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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Augres Construction Supplies Limited v Legendre Contractors Limited (Royal Court : Hearing (Civil)) [2025] JRC 054 (26 February 2025) URL: https://www.bailii.org/je/cases/UR/2025/2025_054.html Cite as: [2025] JRC 054, [2025] JRC 54 |
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Application for summary judgement in relation to an adjudicator decision
Before : |
Advocate David Michael Cadin, Master of the Royal Court |
Between |
Augres Construction Supplies Limited (t/a Augres Landscapes) |
Plaintiff |
And |
Legendre Contractors Limited |
Defendant |
Advocate G. C. Staal for the Plaintiff.
Advocate R. J. McNulty for the Defendant.
judgment
the Master:
1. This is my judgment in relation to an application by the Plaintiff, Augres Construction Supplies Ltd ("ACSL") for summary judgment against the Defendant, Legendre Contractors Limited ("LCL") in relation to the decision of an adjudicator dated 30 August 2024 in the sum of £179,177.02.
2. This claim arises out of the Horizon Development at the Waterfront in Jersey. LCL were the main contractors and ACSL were engaged to provide landscaping services.
3. On 21 March 2022, LCL provided ACSL with a Letter of Intent. That document was subject to English law, authorised ACSL to commence ordering specified materials, and noted that "These Works will be carried out in accordance with the terms of the JCT Design and Build Sub-Contract Agreement 2011 edition subject to amendments." It was subsequently signed by ACSL.
4. Various contractual documents, in the form of a JCT Design and Build Sub-Contract and annexes (the "JCT Contract"), were issued to ACSL by LCL in August 2022. The JCT Contract contained, amongst other terms:
(i) Article 4, which provided that a dispute could be referred to adjudication in accordance with Clause 8.2 of the Sub-Contract Conditions; and
(ii) an amended Clause 8.2 of the Sub-Contract Conditions which was in the following terms:
"Provided that -
8.2.3.1 The provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011 as if it is in full force and effect in Jersey, as amended by this clause 8.2 shall apply where pursuant to Article 4 either Party refers any dispute or difference arising under this Sub-Contract to adjudication.
8.2.3.2 The Scheme shall be amended as follows:
Paragraph 13 - After the words in line 1 "the adjudicator may" add the words "subject to clause 13A".
Paragraph 13 (g) - At the beginning of the paragraph add the words "subject to clause 13A".
At the end of paragraph 13 add a new clause 13A:
"13A The adjudicator shall direct that the timetable for the adjudication shall provide that where the Contractor is the party to whom the referral notice is sent under paragraph 7(2) the Contractor shall have a minimum of 14 days to send a response."
8.2.4 the Adjudicator shall give reasons for his decision in writing at the same time as he gives his decision; and
8.2.5 paragraph 24 of the Scheme shall not apply and the decision shall be enforced by way of application to the Royal Court of Jersey."
5. On 1 September 2022, ACSL sent to LCL Revision J ("Rev J") of its Bill of Quantities. That document comprised an excel spreadsheet with a number of highlighted entries. The covering email noted that prices and labour rates had increased and, referring to the attached document, stated:
"With the above said, please see attached our latest offer for this project.
Please note these rates are only valid until the 30th September 2022 as this is in most cases the maximum that suppliers are prepared to offer
Once the contract is amended and signed, we will immediately place orders with all remaining suppliers and seek immediate delivery in order to stabilize prices "
6. That revision was immediately rejected by LCL who stated that once the Letter of Intent had been issued, the rates were fixed, and the contract sum could only be altered by the formal contract change mechanism. It does not appear that any resolution of this issue was reached. However, the parties agree that ACSL began carrying out the works on 25 July 2022 and thereafter invoices were issued, and paid, until January 2024.
7. On 10 January 2024, LCL issued Payment Notice 19 to ACSL in the sum of £105,093.53 which stated that:
"Notice is provided in accordance with the terms of your order/appointment that the Notified Sum as calculated below is due for payment by the Final Date for Payment."
