Carillion Construction Ltd. v Stephen Andrew Smith [2011] EWHC 2910 (TCC)

[2011] EWHC 2910 (TCC)Case No HT-11-394
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 10 th November 2011
Before
MR JUSTICE AKENHEAD
Between
CARILLION CONSTRUCTION LIMITEDClaimantSTEPHEN ANDREW SMITHDefendant
Peter Fraser QC and Serena Cheng (instructed by Dickinson Dees) for ClaimantSimon Hargreaves QC and William Webb (instructed by Gard & Co) for DefendantHearing Hearing date: 26 October 2011
JUDGMENT
[1]Carillion Construction Ltd (“Carillion”) seeks by way of Part 8 proceedings declarations in relation to certain questions which have arisen out of its contractual relationship with Mr Stephen Smith or, alternatively, a company now struck off the Companies Register in September 2011, Underground Pipeline Ltd (”the Company”), formerly owned by him and his former wife. Some of these questions raise matters which can not be dealt with without oral evidence and I have set aside two days at the end of November 2011 for them to be dealt with. The issue which it is rightly agreed by the parties that I can and should deal with now on the basis of the written documentation before the Court is whether the Adjudicator in what is now the third adjudication brought by Mr Smith or his company has jurisdiction in relation to the dispute which has been referred to him; the essential issue on this point is whether or not this latest dispute referred to adjudication is in substance the same as the dispute referred eight years ago to adjudication and resolved by the Adjudicator in the second adjudication between the parties. Factual Background[2]The facts are based on the documentation put before the Court and are not intended to be binding in relation to the issues for which I have deferred the hearing at the end of November 2011.[3]Carillion (then trading as Crown House Engineering) was a mechanical and electrical contractor engaged by The Royal Liverpool & Broadgreen University Hospitals NHS Trust to carry out infrastructure refurbishment at Broadgreen Hospital in Liverpool. One of the McAlpine companies was also involved, amongst other things in relation to various ground and trench digging activities. It seems that by 2000 Mr Smith had a firm which traded as Underground Pipeline Services of which he was the sole proprietor and that the Company was also in existence (although there remain issues as to whether Mr Smith and his wife had become shareholders, directors and secretary before about November 2000 and as to whether he acted as an agent for the Company before then). Mr Smith was invited to tender for the supply, installation, testing and commissioning of underground water and gas pipeline systems for this project and he did so. Following a "Pre Sub-Contract Interview Meeting” dated 11 May 2000, Carillion sent an order dated 22 May 2000 addressed to "Underground Pipeline Services” instructing the recipient "to supply, install, test & commission the complete underground water & gas pipeline systems in accordance with" various documents. The order was expressed to be “subject to the terms and conditions contained within the Sub Contract Agreement attached". There is some suggestion on the face of the order that the sub-contract documentation was to be signed, sealed, initialled and returned by the recipient. I will refer to Mr Smith, the Company or the “Sub-Contractor” (as a more neutral term) as such where the context permits.[4]There is no dispute between the parties that whoever the Sub-Contract was between (that is either Mr Smith and Carillion or the Company and Carillion) not only was there a Sub-Contract but also that it incorporated those terms and conditions. Those terms and condition were of a relatively standard type. Carillion by Clause 5.2 was on a non-exclusive possession basis to make available parts of the site to provide such means of access as would be “necessary to enable the Sub-Contractor to execute the Sub-Contract works in accordance with the Sub-Contract”. The Sub-Contractor was required to proceed with the Sub-Contract Works with due diligence (having commenced) and without delay. The Second Schedule identified a 24 week period for carrying out and completing the Sub-Contract Works. Clause 6.5 in broad terms entitled the Sub-Contractor to extensions of time for delay caused by three reasons, factors entitling Carillion to extensions under its Main Contract, variations of the Sub-Contract Works and "any breach of this Sub-Contract by the Contract". There appears to have been no express provision to enable the Sub-Contractor to recover as such "loss and expense” caused by any such delay. It was certainly arguable that Clauses 8 and 9 which dealt with variations and their valuation might enable loss and expense caused by delay and disruption attributable to variations to be recoverable within the valuation process. Clause 15 dealt with payments which were to be on an interim basis initially followed by a final accounting process which was to take place pursuant to Clause 15.8 "not later than 3 months after practical completion of the Sub-Contract Works".[5]Clause 18.2 provided for adjudication: "The parties have the right to refer any dispute under the subcontract to Adjudication in accordance with the attached Adjudication Rules ORSA/CEDR current at the time of the dispute either party may give notice in writing to the other at any time of his intention to refer the dispute to Adjudication…” Clause 18.3A provided for arbitration as the final dispute resolution process. No point has been taken in this case that matters currently in court should be stayed to arbitration. The Adjudication Rules provided by Clause 4 that "the Adjudicator's decision shall be binding until the dispute is finally determined by…arbitration”; however Clause 30 provided that, if no notice of dissatisfaction with the Adjudicator's decision was given within 60 days of notification of the decision, “the decision of the Adjudicator shall be final and binding upon the parties".[6]The disclosed documentation reveals that monthly applications for payment were made by "Underground Pipeline Services". Such and other documentation until about November 2000 appears to have emanated from Mr Smith or his firm but in and after November 2000 it seems largely and possibly exclusively to have emanated from of the Company. Some or all payments were made to "Underground Pipeline Services" which, at least on the face of correspondence, appears to have been the trading name of the Company. Disclosed accounts for the company approved by the Directors including Mr Smith record that "on 1st November 2000, the company acquired the whole of the business of Underground Pipeline Services at its net book value of £110,122 from Mr S Smith…”[7]It is unexceptionable that, having commenced the Sub-Contract Works in or about mid-2000, the Sub-Contractor did not complete them within the 24 week period identified in the Sub-Contract. Indeed, the Sub-Contract Works were not apparently completed until 5 May 2001. There clearly was disagreement between it and Carillion as to the causes of the delay and the extent to which if at all there was any entitlement to extensions of time. Disputes also arose in relation to the valuation of the Sub-Contract Works.[8]The Company instituted the First Adjudication in May 2002 and a Mr Blizzard was appointed adjudicator ("the First Adjudicator"). I was not referred to much of the detailed documentation relating to the dispute which led up to this adjudication or indeed which was generated for the purposes of the adjudication. The decision issued on 2 August 2002 primarily addressed issues which had arisen on revised final accounts submitted by the Sub-Contractor in March 2002. The Notice of Adjudication and the Referral asked the First Adjudicator to: “1. Instruct [Carillion] to pay [the Sub-Contractor] all outstanding monies as set out in his Final Account submitted on 22nd March 2002 within 7 days. 2. Instruct [Carillion] to issue an extension of time to [the Sub-Contractor] from 27th October to 5th May 2001 inclusive. 3. Ascertain interest… [and alternatively] 1. Ascertain the value of the Final Account for the gas installation submitted on 15th March 2002. 2. Ascertain the value of the Final Account for the water installation submitted on 22nd March 2002. 3. Request the adjudicator to instruct [Carillion] to pay [the Sub-Contractor] all monies due within 7 days."[9]The First Adjudicator clearly analysed the final accounts and decided that, basically, the gas and water elements were worth £91,364.16 and £257,201.55 respectively. From the decision, it is clear that the final accounts also claimed head office overheads and profit calculated on the Hudson Formula, which is a time related method of ascertaining such heads of loss. However, the Sub-Contractor had deducted overheads and profit said to have been recovered through variations (which allow for overheads and profit). He recorded that the parties agreed that the Sub-Contractor was delayed and disrupted and that the Sub-Contractor had made it clear that the claim for overheads and profit "arises through the variation account under clauses 8 and 9 of the contract". Put another way, it seems that the Sub-Contractor was arguing that the claim did not arise as a claim for damages but through the provisions for valuation of variations. However, the parties are recorded in the decision as having apparently agreed that the First Adjudicator did not have jurisdiction to decide whether the Sub-Contractor was entitled to any extension short of 5 May 2001. Therefore, he could not decide any other date and he felt that he had "no alternative in this adjudication but to decide that I cannot instruct [Carillion] to issue an extension of time to [the Sub-Contractor] from 27 October 2005 May 2001 inclusive”. He therefore felt he had no alternative but to make no allowance for overheads and profit due to prolongation. He ultimately decided that, based on the final account figures resolved upon by him Carillion should pay the Sub-Contractor a net sum of £110,726.57 plus VAT and that Carillion should pay his fees. Carillion honoured this decision.[10]Following this, it seems that Mr Smith sought further payment particularly in relation to the delays to the Sub-Contract Works. To that end, he prepared a "Claim for Extension of Time and Claim for Loss and/or Expense at Broadgreen Hospital, Liverpool” dated 31 January 2003 (“The Second Adjudication Claim") which on that date the Company submitted to Carillion. Also at that time he submitted a Payment Application No 13 which claimed £62,140 for prolongation, £111,344.75 for disruption and £113,956.24 for overhead recovery. Additionally £12,200 was claimed for claim preparation costs.[11]It seems that this Second Adjudication Claim was rejected at least partly on the basis that Carillion considered that the Sub-Contractor was solely responsible for all the delay. This led to the institution of Adjudication No 2 by a letter dated 17 June 2003 from the Company to Carillion which was treated as a Notice of Adjudication:
