocutory hearing, then the defendant may be entitled to have the point decided at the enforcement stage.

Coulson J held that the email of 13th February 2015 did not claim to be a new application for an interim payment. He noted that when questioned, Caledonian did not claim that the email represented a new application. He noted that if a party wanted to take advantage of the fact that failure to serve a pay less notice renders the sum claimed indisputably due then it was incumbent on the claiming party to set out their interim claims with proper clarity.

Link to Judgment

Counsel: William Webb appeared for the Claimant.

Counsel

William Webb

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