8. The final date for payment was recorded as 24 January 2024 but no payment was made. Thereafter ACSL issued a further, final invoice on 31 January 2024 which also remains unpaid.
9. Adjudication is a statutory remedy available in England under the Scheme for Construction Contracts (England and Wales) Regulations 1998, as amended (the "Scheme"). In Carillion v Devonport Royal Dockyard Ltd [2005] EWHC 778 (TCC), Jackson J held that:
10. The Scheme is designed to reach an interim resolution rather than to determine once and for all the rights and wrongs of any contractual dispute. Clause 23 of the Scheme provides that:
11. Although this is a statutory scheme in England, it does not apply in Jersey and there is no local equivalent. However, parties are free to adopt the provisions of the Scheme as part of their contractual arrangements. Where they do so, they will also incorporate the associated English jurisprudence, as held by Master Thompson in Ductclean (UK) Limited v Freedom Church Jersey Limited [2020] JRC 054:
12. As both the Master of the Royal Court, and a mediator in the Petty Debts Court, the majority of the building disputes being litigated in Jersey come before me at some stage. Many of those disputes involve building contracts based on those issued by the Joint Contracts Tribunal. However, parties in Jersey routinely delete the contractual provisions which might otherwise allow adjudication, seemingly on the basis that they relate to an English statutory scheme that is not available in Jersey and has no local equivalent. Further, in deleting the adjudication provisions, parties often strike out the provisions relating to arbitration too, leaving litigation as their only remedy.
13. In my experience, litigation, or even the threat of litigation, can result in the contractor leaving site, or the employer refusing to allow the contractor back on site, which often exacerbates an already fraught situation. Lest there be any doubt, litigation is both expensive and time-consuming and neither of these characteristics assists with cash-flow or in getting the building works finished. In contrast to litigation, "adjudication should be as speedy and inexpensive as circumstances permit" and whilst it may not be perfect, experience has shown that "on many occasions, the parties have chosen to use the adjudicator's decision as, or as the basis for the final settlement of their disputes" (as noted by the Court in Carillion at paragraph 9 above). In terms, adjudication can provide a route to a swift decision, by a suitably qualified construction professional, and is aimed at keeping the cash flowing and the project continuing.
14. I would respectfully encourage all parties to construction contracts in Jersey, and indeed, those advising them, to consider carefully before a dispute arises whether adjudication in accordance with the English statutory scheme should be included as part of their contractual arrangements. If they choose not to include such provisions, parties should reflect carefully on the options that they might wish to pursue in the event of a dispute, and on whether it might be preferable for those options to be expressly referred to in their contractual documents.
15. On or about 25 June 2024, ACSL issued a notice of adjudication in the sum of £196,399.89 comprising the overdue payment under Payment Notice 19, and the amount owing under the invoice dated 31 January 2024, together with the retentions. The Notice records that:
"Pursuant to the terms of the contract titled "Horizon" dated 06/07/2022 and further contract dated 13/09/2022 between Augres Landscapes and Legendre Construction Ltd, and in accordance with relevant adjudication procedures, this notice is to inform you that Augres Construction Supplies Ltd T/A Augres Landscapes hereby refers the following dispute to adjudication.
Nature of the Dispute -
The dispute concerns overdue payments for the following invoices to settle the final account. This has arisen from dispute over which contract terms apply and therefore which contract final price. We will provide evidence in referral document that Legendre at all times acted "as if" the latter contract were accepted and "as if" our pricing was agreed with written confirmations, as well as agreeing to variations to specification and drawings for a period spanning 18 months of works until the final two months of no-payment, no Payless notice and silence."
16. The reference to 6 July 2022 is to a date noted on the JCT Contract and that of 13 September 2022 appears to be to a further revised bill of quantities that was sent by ACSL to LCL on that date.