“By your submission dated 28th April 2003 it appears that you hold [the Sub-Contractor] solely responsible for their extended time onsite… We must therefore state that due to the contents of your letter in your submission of 28th April 2003, and your ‘threats’ therein, we can only conclude that a dispute has existed since receipt of this letter and document. As it is apparent that we are unable to resolve this dispute amicably, we feel compelled to instigate adjudication proceedings in an effort to settle this account without further delay. By this referral notice, we have requested the Chartered Institute of Arbitrators… to appoint an adjudicator to carry out the following:- 1) Ascertain the value of [the Sub-Contractor’s] submission dated 31st of January 2003… 2) Ascertain the value of the interest on outstanding sums in accordance with the statutory entitlement. 3) Ascertain the date of completion of [the Sub-Contractor’s] works. 4) Instruct [Carillion] to award an extension of time for the extended contract period from 27th October 2000 to 6th May 2001 inclusive, or such other time as the adjudicator may ascertain. 5) Ascertain whether the submission of [Carillion] dated 28th 2003 and the contents therein constitute a valid notice of set off in accordance with the contract and ascertain the validity of the contents of the document submitted by [Carillion] dated 28th April 2003. 6) Instruct [Carillion] to pay all monies due to [the Sub-Contractor] within 28 days of his award…”
[12]Mr Siamak Soudager was appointed as the Adjudicator in the Second Adjudication. The Company was named as the Claimant in the Referral which followed a few days later but it went into some more detail than the earlier Notice of Adjudication, the relief claimed being however the same. There was a 33 paragraph "History of Events” supported by attached documents. This History averted to an alleged failure on the part of Carillion to award any extension of time and to "clear evidence that [the Sub-Contractor] did encounter disruption on site”. It asserted that due to the "actions/inactions" of Carillion the Sub-Contract Works were not carried out in accordance with the master programme (Paragraphs 39 and 40). The Referral goes on to challenge contra-charges raised by Carillion in relation to 22 weeks of supposedly culpable delay on the part of the Sub-Contractor. The Company sought payment of £380,589.53 as set out in the Second Adjudication Claim.[13]It is now necessary to turn to that Claim in some detail because a comparison between it and the Third Adjudication Claim will need to be made. The Second Adjudication Claim comprised a 43 page claim document accompanied by annexures which included the Sub-Contract, an April 2000 programme, "correspondence showing problems on the site i.e. delay and disruption etc”, as built programmes, signed contract log sheets and labour and plant analyses. The first chapter was entitled "Statement of Claim”:
“In accordance with the requirements of the Contract Conditions this submission, documents, [sic] details and quantifies the entitlement of [the Company] in regards to an Extension of Time and associated Prolongation and Disruption costs (loss and expense). This document confirms: 1) The total reliance that [the Company] had upon the timely provision of access/egress to the site in order to COMMENCE their works. 2) The total reliance that [the Company] had upon the timely provision of Trenches in order to PROGRESS their works. 3) The total reliance that [the Company] had upon the timely receipt of complete, accurate and finalised design information in order to COMPLETE their works. And then, in breach of such FUNDAMENTAL REQUIREMENTS: 1) The late completion of [Carillion’s] other preceding (trenching) contractors, which effectively restricted [the Company’s] areas of work. 2) The delay in the provision of the trenches thereby restricting/preventing [the Company’s] ability to effectively and economically progress the works. 3) The failure of the M&E Engineer to issue such critical design information in a timely and co-ordinated manner to suit [the Company’s] Construction Programme (i.e. changes in design of the gas and water mains). This document describes, despite their very best endeavour’s [sic], the total and unavoidable detrimental EFFECT of the aforementioned factors upon [the Company’s] ability to commence, progress and complete their works in a TIMELY, LOGICAL, CONTINUOUS and ECONOMIC manner. Such detrimental conditions imposed upon [the Company] THROUGHOUT the currency of works are described and evidenced within this submission by reference to correspondence, as-built programme information, Minutes of Meetings, Site Reports, Requests for Information, Site Letters and Site Instructions issued and revised drawings issued in connection with the work. The cumulative detrimental effect of such disruptive impositions has been to delay the critical progress of [the Company’s] work by a total of 26 WEEKS (on an original Contract Period of 24 weeks) for which an Extension of Time is required in accordance with the Conditions of Contract including, most notably, clause 6. Despite their very best endeavours to mitigate, the following costs have been unavoidably incurred by [the Company] as a direct effect of such adverse circumstances: £380,589.53…for which reimbursement is required by [the Company] in accordance with the subcontract Conditions, most notably, clause 8, 9 and 10. Note: …the disruption calculation incorporated as part of this claim assumes a particular level of certification (and therefore number of man hours recovered) in respect of the Final Account. This certification has been agreed through an Adjudication and the adjudicator’s decision dated 2nd August 2002…”
This document confirms:

And then, in breach of such FUNDAMENTAL REQUIREMENTS:

[14]There then followed an Introduction identifying the Parties, Scope of Works the Sub-Contract Agreement and the Construction Programme said to identify locations and durations for elements of the Sub-Contract Works. It was identified that Carillion had to “issue all information in accordance with” this Programme and to "ensure that all works required to be carried out by others were carried out to allow [the Company] to carry out its works in accordance" therewith, with the requisite excavation of trenches into which the gas and water mains were to be installed being highlighted. This Programme was said to confirm the “order, durations and interaction of [the Company’s] works divided over 14 items in 9 areas”; it added that “any deviation from this programme due to the failings of others will clearly not allow [the Company] to carry out their works on the most economical manner”. Paragraph 2.3.4 identified those parts of Clauses 6, 8 and 9 relied upon.[15]Chapter 3 of this Claim deals with “Actual Site Progress” from the pre-commencement period. Paragraph 3.1.2 deals with a delay in commencement attributable to another contractor having “not completed their preceding work (the excavation of the trenches)” and a complaint that Carillion “did not allow [the Company] to commence contract works until 22nd June 2000 in section 3”. Paragraph 3.1.3 is headed “Disruptions and Delays During the Installation of the Mains” and Paragraph 3.1.4 addresses “Delays encountered During Installation” at some length. Under Paragraph 3.1.5, complaint is made amongst other things that Carillion had failed to procure a new gas meter in Gas Main Sections 6 and 7.[16]Paragraph 3.2 addresses over 4 pages each of the 9 areas identified on the Programme and what delays and disruption occurred; this was supported by an “As-built Programme” attached to the Claim. For each area, the delay in commencement, the delay in completion and the number of visits, all being said to be substantially in excess of what the Sub-Contractor had a contractual right to expect. I will refer to some of the sub-paragraphs later in this judgment because they were often repeated verbatim in the Third Adjudication Claim (see below).[17]Chapter 4 deals with the “Costs Implications” and “confirms the loss and expense (prolongation, disruption and associated costs) incurred by the [Company] as a direct result of the “unacceptable conditions imposed by” Carillion. The delays were summarised in three tables for each of the nine areas of work with comparisons of Start and Completion Dates as well as Work Durations between that which was anticipated by the programme and the actual performance. There then followed seven pages of quotations from contemporaneous correspondence relating to notices given by the Sub-Contractor relating to delay and disruption, such correspondence being found in one of the annexures. At Page 32, the following was stated: “As indicated by the previous tables, all programme activities were DELAYED and DISRUPTED either by the aforementioned items or by the late provision of design information and/or the imposition of other miscellaneous factors. Testament to this are the signed contract log sheets (confirming the scope of work is being carried out) in Annexure F herein”.[18]There then follows details of the "time related costs incurred by" the Sub-Contractor a result of the 26 week late completion. This is split into "Staff and Supervision", "Site Facilities" and "Time Related Plant" with sums of £51,480, £9,360 and £1,300 claimed respectively. Paragraph 4.2 addresses "Disruption Costs”:
“Section 3.0 together with [the Company’s] contract log sheets included within Annexure F of this submission confirm and document the EXCEPTIONALLY ADVERSE CONDITIONS imposed upon [the Company] throughout the course of their works. Moreover, this detrimental climate was greatly exacerbated by the nature of the site. As conveyed within Section 3, herein the site was within a working hospital and bounded by roads/existing buildings. Thus, there were considerable access, storage, laydown restrictions - combined with the restriction of a relatively congested site and limited available work fronts. Hence the importance of effective planning and continuity for the construction of [the Company’s] work was of paramount importance. Once this plan was deviated from future the aforementioned imposed adverse conditions and their sudden adverse effects (site restriction, work on hold, late information, piecemeal and incomplete information), then [the Company’s] ability to continue the works in a continuous and economic manner became severely disrupted; This unacceptable situation is further confirmed by the as-built programme… which shows how all programme activities were literally stretched over a much longer period while [the Company] were literally forced to wait on site for the late completion of preceding trades (i.e. trench excavation, sand base infill, etc). The elongation of activities has been summarised by the following table which confirms the percentage increase in durations over which [the Company’s] activities were forced to be spread…”
There was then set out a table in relation to each of the nine areas with the percentage increases in duration ranging from 721% to 5100%.[19]The "Labour and Plant Construction Costs" were set out in Paragraph4.2.1 and were "submitted to compensate [the Company] for having to commence, progress and complete their works in a disrupted and uneconomic manner”. There was then set out a summary of actual direct "Labour Costs” and “Plant Costs" which were culled from Annexures G and H which purported to provide detail of all direct man hours and direct plant costs expended. This was then compared with the Labour and Plant which could said to have been recovered through payments already made by Carillion. The balance was then claimed. Paragraph 4.3 expressly identified that "non-productive overtime costs" had been included within the Labour Analysis section of the Final Account and had been “correctly adjusted for within the disruption calculation” within this Second Adjudication Claim. Paragraph 4.31 identified that a "Loss of Overheads" was also claimed on a Hudson Formula basis, albeit that credit is given for overheads recovered through the variation account already paid for. The Hudson Formula used was a method of identifying on a weekly or monthly basis what head office overheads had purportedly been lost by reason of a delay beyond the original contract period. In addition, at Paragraph 4.4 various "Associated Costs” were identified as being claimed including "Submission Preparation Costs involving a Mr Williams, said to be a claims consultant expert (£12,200) as well as finance charges on a compound interest basis (£7,074.28) and interest on outstanding monies (£73,874.26). The Costs were summarised at Paragraph 5: Ref Subject Total4.1 Prolongation Costs4.1.1 Staff/Supervision Costs4.1.2 Site Facilities4.1.3 Time Related Plant and Consumables 51,480.00 9,360.00 1,300.004.2 Disruption 4.2.1 Labour4.2.2 Plant 36,112.09 75,232.664.3 Delay Costs4.3.1 Delay Mitigation Sub-Total (1)4.3.2 Recovery of Overheads (Included in Labour) £173,484.75 113,956.244.4 Associated Costs4.4.1 Submission Preparation Costs4.4.2 Finance Charges on Additional Costs… SUB-TOTAL Finance Charges on outstanding balance… 12,200.00 7,074.28 306,715.27 73,874.26 TOTAL 380,589.53[20]Carillion submitted its detailed Response to the Referral on 2 July 2003. It was accompanied by six witness statements, extensive correspondence, labour allocation sheets and site diaries amongst other things. Apart from some jurisdictional challenges, Carillion denied that the Sub-Contractor was entitled to any extension of time and that the delays were attributable to a shortfall in labour and poor performance on its part. As to the loss and expense claim, Carillion asserted in Paragraphs 6.6 and 6.10 that it was only through Clauses 8 and 9 of the Sub-Contract that loss and expense for delay was recoverable. Additionally, Carillion forcefully argued that the Sub-Contractor had simply not substantiated or proved its loss and expense claim. Carillion also raised a counterclaim and set-off in relation to Contra-Charges.[21]By way of reply to this, the Sub-Contractor put in a 240 page response which challenged the witness statements in detail. There is a massive amount of detail in this. For instance, a detailed analysis of Carillion's labour allocation sheets and the site diaries was done and provided. Carillion submitted a response on 14 July 2003, to which the Company responded by way of letter on 24 July 2003.[22]The Second Adjudicator produced his decision on 28 August 2003. He identified that he had to decide whether the Company was entitled to the sum of £380,589.53 or any other sum or to an extension of time up to 6 May 2001 or any other time, whether Carillion was entitled to any sum in respect of Contra-charges and whether the Company was entitled to any monies in respect of interest. He set out what the parties argued and confirmed in dealing with the loss and expense claim that it was "accepted by the parties that the only mechanism for recovery of loss and/or expense is through clauses 8 and nine of the Contract" (Paragraph 33). Important findings in relation to the loss and expense claim were as follows:
“43. …It seems to me that [the Company] have not been able to distinguish the amount of losses (if any) allegedly incurred in each of the variations which could be attributed to the loss and/or expense rather than the items already recovered in the final account… 48. It is my view that the claim in respect of the loss and/or expense by [the Company] lacks particularisation. The assertions made by [the Company] are mostly on a general basis without proving the causal links which may persuade me that on the balance of probabilities loss and/or expense were incurred by [the Company] and that the loss and/or expense were as a direct result of breaches of Contract by [Carillion]… 50. Based on the submissions made and on the balance of probabilities, it seems likely that due to additional works and variations, regular progress of the Works had been delayed and disrupted. This in itself does not however prove that any direct loss and/or expense were incurred by [the Company] as a result. 51. Furthermore I am not convinced that the alleged loss and/or expense was not recovered through the variation mechanism in the first adjudication which dealt with … all the variations. [The Company] have not adduced persuasive evidence to establish that not all of the contents of the contract log documents were the subject of the adjudicator’s decision in 2002. 52. The burden of proof rests with [the Company] to establish that specific items of variations were in fact losses and/or expenses which were suffered by [the Company]. In my view [the Company] have not been able to establish which actual items of the variations were not allegedly recovered through the final account in the first adjudication. Having investigated the documentation, it appears that at the time of the previous adjudication no evidence existed to suggest that such an extensive amount of variations were outstanding in respect of the alleged loss and/or expense. Considering the extent of the claim, it is reasonable to have expected that some contemporaneous evidence should exist to indicate that the time of the currency of the Contract, loss and/or expense had been incurred by [the Company]… 54. The costs of the claim submitted by [the Company] are generally based on supposition… 58. Based on the evidence submitted by the parties, I am not persuaded that [the Company] suffered a downturn in turnover due to the delay in this particular project. I have no objection to using the formula method; however, I believe that in any event evidence of actual loss and expense is fundamental to its admissibility and proof of the case. 59. I am not convinced that as a matter of fact [the Company] suffered loss and somehow lost the opportunity the bidding for other specific project(s) or turned away other work(s) as a consequence of delay and of having resources tied up on the project in dispute. The evidence submitted by [the Company] is inconclusive. The claim must therefore fail. 60. In my opinion [the Company’s] claim is not apportioned to the matters of the instructions and variations. It appears that elements are included in [the Company’s] claim which clearly cannot be the responsibility of [Carillion], or in respect of which [the Company] have failed to comply with the Contract, since the claim is global in nature, it is impossible to sever the good from the bad. 61. For the reasons described above I therefore find that [the Company] are not entitled to any monies in respect of the alleged loss and/or expense purportedly arising from the variations. I dismiss the claim.”