17. In July 2024, Mr Gracia was appointed adjudicator by RIBA, and the solicitors for LCL filed a Response to the Plaintiff's Notice (the "Response"). Amongst other things, the Response alleged that:
(i) the contractual arrangements between the parties were set out in the JCT Contract dated 6 July 2022; and
(ii) the Plaintiff had failed to meet its obligations under the contract such that the sums claimed by the Plaintiff were not due and owing and in fact there were contra charges owing to the Defendant from the Plaintiff.
18. On 30 August 2024, Mr Gracia issued his decision. It records that:
"5. This adjudication was undertaken following the provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1998 (As Amended) ("the Scheme").
6. Any references to "the Act" within this Decision refers to Pt Il the Housing Grants Construction and Regeneration Act 1996 as amended by the Local Democracy, Economic Development and Construction Act 2009 (unless stated otherwise).
7. The applicable terms of the contract entered into by the Parties are disputed although there is no dispute that a construction contract exists and that adjudication is available to the parties under the Scheme.
8. ACSL, was self-represented in these proceedings and LCL was represented by ARCHOR (solicitors) of Langham.
9. The submissions made by the parties and considered by me in reaching my Decision include:
a. The Referral dated 12th July 2024 and modified 16th July 2024 to narrative version PR 12 in order to remove references to privileged information within the bundle.
b. The Response by LCL, dated 23rd July 2024
c. The Reply by ACSL, dated 26th July 2024.
d. The Rejoinder by LCL dated 30th July 2024.
e. Comments received from the parties during the course of the adjudication including responses to my queries."
"49. PN 19 (already evaluated by LCL) is a constituent element of the account value claimed by ACSL.
50. There is then a balancing payment of a residual amount which on face value will only be ascertained during this adjudication
57. I find that this dispute is concerned with the differences between the party's respective final account projections and requires me to value the account on a true value basis as it stood at the time the dispute was referred."
20. Having identified the issue to be determined, Mr Gracia then proceeded to consider which documents "formed the basis of the Contract". At paragraphs 58 to 110 he sets out the parties' submissions and his analysis of the issues. In summary, he found that:
"100. Whilst in e mails LCL questioned the purpose of BoQ Rev J, it proceeded to adopt its principles and applied them in valuations thereafter.
101. ACSL has said in the Reply (un-numbered paragraph 3 of General Introduction) that rather than its conduct demonstrating its acceptance of LCL's JCT Terms it was LCL's conduct, in making payment against the provisions of BoQ Rev J, and accepting re-measurement of items over some 18 months that demonstrates acceptance by conduct.
102. On face value this appears to create an established course of dealings based upon the BoQ Terms, which only appears to have been questioned at the final account stage (although LCL denies this stage has been reached despite initiating in it).
108. Having sampled the previous valuations it is evident that in regard to the 24th November 2022 application, the 24th February 2023 application, the December 2023 application leading directly to LCL's issue of PN 19 etc. the provisions of the BoQ Terms were being followed.
109. Viewed objectively I consider this demonstrates an established course of dealings constituting acceptance of the BoQ Terms over a period of some 18 months.
110. I find that the ACSL BoQ Terms applied and not the JCT Terms as argued by LCL."
21. Mr Gracia then proceeded to consider the granular detail of the disputed items between the parties and concluded that £131,742.47 was due to ACSL from LCL. This sum also included the repayment of a retention on the basis that:
"229. The JCT Terms did not apply and there was no obligation on ACSL to allow retention to LCL and no right for LCL to deduct or retain it. It is a natural consequence of my findings that the retention should be returned."
22. In addition, Mr Gracia awarded interest on the monies owing in the sum of £6,564.46 together with daily interest at the rate of £30.11, calculated on the basis of the Late Payment of Commercial Debts (Interest) Act 1998, which is an English statute. He directed that payment should be made by LCL within 7 days and that ACSL should pay his fees in the first instance, and these should be reimbursed by LCL.