[23]In relation to extension of time, he formed the view that the First Adjudicator did not decide the issue of extension of time (Paragraph 63). He found that extensive variations were carried out by the Sub-Contractor which entitled it to a fair and reasonable extension of time and that it was delayed "mainly due to additional works" (Paragraph 74). On the balance of probabilities he decided in Paragraph 74 and 75 that the subcontractor was entitled to an extension of time up until 5 May 2001 (which was the full period claimed). He rejected the Contra-charges claim or counterclaim. In his "Decision Summary" at Paragraph 93, he decided that:
“(a) [the Company] are not entitled to any monies in respect of their loss and/or expense claim. (b) [Carillion] shall grant an extension of time to [the Company] for the period of 27 October 2000 to 5 May 2001 the date [the Company] completed the Works…”
[24]It appears from company documentation filed by Carillion in evidence that the Company went into creditors’ liquidation in October 2004 and it was then decided that the companies should be placed in voluntary liquidation, with a Final Meeting being held on 20 May 2011. In late evidence filed by Mr Smith he has explained that he became impecunious, his marriage foundered and that eventually he put himself back on his feet and built up another successful business and more personal resources. He began working at some stage (he suggested earlier in 2011) to put together the very detailed claim that became the Third Adjudication Claim, to which I will refer below. The Company was finally struck off the register on 3 September 2011.[25]The Third Adjudication was initiated by a Notice of Adjudication served in September 2011; this adjudication however was brought by Mr Smith personally trading as Underground Pipeline Services. After referring to the earlier adjudications, he asserted that a number of documents had been withheld by Carillion during or before the Second Adjudication and that Carillion had misled the Adjudicators in both earlier adjudications (Paragraph 14). This appears to have been a reference to the extensive documents served with the Response some 8 weeks before the production of the Second Adjudicator’s decision in August 2003. It was asserted at Paragraph 18 that "this information could not have been included within the submissions of" the Company. Mr Smith continued:
“20. Based upon receipt of this new information UPS has reviewed its submissions and also the records and based upon this new information has been able to formulate its submission identifying causal effect due to the issues of delay and disruption to the work of UPS. 21. As was also noted in both the first and second Adjudications, both parties were in agreement that the mechanism of the recovery of any loss and or expense is through clauses 8 and 9 of the subcontract. Clause 8 deals with variations and what constitutes a variation and also clause 9 which deals with the valuation of the variation. 22. It is also common ground that it is for [Carillion] to properly value the variation…In this instance, all information to allow [Carillion] to value the works of this variation (the loss and expense variation) was within the possession of [Carillion] in 2001. Therefore the reason for this third Adjudication is the failure of [Carillion] to properly value this variation. 23. Due to this failing on the part of [Carillion], UPS have been forced to carry out this evaluation of the variation on behalf of [Carillion]. The evaluation of this variation (and substantiation and backup) is included in the files attached to the Referral Notice.”
There follows reference to what had happened earlier in 2011 leading up to the adjudication.[26]The financial claim is summarised in Paragraph 32 by reference to the account and supporting documentation sent on 9 May 2011, material parts of which are:
“Analysis of Labour & plant delay and disruption costs Labour 108,076.51 Plant 129,481.67 Prolongation Costs Staff/Supervision 57,446.93 Site Facilities 5,747.18 Time Related Plant Consumables 1,357.00 Associated Costs Costs to the investigation and submission of the claim on behalf of [Carillion] 320,896.00 Finance Charges 18,921.34”
In addition to this VAT and interest is claimed. The dispute was said to relate "to the non-payment of Application for Payment and accompanying documentation dated 9th May 2011 in full showing a value of £1,097,871.23” due to Mr Smith including VAT. Labour 108,076.51 Plant 129,481.67 Prolongation Costs Staff/Supervision 57,446.93 Site Facilities 5,747.18 Time Related Plant Consumables 1,357.00 Associated Costs Costs to the investigation and submission of the claim on behalf of [Carillion] 320,896.00 Finance Charges 18,921.34”

Costs to the investigation and submission

[27]Mr Blizzard, the adjudicator in the First Adjudication, was appointed as adjudicator in the Third Adjudication. The Referral in the Third Adjudication followed a few days later and is in much the same vein. At Paragraphs 30 and 32, Mr Smith stated:
“30. The contents of the latest submission are substantially different from the information provided in the second Adjudication. It is therefore the contention of UPS that this information (due to being given late in the proceedings of the second Adjudication) could not have been used in the formulation of the UPS documents in either of the first or second Adjudication, and therefore is the basis upon which a new, substantiated submission has been produced… 32. It is common ground that, in general terms, a point cannot be taken to Adjudication more than once. However, UPS consider that they are able to bring this third Adjudication as the information contained within this latest submission has never been Adjudicated [sic] upon before…[there then follows reference to the Quietfield case]”
It was asserted that the latest submission together with its accompanying documents was "substantially different from that advanced in the previous Adjudications." He continued at Paragraphs 36 and 37: “36. It is also of note that as the valuation of this work is based upon clauses 8 and 9 of the subcontract document, it is a variation that has yet to be valued. It is also an issue that has previously agreed, it is for [Carillion] properly value the works. Therefore their wording of the letter in that they "reject and refute" the previous UPS claim suggests that they had not carried out a proper evaluation of the delay and disruption caused to the UPS works. 37. UPS have therefore been required to carry out the formulation and evaluation of the claim for loss and expense on behalf of [Carillion] due to the failure to carry out this work. UPS therefore contends that in accordance with clauses 8 and 9 of the subcontract, the costs of this evaluation also now form part of the cost of the variation and have been included within the submission." This point is effectively repeated to the effect based on Clauses 8 and 9 that it was incumbent upon Carillion properly to value the work.[28]Paragraphs 82 and 83 identify the nature of the dispute as Mr Smith saw it: “82. The dispute or difference relates to the non-payment of sums due as set out in Application of Payment dated 9th May 2011…and accompanying documents by [Carillion] to [Mr Smith] with no contractual validity or reason for this money not be paid. 83. The dispute and/or difference occurred by [Carillion] failed [sic] to properly evaluate the loss and expense variation of UPS on or around 5th May 2001”.[29]Thus apart from a complaint that there was a failure to evaluate the May 2011 application of payment there is no express reference either in the Notice of Adjudication or in the Referral to other breaches of contract or to any entitlement to damages. There is however clearly a reference to the loss and expense claim document of May 2011, to which I will now turn.[30]Certain it is that the Third Adjudication Claim which emerged in May 2011 was a substantial opus. The prose part runs to 221 pages. It is accompanied by 24 appendices which include "Correspondence showing problems on the site, i.e. delay and disruption etc", “Delivery Notes/ Order for Hire Equipment/Cabins”, "Timesheets and Summary of Costs for Stephen Smith and Glyn Williams", at least five witness statements, correspondence concerning the issue of Programmes and other letters to clients declining work “due to existing commitments on the Broadgreen Hospital Contract”. There are nine tables which relate to comparisons of Start and Completion Dates, Work Durations and numbers of visits in each area as well as percentage increase in work durations, summaries of labour and plant under recovery, average and management input times and calculation of additional cost of management input. There are 27 files dealing with the nine areas of the site.[31]The Claim Document is prefaced with an Index which contains most of the paragraph headings contained in Adjudication Claim No 2. Like the earlier claim it is prefaced with a Statement of Claim, much of which involves a verbatim translation from the earlier Claim (old parts in italics): “1.0.1 In accordance with the requirements of the Contract Conditions this submission, documents, [sic] details and quantifies the entitlement of Stephen Smith T/A as Underground Pipeline Services in regards to a Prolongation and Disruption claimfor costs incurred loss and expense) based upon an entitlement derived from clause 8 of the Contract (also referred to as the "Loss and/or Expense Variation") for work carried out at Broadgreen Hospital, Liverpool. 