23. The Defendant did not pay any of the sums found to be due and owing by Mr Gracia. In September 2024, the Plaintiff issued a simple summons against the Defendant seeking payment of £179,177.02 comprising the contractual sum of £131,742.47 plus GST, together with interest and Mr Gracia's costs "under a contract titled Horizon dated 6 July 2022 entered into between the Plaintiff and the Defendant". That claim was disputed. The Plaintiff filed Particulars of Claim pleading that:
"4. The Defendant supplied the Plaintiff with a Work Order and Contract dated 6 July 2022 (the Sub-Contract) in relation to specialist landscaping services for the Project.
5. Pursuant to its Clause 1, the Sub-Contract consisted of inter alia - -
5.1. the Sub-Contract;
5.2. the Sub-Contract Particulars (the Particulars) and Schedule of Information; and
5.3. the JCT Design & Build Sub Contract Conditions DBSub/C 2011 Edition (the Conditions), incorporating the JCT Amendments stated in the Particulars and subject to any Schedule of Modifications; (the JCT Contract).
6. The JCT Contract, without its Conditions, was hand delivered to the Plaintiff on 16 August 2022. It was never agreed by the Plaintiff. However, the Plaintiff began works on 25 July 2022, following initial acquisition of materials for the works under a Letter of Intent dated 21 March 2022
17. In discussions with the Defendant, the Plaintiff indicated that it would be pursuing matters before the Royal Court of Jersey to recover sums due to it. The Defendant insisted that any dispute should be resolved by an adjudicator appointed by the Royal Institute of British Architects (RIBA) including on the basis that this formed part of the JCT Contract terms put forward by the Defendant in August 2022, but not agreed by the Plaintiff. The Defendant did not wish a Jersey based adjudicator to be appointed as it was concerned about potential bias. The Plaintiff in good faith reluctantly agreed with the Defendant's preferred course on the basis that, as the Defendant proposed it as an alternative to a Court process, the Defendant intended to be bound by it." (emphasis added)
24. In due course, LCL filed an Answer alleging that:
(i) the only basis upon which the adjudication could have been performed was that set out in the JCT Sub-Contract;
(ii) there was no ad-hoc agreement between the parties to adjudicate the dispute;
(iv) in determining that the JCT Contract was never agreed between the parties and that their contractual arrangements were founded on the Bill of Quantities, the adjudicator "destroyed the basis of his own jurisdiction";
(v) in fact, the JCT contract was binding on the parties but given this fundamental error, there should be a further adjudication;
(vi) further and/or alternatively, the Plaintiff is seeking to approbate the JCT Contract by taking the benefit of the adjudication provisions and to reprobate it by asserting that none of the other provisions are applicable.
25. Against that background, the Plaintiff applies for summary judgment.
26. Royal Court Rules 2004 ("RCR") 7/1 provides that:
27. As to the principles to be applied, in HRCKY Ltd v Hard Rock Ltd [2019] JCA 123, the Court held that:
(i) the referral to adjudication had been made under the terms of the JCT Contract (as evidenced by the introduction to the Adjudication Notice);
(ii) the adjudication had been for a limited purpose, namely pricing; and
(iii) that position was clearly understood by all parties. Indeed, the response from LCL's lawyers to his letter before action stated that:
"Your position in the Adjudication was always that the dispute had been referred to Mr Gracia in accordance with the JCT contract. In this regard we refer to the first paragraph of your Notice of Adjudication, wherein you referred to the 'terms of the contract titled Horizon dated 06/07/22; the same being the JCT Design and Build Sub-Contract Agreement 2011 as amended. Indeed, you appended a copy of the same to the Referral.
It was that JCT contract which provided the parties with a contractual right to adjudicate (specifically clause 8.2 of the conditions therein).
Your Referral also made numerous references to the JCT contract, including a reference to clause 6 of the same; specifically the requirement for party representatives to discuss any potential dispute. Indeed, you alleged that LCL was in breach of this clause.