1.0 .2 However, in the alternative, Stephen Smith T/A Underground Pipeline Services also considers that this claim can also be founded upon his common-law rights for the recovery of its costs incurred (also referred to as the "Loss and/or Expense Claim) for breach of contract on the part of [Carillion]. 1.03 This document confirms: 1) The total reliance that Underground Pipeline Services had upon the timely provision of access/egress to the site in order to commence their works. 2) The total reliance that Underground Pipeline Services had upon the timely provision of Trenches in order to progress their works. 3) The total reliance that Underground Pipeline Services had upon the timely receipt of complete, accurate and finalised design information in order to complete their works. 1.04 And then, in breach of such fundamental requirements: 1) The late completion of [Carillion’s] other preceding (groundworks) contractors, which effectively restricted ability of UPSto carry out the work identified in the Contract programme… 2) The delay in the provision of the trenches thereby restricting/preventing UPS’ ability to effectively and economically progress the works and requiring him to work in a piecemeal fashion in all the areas of the site. 3) The failure of [Carillion] to ensure that their ground works contractor carried out the excavation and backfilling of trenches in the correct manner and to the correct lines and levels and in accordance with the contract specification to enable the work of UPS to be carried out in accordance with the Contract Programme.. 4) The failure of the M&E Engineer to issue such critical design information in a timely and co-ordinated manner to suit the Construction Programme issued to Underground Pipeline Services (i.e. changes in design of the gas and water mains). 5) The failure of [Carillion] to provide programmes and details to Underground Pipeline Services to properly program and coordinate his work. 6) The failure of [Carillion] to accurately locate and deal with existing services prior to the commencement of the Underground Pipeline Services sub-contract therefore preventing and restricting Underground pipeline Services from effectively and economically programming, resourcing and carrying out his subcontract works in a timely manner and without substantial delays and disruption to his work. 7) The failure of [Carillion] to obtain instructions for preceding works to be carried out to allow Underground Pipeline Services to carry out their work in accordance with the subcontract Programme times and durations as set out therein. 1.0.5 This document describes, despite their very best endeavours, the total and unavoidable detrimental effect of the aforementioned breaches upon Underground Pipeline Service’s ability to commence, progress and complete their works in a timely, logical, continuous and economic manner. 1.0.6 Such detrimental conditions opposed upon Underground Pipeline Services throughout the currency of works are described and evidenced within this submission by reference to correspondence, as-built programme information, Minutes of Meetings, Site Reports, Requests for Information, Site Letters and Site Instructions issued and revised drawings issued in connection with the work. 1.07 The cumulative detrimental effect of such a disruptive impositions has been to delay the critical progress of Underground Pipeline Services work by a total of 27.14 [was 26] weeks (on an original Contract Period of 24 weeks) for which an Extension of Time has been granted in accordance with the Conditions of Contract including, most notably, clause 6. This gives a total revised contract period of 51.14 weeks (for the avoidance of doubt from 16 May 2000 to 5 May 2001). 1.08 Underground Pipeline Services have unavoidably incurred costs in consequence of [Carillion’s] failures totalling £1,097,871.23.Underground Pipeline Services seek reimbursement in accordance with the Contract Conditions (most notably clauses 8, 9 and 10) or in the alternative of damages in consequence of [Carillion’s] breaches.” 5) The failure of [Carillion] to provide programmes and details to Underground Pipeline Services to properly program and coordinate his work. 6) The failure of [Carillion] to accurately locate and deal with existing services prior to the commencement of the Underground Pipeline Services sub-contract therefore preventing and restricting Underground pipeline Services from effectively and economically programming, resourcing and carrying out his subcontract works in a timely manner and without substantial delays and disruption to his work. 7) The failure of [Carillion] to obtain instructions for preceding works to be carried out to allow Underground Pipeline Services to carry out their work in accordance with the subcontract Programme times and durations as set out therein.[32]Paragraphs2.1 (the Parties),2.2 (the Scope of Works) and2.3 (the Sub-Contract Agreement) were virtually identical to the similar paragraphs in the Second Adjudication Claim. Paragraph2.4 (Construction Programme) incorporated virtually verbatim the contents of Paragraph 2.3.1 of the Second Adjudication Claim albeit without there was some expansion and reference to a Scottish legal authority. Paragraph 2.6 (Access Restrictions) was substantially the same as equivalent Paragraph 2.3.3 of the Second Adjudication Claim. Paragraph 2.7 headed (Delay and Disruption) incorporates the same contractual terms as relied upon in the corresponding Paragraph 2.3.4 of the Second adjudication Claim but adds a reference to Clauses 5.2, 15.4 and 15.10.; Certainly implied terms are identified at Paragraph 2.7.2, not previously referred to. Paragraphs 2.7.4 to 2.7.8 refer to the Second Adjudication and the production of additional information.[33]Paragraph 2.8 of the Third Adjudication Claim was new and entitled "The Evaluation of the work of Underground Pipeline Services". It sets out an assertion that Carillion failed properly to value the works of the Sub-Contractor and that this failure amounted to a breach of contract on its part. Because Carillion failed to do this exercise, it is asserted, Underground Pipeline Services has now carried out this exercise on behalf of Carillion; it is asserted that, if Carillion had done what they should have done in this regard, the Sub-Contractor could have expected payment in 2002.[34]It was in the Section 3 that there has been, at least physically, the greatest expansion (compared with the Second Adjudication Claim) from some 10 pages in the earlier Claim to 156 pages in the later Claim, albeit that the sub-chapter headings remained the same except for the addition of sub-chapters 3.19 which deals with "the Causes of the Delays in Each Area" and 3.20 (Causes of Delay Summary). In Paragraph3.1 headed "The Orderly Progress of the Works", the previous wording (Paragraph 3.1 in the Second Adjudication Claim) is substantially repeated but there is an added assertion that based on documents received during the Second Adjudication, there was a change of programme not given to the Sub-Contractor; however it is asserted that, notwithstanding, the sequence and timingthe Sub-Contractor's work must have been based on this programme. These changes to the programme were either a variation or in the alternative a breach of contract by Carillion. Paragraph3.2 (entitled "The UPS Involvement in Planning Prior to Commencement") is essentially the same as the equivalent paragraph in the Second Adjudication Claim, much of it being a verbatim repeat.[35]It is primarily in the treatment of the nine separate areas of the site that there was a substantial expansion. I set out below the first three sub-paragraphs of Paragraphs 3.10 which deals with Area 1 “West Road CTC to South Road", with the differences between the Second and Third Adjudication Claims in italics:
“3.10.1 The programme…issued by [Carillion], on 11th May 2000 identified that the Underground Pipeline Services works in this area were to commence on 26th [was 22nd] May 2000 and be completed by 20th June 2000, with the works to be carried out in two operations. 3.10.2 However, on site, the works could not be carried out in this way. Works in this area actually commenced on 18th May [was 20the June] 2000 some 8 days earlier than anticipated. Completion of this area and all disruption associated with this area, should have been achieved on 20th June 2000. Actual completion was achieved on 26th [was 15th] March 2001, a total of 268 [was 268] days later than originally programmed. The works themselves were carried out in 21 [was 12] visits and works were carried out in this area in a total of 33 [was 20] days. The contract works were only able to be carried out on two or more consecutive days on four [was 2] occasions, variations instructed in this area also delayed and disrupted the works and last, variations were carried out on 9 [was 10] days, again having a disruptive effect on the works of Underground Pipeline Services. 3.10.3 The reasons for the work being carried out on a piecemeal basis was mainly due to the lack of trench excavation having been carried out by the groundwork sub-contractor of the main contract, McAlpine.”
The next 20 paragraphs and 7 pages then go into a factual and historical explanation of what happened between commencement and completion of the Sub-Contractor's work on this part of the site.[36]This pattern is repeated for each of the other 8 areas over the following 90 pages of the Third Adjudication Claim. That the exercise involved a "cut and paste" operation is indicated in Paragraph 311.1 dealing with Area 2 in which the opening words "Again the works in this section were severely disputed [sic]" is an exact translation from the Second Adjudication Claim (Paragraph 3.2.2), in which the word "disputed” is used is although it is obviously that the word "disrupted" was intended.[37]Paragraph 3.19 of the Third Adjudication Claim entitled "The Causes of the Delays in Each Area" seems to involve (as suggested in Paragraph 3.19.7) and “a review of the delays encountered during the currency of the sub contract works and the reasons for the delay is given by [Carillion] and McAlpine in the McAlpine/[Carillion] Progress Reports, Carillion Site Diaries [Carillion]/McAlpine late Instructions and [Carillion]/McAlpine Correspondence." This exercise apparently stems from the new information and documentation made available during the Second Adjudication and seems to involve copious verbatim quotations from various of such documents. It is unclear whether the contents of this chapter which runs to 42 pages are intended to represent Mr Smith's case on delay or simply provide some evidential support.[38]Paragraph 3.20 entitled "Causes of Delay Summary" reverts to identifying the lack of availability of trenches as the or a primary cause of delay added to changes to the timing, sequence and execution of the Sub-Contract works. There is reference to a witness statement used in the First or Second Adjudication being incorrect.[39]Chapter 4 goes on to address Cost Implications. The first three paragraphs are same as contained in the Second Adjudication Claim, except the third paragraph is somewhat different:
“The following Section 4.0 sets out the costs claimed as being due directly to the Variation (the "Loss and Expense" Variation) which identifies the costs incurred by UPS for the prolongation, disruption and associated costs incurred by Underground Pipeline Services as a direct result of the variation, or in the alternative due to the breaches of contract of [Carillion]. The Second Adjudication Claim stated: “The following Section 4.0 confirmed the loss and expense (prolongation, disruption and associated costs) incurred by UPS as a direct result of such unacceptable conditions imposed by [Carillion].”
[40]As before, there were then set out Tables comparing start and completion dates work durations and percentage increases in work durations. There is an added table identifying a comparison of visits to each area, actual compared with anticipated. Paragraph 4.2 then goes on to address Delay and Disruption costs and Paragraphs 4.2.1 to 4.2.6 are an almost exact verbatim repetition of Paragraph 4.2 of the Second Adjudication Claim.[41]When the Third Adjudication Claim moves on to Labour and Plant Disruption Costs at Paragraph 4.3, although the first two paragraphs are identical to those at Paragraph 4.2.1 of the Second Adjudication Claim, there is then a different approach to the quantification of what is to be claimed for disruption. This essentially involves looking at what happened on each day and the extent to which on each day labour and plant were underutilised, it is said, as a result of the delaying and disruptive events outside the control of the Sub-Contractor. Essentially what has been done is to analyse each day’s work and to seek to quantify non-productive or abortive time attributable to the disruption and the factors said to be the fault or responsibility of Carillion. Account is taken of what the Sub-Contractor was paid to identify, purportedly, where there has been over and under recovery of money. There are numerous files, calculations and workings which support these calculations to produce unrecovered labour and plant costs relating to each area of the site.[42]Paragraph 4.5 deals with Prolongation Costs. There is as before a staff and supervision costs claim totalling £57,446.93 in relation to the four people (Messrs Smith, Stoakes, Warrington and Ganley) originally claimed for in the Second Adjudication Claim. The differences are attributable to a much higher rate being used by Mr Smith than before and lower rates being used to Mr Warrington and Mr Ganley and to different delay periods, more for Mr Smith and Mr Warrington and less for Mr Stoakes and Mr Ganley. There is a similar site facilities claim as before although two items are abandoned and an additional one added with less time being claimed than before and with different rates being used. There is a very similar Time Related Plant claim.[43]Paragraph 4.9 deals with delay mitigation costs and is identical to Paragraph 4.3 of the Second Adjudication Claims. There is a Loss of Overheads claim in Paragraph 4.10 but it is not claimed on a Hudson Formula basis. What Mr Smith has done however is to incorporate overheads in the rates used for the under recovery of labour and plant (see Paragraph 4.10.5).[44]Paragraphs 4.11 to 4.14 claim associated costs including the costs investigation of the claim with Mr Smith’s and Mr Williams’ time being costed at a total of £320,896. It is unclear from the Court bundles whether any of the time claimed for relates back to 2002 or 2003. There is also a claim for financing charges on some of the base costs for one year, which presumably relates back to 2000 and 2001. Additionally there is a substantial interest claim from March 2002 to May 2011, quantified at £331,343.54.[45]Paragraph 5.0 provides the Cost Summary:
“Ref Subject Total 4.4 Analysis of Labour and Plant Delay 4.4.1 Labour 108,076.51 4.4.2 Plant 129,481.67 4.5 Prolongation Costs 4.6 Staff/Supervision 57,446.93 4.7 Site Facilities 5,747.18 4.8 Time Related Plant Consumables 1,357.00 4.9 Delay Costs 4.9.1 Delay Mitigation Included in Disruption Costs Sub-Total 302,109.29 4.11 Associated Costs 4.12 Costs for the Investigation and Submission of the Claim 320,896.00 4.13 Finance Charges on Additional Costs 18,921.34 Sub-Total 641,926.63 VAT (641,926.63 - 18,921.34) = £623,005.29@ 20% 124,601.06 Sub-Total 766,527.69 Interest accruing on £302,109.29 from 22nd March 2002 4.4.1 Labour 108,076.51 4.4.2 Plant 129,481.67 4.6 Staff/Supervision 57,446.93 4.7 Site Facilities 5,747.18 4.8 Time Related Plant Consumables 1,357.00 4.9.1 Delay Mitigation Included in Disruption Costs Sub-Total 302,109.29 4.12 Costs for the Investigation and Submission of the Claim 320,896.00 4.13 Finance Charges on Additional Costs 18,921.34 Sub-Total 641,926.63 VAT (641,926.63 - 18,921.34) = £623,005.29@ 20% 124,601.06 Sub-Total 766,527.69 to 9th May 2011 @ 12% pa 331,343.54 TOTAL AMOUNT DUE (AS AT 9TH MAY 2011) £1,097,871.23”
The Law[46]The Court of Appeal decision in Quietfield Ltd v Vascroft Construction Ltd [2006] EWCA Civ 1737 addressed the issue of what are sometimes called serial adjudications and how courts and adjudicators should deal with issues and disputes which may already have been dealt with by previous adjudicators. This was a case in which the contractor had instituted an adjudication in relation to its extension of time applications dated 2 September 2004 and 22 April 2005 for extensions until 9 June 2005 and 23 September 2005 respectively; the adjudicator in the first adjudication found that the delay had not been proved and therefore there was no entitlement to an extension of time. The employer later started an adjudication claiming liquidated damages for the delay and was met by a defence based on an Appendix C which was “a bulky document [spanning almost 400 pages [and setting] out numerous causes of delay. It also traces the dominant critical path [and analysed] the delay to completion which was caused by each of the relevant events. Appendix C included a number of bar charts, which(a) set out Vascroft's planned and actual programme and(b) trace the inter-relationship between the different activities on site and the various causes of delay." The Court was of the view that “Appendix C in the third adjudication identified a number of causes of delay which did not feature in the two letters and was substantially different from the claims for extension of time which were advanced.”The Court quoted with approval parts of the judgment of Mr Justice Jackson at first instance (reported at 2006 EWHC 174 (TCC) : “(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. (ii) If the contractor makes successive applications for extension of time on the same grounds, the architect or contract administrator will, no doubt, reiterate his original decision. The aggrieved party cannot refer this matter to successive adjudications. He is debarred from doing so by paragraphs 9 and 23 of the Scheme and section 108(3) of the 1996 Act. (iii) Subject to paragraph (iv) below, where the contractor is resisting a claim for liquidated and ascertained damages in respect of delay, pursued in adjudication proceedings, the contractor may rely by way of defence upon his entitlement to an extension of time. (iv) However, the contractor cannot rely by way of defence in adjudication proceedings upon an alleged entitlement to extension of time which has been considered and rejected in a previous adjudication."

Lord Justice May said:

“31. Section 108(3) of the 1996 Act and paragraph 23 of the Scheme provide for the temporary binding finality of an adjudicator's decision. More than one adjudication is permissible, provided a second adjudicator is not asked to decide again that which the first adjudicator has already decided. Indeed paragraph 9(2) of the Scheme obliges an adjudicator to resign where the dispute is the same or substantially the same as one which has previously been referred to adjudication and a decision has been taken in that adjudication. 32. So the question in each case is, what did the first adjudicator decide? The first source of the answer to that question will be the actual decision of the first adjudicator. In the present appeal, Mr Holt did not even take us to the first adjudicator's decision, although he was invited more than once by the court to do so. He was conscious, no doubt, that it would show, as it does, that the decision was limited to the grounds for extension of time in the two letters. 33. The scope of an adjudicator's decision will, of course, normally be defined by the scope of the dispute that was referred for adjudication. This is the plain expectation to be derived from section 108 of the 1996 Act and paragraphs 9(2) and 23 of the Scheme. That is also the plain expectation of paragraph 9(4) of the Scheme, which refers to a dispute which varies significantly from the dispute referred to the adjudicator in the referral notice and which for that reason he is not competent to decide. There may of course be some flexibility, in that the scope of a dispute referred for adjudication might by agreement be varied in the course of the adjudication.”