It is clear therefore that, whilst it was your position that the Sub-Contract Sum was not agreed until after the issuance of the BOQ Rev J, it was always clearly your position that the JCT contract applied, save in respect of the Sub-Contract Sum set out therein.
Put simply, your Referral suggested that BoQ Rev J applied, but nowhere did you argue that the BoQ Rev J applied instead of the JCT contract (which is what Mr Gracia went on to decide). Rather you consistently referred to BoQ Rev J as a 'pricing document', with the JCT contract appended to the Referral as evidence of the underlying terms of the contract." (emphasis added)
29. Although complaining about the lack of clarity on the Plaintiff's case, the Defendant does not deny that the referral to adjudication was made under the JCT Contract; it is their primary case. Given that both parties are agreed the referral was made under the JCT Contract, I proceed on that basis as I can reasonably expect it to be agreed in the pleadings by the time of any trial.
30. Accordingly, the first and second paragraphs of the Defendant's defence to the claim (as set out in paragraph 24 above) are irrelevant. The issues at the heart of this application are whether there are any realistic prospects of LCL successfully defending these proceedings on the grounds that:
(i) firstly, Mr Gracia misconstrued the basis upon which he was adjudicating the dispute in that he applied the English statutory framework rather than that agreed between the parties under the JCT Contract;
(ii) secondly, when the adjudicator decided that the JCT was not binding, he destroyed the basis of his own jurisdiction; and
(iii) thirdly, the Plaintiff is approbating and reprobating.
31. In its Answer, LCL pleads that:
22 (1) At paragraph 5 of the Decision, the Adjudicator stated that "This adjudication was undertaken following the provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1998 (As Amended) (the Scheme)." In fact, save through Clause 8.2 of the Sub-Contract, the Scheme could not apply to the adjudication. In any case, Clause 8.2 made a number of modifications to the text of the Scheme.
(2) At paragraph 6 of the Decision, the Adjudicator referred to Part II of the Housing Grants, Construction and Regeneration Act 1996 (as amended). In fact, this legislation only applies to England, Wales and Scotland, and there is no comparable legislation in Jersey
(4) At paragraph 39 of the Decision, the Adjudicator referred to the "intent behind the original legislation". For the avoidance of doubt, there is no legislation providing for adjudication in Jersey
(7) At paragraph 242 of the Decision, the Adjudicator awarded interest under the Late Payment of Commercial Debts (Interest) Act 1998. This legislative provision is not a part of Jersey law
32 (4) The Adjudicator proceeded on the false basis that the English, Welsh and Scottish Scheme for Construction Contracts (England and Wales) Regulations 1998 (as amended) applied to the adjudication pursuant to section 108 of the English, Welsh and Scottish Housing Grants, Construction and Regeneration Act 1996.
32. In my judgment, whilst there were modifications to the statutory scheme under clause 8.2, none of those modifications are material for the purposes of this application.
33. Further, whilst Mr Gracia may have proceeded on the basis that he was applying the whole of English law as opposed to simply applying the Scheme, he was reflecting Master Thompson's views in Ductclean (UK) Limited that "as the parties have agreed by the Contract that these regulations should apply, I consider that I should follow the English jurisprudence interpreting such regulations". If he made any errors in so doing (for example in applying the English statute in relation to interest as opposed to the contractual rate or the rate applicable in Jersey), these were simple errors of fact or law which do not undermine the validity or enforceability of his decision. As the Court noted with approval in Carillion:
34. In my judgment, none of the errors pleaded by LCL in its Answer (and set out at paragraph 31 above) amount to Mr Gracia acting in excess of his jurisdiction. Mr Gracia carried out the adjudication under the Scheme; the fact that he did so as a result of an agreement between the parties, recorded in the JCT Contract, as opposed to a statutory requirement is irrelevant, and in my judgment, this aspect of LCL's defence has no realistic prospect of success.