He also went on to say at Paragraph 30 that the first instance judgement was rightly decided for the right reasons[48]Both Lord Justices May and Dyson considered that one needed to consider whether a dispute referred to a later adjudication was significantly or in substance different from one which had been adjudicated upon earlier. For instance, Dyson LJ (as he then was) said:44. There are obvious differences between successive applications for extensions of time under the contract and successive referrals of disputes to adjudication. In the real world, there is often a regular dialogue between contractor and architect in relation to issues arising from clause 25. If an architect rejects an application for an extension of time pointing out a deficiency in the application which the contractor subsequently makes good, it would be absurd if the architect could not grant the application if he now thought that it was justified. To do so would be part of the architect's ordinary function of administering the contract. But referrals to adjudication raise different considerations. The cost of a referral can be substantial. No doubt that is one of the reasons why the statutory scheme protects respondents from successive referrals to adjudication of what is substantially the same dispute.45. Paragraph 9(2) [of the Scheme] provides that an adjudicator must resign where the dispute is the same or substantially the same as one which has previously been referred to adjudication and a decision has been taken in that adjudication. It must necessarily follow that the parties may not refer a dispute to adjudication in such circumstances.46. This is the mechanism that has been adopted to protect respondents from having to face the expense and trouble of successive adjudications on the same or substantially the same dispute. There is an analogy here, albeit an imperfect one, with the rules developed by the common law to prevent successive litigation over the same matter: see the discussion about Henderson v Henderson (1843) 3 Hare 100 abuse of process and cause of action and issue estoppel by Lord Bingham of Cornhill in Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1, 30H-31G.47. Whether dispute A is substantially the same as dispute B is a question of fact and degree. If the contractor identifies the same Relevant Event in successive applications for extensions of time, but gives different particulars of its expected effects, the differences may or may not be sufficient to lead to the conclusion that the two disputes are not substantially the same. All the more so if the particulars of expected effects are the same, but the evidence by which the contractor seeks to prove them is different. 48. Where the only difference between disputes arising from the rejection of two successive applications for an extension of time is that the later application makes good shortcomings of the earlier application, an adjudicator will usually have little difficulty in deciding that the two disputes are substantially the same. 49. In the present case, I am in no doubt that the judge reached the right conclusion. The first disputed claim which was the subject of the first adjudication was substantially different from the second disputed claim. The written notices which formed the basis of the second claim identified Relevant Events which were substantially more extensive than those which formed the basis of the first claim. The particulars of expected effects were very different too. There will be some borderline cases where it is a matter of judgment whether the two claims are substantially the same and where there may be room for more than one view. In my view, this is not a borderline case.”[49]There is no reason to consider any departure from this approach and to be fair to Counsel neither has sought to argue otherwise. Mr Justice Coulson correctly summarised the principles as follows in Benfield Construction Ltd v Trudson (Hatton) Ltd [2008] EWHC 2333 (TCC) at Paragraph 33:
“(a) The parties are bound by the decision of an adjudicator on a dispute or difference until it is finally determined by court or arbitration proceedings or by an agreement made subsequently by the parties. (b) The parties cannot seek a further decision by an adjudicator on a dispute or difference if that dispute or difference has already been the subject of a decision by an adjudicator. (c) The extent to which a decision or a dispute is binding will depend on an analysis of the terms, scope and extent of the dispute or difference referred to adjudication and the terms, scope and extent of the decision made by the adjudicator. In order to do this the approach has to be to ask whether the dispute or difference is the same or substantially the same as the relevant dispute or difference and whether the adjudicator has decided a dispute or difference which is the same or fundamentally the same as the relevant dispute or difference. (e) The approach must involve not only the same but also substantially the same dispute or difference. This is because disputes or differences encompass a wide range of factual and legal issues. If there had to be complete identity of factual and legal issues then the ability to readjudicate what was in substance the same dispute or difference would deprive clause 39A.7.1 of its intended purpose. (f) Whether one dispute is substantially the same as another dispute is a question of fact and degree.”
The Proceedings[50]The Third Adjudication being well underway and the Adjudicator not being minded to step down on jurisdictional grounds, including on the issue as to whether or not the Third Adjudication involved the referral of substantially the same dispute as that addressed in the earlier adjudications, Carillion issued its Part 8 proceedings in the TCC on 3 October 2011. The Claim Form raised effectively three primary issues, the first two relating to whether in effect the Sub-Contract was or became a contract between the Company and Carillion, either originally, by novation or by estoppel and whether the Sub-Contract between the parties was effectively under seal or to be treated as if it was under seal and consequently whether the limitation period has expired. The third issue is essentially what this judgement addresses. I made it clear that the first two issues seemed to raise issues of fact which could only be resolved by the hearing of evidence and the provision of document disclosure and, it was ultimately agreed, with appropriate directions being given, that the first two issues should be dealt with at a trial at the end of November, 2011.[51]Essentially on this third issue, Carillion and Mr Smith through their Counsel argued with force respectively that the referred dispute in the Third Adjudication was and was not the same or substantially the same as that addressed and referred, primarily, in the Second Adjudication. This involved a detailed consideration of what was referred and addressed in both Adjudications and there was copious reference to documentation within the 10 lever arch files put before the Court. It is unnecessary for me to set out in any detail here what those arguments were because I address them in the Discussion below.[52]Notwithstanding an agreement at least partly encouraged by the Court to the effect that the Third Adjudicator should defer his decision so that at least potentially some expense might be saved, the Third Adjudicator, who was not bound by this agreement, saw fit to issue his decision on 31 October 2011. I have looked at it briefly but make no comment as I have heard no submissions about it and the parties have not asked me to defer this judgement. For reasons which doubtless he thought right, he decided that there was about 80% of the £1m plus claimed due to Mr Smith. Discussion[53]As a preface, I should point out that no point is taken on behalf of Mr Smith in the context of the issue with which this judgement deals that the First and Second Adjudication was initiated by the Company and the Third Adjudication was initiated by him personally.[54]One needs to be aware that any given dispute may involve only one issue or numerous issues. Examples of a single issue might include the meaning of a particular sub-clause in a contract or the valuation of a single item of work. Examples of a multi-faceted dispute could include a final account which throws up numerous valuation or liability issues or an extension of time relating to a number of different alleged causes of delay. However, a given dispute may not be fully defined prior to its crystallisation. An example of this might be where a contractor submits a claim which is either not responded to for weeks or is simply rejected on a non-admission basis. What is really needed in the analysis of the scope of a given dispute is the determination of its ambit. In the context of adjudication, the starting point for this exercise will often be the Notice of Adjudication and the Referral documents, although one can of course look at the period leading up to this stage to assist in the definition of the dispute. However, one must also be able to consider the issues raised within the adjudication proceedings in this regard. A good example would be where the causes of the dispute have not been articulated by the defending party until the adjudication is underway; for instance, on a valuation dispute, the defending party identifies in the adjudication numerous reasons, never articulated before, why no sum is due.[55]When one is comparing disputes referred to adjudication in successive adjudications, one needs to look at the substance and essence of each dispute which has been referred. Each party to a contract, which contains an adjudication agreement either expressly or by statutory incorporation, has a right to expect that it can have any given dispute referred to and resolved by adjudication; it has no right to expect that it can have essentially the same dispute referred to adjudication more than once. Apart from the authorities supporting this proposition (primarily Quietfield and Benfield), the logic is obvious in commercial terms: serial or repeat adjudications on what is essentially the same dispute can cost an enormous amount of money, time and management resource and can be used as a tactical weapon which was never intended when the Housing Grants, Construction and Regeneration Act 1996 came into force. It is not as if the party which has failed on an earlier adjudication has no remedy, generally; it will have the remedy, usually of arbitration or litigation, to secure a final resolution of its dispute. It is likely in this case that the costs occasioned by the Third Adjudication for instance will easily exceed £100,000; the Third Adjudicator’s fees alone are said to be over £60,000 and Carillion at least was legally represented. One must also bear in mind that adjudicators usually have no right to decide their own jurisdiction and, as here, adjudicators will have no time to do the sort of detailed analysis which the parties and the Court have done into the overlap between the Second and Third Adjudications. It has taken this judge some 40 hours to analyse it and produce a reasoned judgement on it. The Third Adjudicator has simply assumed that there is no overlap.