35. I was referred to the English Court of Appeal's decision in Thomas-Fredric's (Construction) Ltd v Wilson [2003] EWCA Civ 1494 which concerned an application for enforcement of an adjudication in circumstances where there was a dispute as to the identity of the parties to the construction contract, and in order to proceed to make a decision, the adjudicator had to determine the identity of the contracting parties. It is a decision which is usually relied on as authority for the proposition that an adjudicator cannot determine their own jurisdiction, as set out by Simon Brown LJ at [33]:
36. In the present case, the issue of the adjudicator's jurisdiction was not a matter that was before Mr Gracia. As recorded at paragraph 57 of his decision (and set out in paragraph 19 above) he was tasked with determining the value of the account between the parties only. Jurisdiction was not in issue (as set out in paragraph 7 of his decision). Put simply:
(i) as the issue of jurisdiction was not referred to Mr Gracia, nothing that he decided can possibly impact on the question of jurisdiction. In Pilon Ltd v Breyer Group PLC [2010] EWHC 837:
(ii) if an adjudicator cannot confer jurisdiction on himself without the consent of the parties, neither can he divest himself of jurisdiction already given without their consent.
37. Nor was the issue now relied upon by the Defendant raised before Mr Gracia. In that regard, I think it of assistance to quote further from Thomas-Fredric's (Construction) Ltd v Wilson. At [23], Simon Brown LJ referred, with approval, to an extract from Project Consultancy Group v Trustees of the Gray Trust (1999) 65 ConLR 146 in which Dyson J noted that:
38. Contrary to the guidance given by Judge Gilliland and approved by the Court of Appeal in Thomas-Fredric's (Construction) Ltd v Wilson, LCL said nothing in their responses about jurisdiction. The submission now made was not made at the time of the adjudication, nor were the Plaintiff and/or Mr Gracia warned that this was a submission that the Defendant might take if the Plaintiff's case was accepted, notwithstanding that the Defendant was represented by English solicitors and ACSL were acting in person. Had it been raised at the time, the parties would have been able to consider it, and if so minded, to refine or to redefine the issues referred to Mr Gracia.
39. In my judgment, pursuant to the terms of the JCT Contract, ACSL and LCL agreed to submit their dispute as to the value of the account to an adjudicator and agreed to be bound by the award made. Having had that specific question adjudicated, LCL cannot now take the point that he lacked jurisdiction so to do whether on the basis of some infelicity of expression or factual error in the course of that determination. As the Court held in Carillion (at paragraph 9 above):
40. In this case, the interim solution was the payment of monies by LCL to ACSL. The fact that LCL disagree with Mr Gracia's decision and/or his reasoning is irrelevant. In my judgment, LCL has no realistic prospect of successfully defending ACSL's claim on this basis.
41. As part of its submissions, LCL submits that ACSL is approbating and reprobating in that it is seeking to rely on the decision of Mr Gracia whilst at the same time denying that the JCT Contract is binding.
42. In C. A. Banque Des Marchands De Moscou (Koupetschesky) v Kindersley [1951] Ch.113 the Court held that:
43. In my judgment:
(i) as was acknowledged by the Defendant's solicitors (at paragraph 28 above), ACSL did not argue that the JCT contract did not apply; rather it "consistently referred to BoQ Rev J as a 'pricing document', with the JCT contract appended to the Referral as evidence of the underlying terms of the contract";
(ii) ACSL is not seeking to resile from any election; its position which has been consistent throughout is that:
(a) the adjudication was carried out under the JCT Contract and the parties are bound by the outcome;
(b) Rev J to the Bill of Quantities provided the pricing structure which was to be applied between the parties;
(iii) nor is ACSL seeking to do anything inconsistent with the adjudication; quite the contrary; and
(iv) there is no substance to LCL's objection on this ground, nor does LCL have any realistic prospect of successfully defending the claim on this basis.
44. Having determined that there is no realistic prospect of LCL successfully defending these proceedings on the grounds pleaded, I grant summary judgment in favour of the Plaintiff.