[56]In my judgement, the following factors, amongst others, can be deployed in considering whether the same or substantially the same dispute has been referred to or resolved in an earlier adjudication:(a) One needs to consider what is and was the ambit and scope of the disputed claims which is being and was referred to adjudication. That of course will vary from dispute to dispute. One has however to take a reasonably broad brush approach in determining what the referred claims were. The reason for this is to avoid repeat references to adjudication of what is essentially the same dispute.(b) The fact that different or additional evidence, be it witness, expert or documentary, over and above what was relied upon in the earlier adjudication, is deployed in the later claim to be referred to a second or later adjudication, will not usually alter what the essential dispute is or has been. The reason is that evidence alone does not generally alter what is the essential dispute between the parties. One needs to differentiate between the essential dispute and the evidence required to support or undermine one party’s or the other’s case or defence.(c) The fact that different or additional arguments to support or enhance a claiming party’s position are deployed in the later adjudication will not usually of itself mean that it is a different dispute to that which was referred earlier. Again, the reason is that different or even better arguments that are deployed in a later adjudication do not usually create an essentially different dispute. (4) The fact that the quantum is different or is claimed on a different quantification basis in the later reference to adjudication from that claimed in the earlier adjudication is not necessarily a pointer to the referred disputes being in substance different. If for example in Adjudication A the referring party claims for the value of 100 m³ of supplying and installing concrete, £20,000, at a rate of £200 per cubic metre, a claim for the same concrete work on a time plus materials basis in Adjudication B is essentially the same claim, albeit put on a different basis. There is nothing to stop the referring party in the subsequent arbitration or litigation claiming on each alternate basis but the claim is a claim for payment for the supply and installation of concrete. (5) One should be particularly cautious about being over-awed in the exercise of comparison of two sets of documents purporting to set out the disputed claims for two adjudications by the amount or bulk of the detail, evidence, analysis, submissions or annexures attached to either. (6) It is legitimate to look at the expressed motivation by the party in the later adjudication for bringing it and the given reasons for the basis of formulation of the later adjudication claim. (7) One must bear in mind that Notices of Adjudication and Referral Notices are not required to be in any specific form; they may be more or less detailed and they may or may not be drafted by people with legal expertise. They do not need to be interpreted as if they were contracts, pleadings or statutes. (8) One strong pointer as to whether disputes are substantially the same is whether essentially the same causes of action are relied upon in the earlier and later Notices of Adjudication and Referral Notices. One must bear in mind that one dispute (like one Claim in Court proceedings) may encompass more than one cause of action.[57]Although the analogy to issue estoppel or res judicata is an imperfect one when considering serial or repeat adjudications, it can provide some assistance in helping determine whether the same or substantially the same dispute referred to a later adjudication has already been subjected to an earlier adjudication. If X, a builder, sues his employer Y for what is said to be a contractual debt for concrete work, but fails in his proceedings because it has not proved his case on, say, quantum, X will be unable, at least usually, to sue Y again for the same because different arguments, evidence or quantifications can be deployed; one would say that X’s cause or right of action remains the same as in the earlier proceeding which had effectively disposed of the issues between the parties in this regard; it may well be different if X has another claim for payment for unpaid brickwork.[58]I have formed a very clear view that essentially the dispute referred by Mr Smith in the Third Adjudication is the same or substantially the same as that referred in the Second Adjudication. I start with the comparison, already largely set out above at Paragraphs 30 to 45 above, which demonstrates a close affinity between the Second and Third Adjudication Claims. Each involved a claim for delay and disruption based loss and expense relating to extensive delays and disruption said to have been caused by breaches of contract and default on the part of Carillion. The financial heads of claim are the same, albeit the figures are different. The period up to which delay and disruption runs is the same.[59]The fact that the Third Adjudication Claim is expressed to be largely based upon an analysis of substantial quantities of documents said to have been produced for the first time during the Second Adjudication explains why the Third Adjudication Claim in physical terms dwarfs the Second Adjudication Claim. However, the fact that such documentation has now been apparently analysed for the purposes of the Third Adjudication Claim does not of itself convert the dispute referred to in the Third Adjudication into a different dispute. Mr Smith, in his Notice of Adjudication, his Referral Notice and, indeed, in the Third Adjudication Claim itself, has been reasonably frank that the production of extensive documentation by Carillion during the Second Adjudication proceedings led to the way in which the Third Adjudication Claim has been formulated. In a sense, although I do not mean this pejoratively, it is this explanation that at least partly "gives the lie" to the Third Adjudication Claim being essentially different to the Second Adjudication Claim. It is apposite to point out that Mr Smith and his Company had a substantial time in possession of the documentation upon which he now relies in the Third Adjudication Claim before the conclusion of the Second Adjudication: it was served on or about 2 July 2003 and it was not until 28 August 2003 that the Second Adjudicator delivered his decision. Additionally, it is absolutely clear that in fact Mr Smith in his reply in the Second Adjudication considered extensively (to the tune of 240 pages’ worth) Carillion’s response and attached documentation. It cannot therefore be said that he did not have and largely take the opportunity to challenge and react and respond to this further documentation back in 2003 during the Second Adjudication.[60]I now return to the major differences said to exist between the Second and Third Adjudication Claims. The first relied upon by Counsel for Mr Smith is that only in the Third Adjudication Claim does he raise a claim or complaint about Carillion’s alleged failure to value his or the Company’s claim either back in 2001 to 2003 or in May 2011 when the Third Adjudication Claim was presented. In my view, this does not give rise to any substantive or substantial difference. If X or Mr Smith claims from Y or Carillion the basic loss and expense in 2002 or 2003 and fails to recover it in the subsequent adjudication, it can not come back and say that there is a new dispute arising out of a failure or breach of contract on the part of Y or Carillion to carry out the valuation exercise which would or might have led to a payment of that self same loss and expense. It is either not a separate entitlement or, at best, it is simply another way of claiming exactly what was being or could have been claimed before. It is in substance no different. For what it was worth, this basis of claim could just as well have been put forward in 2003 by Mr Smith or his Company. In so far as Mr Smith raises a complaint that Carillion in breach of contract failed to value the Third Adjudication Claim, that is simply parasitic upon the basic entitlement to which that supposed valuation relates. Therefore, if the Third Adjudication Claim is basically what in substance was the subject matter of the Second Adjudication, the complaint of failure to evaluate adds nothing of substance.[61]Next, Counsel for Mr Smith points to the fact that, in the Third Adjudication Claim, there is a clearly expressed reliance upon breaches of contract (relating for instance to lack of availability of trenches and the late provision of information) and a claim for consequential damages flowing from these breaches; it is said that there is no such claim within the Second Adjudication Claim. I do not consider that this is a good point for the following reasons:(a) The Second Adjudication Claim is expressly based in the "Statement of Claim" on what are said to be breaches of specific "Fundamental Requirements"; in context those are clearly contractual requirements. There is expressed reliance on Clause 6.5 of the Sub-Contract which relates to extension of time for "any breach of this Sub-Contract by the contractor”. Although this Claim is not like a pleading in legal proceedings, properly read and understood, it is or includes a claim for breaches of contract.(b) Whilst the word "damages" is not used in the Second Adjudication Claim, what is undoubtedly claimed are delay, disruption and associated costs caused by the breaches of contract relied upon. One also has to look at this in the context that it is and apparently was common ground that there is no express entitlement within the Sub-Contract to "loss and expense", as such, unlike in many standard building contracts. Although the Statement of Claim claimed reimbursement "in accordance with the Sub-Contract Conditions, most notably, clause 8, 9 and 10", no explanation is given as to the mechanics of this. When it comes to the evaluation, no attempt is made to value any variations as such (which is what clauses 8 and 9 are about) but simply to claim costs and losses caused by the alleged defaults of Carillion. It looks on its face remarkably like a claim for damages. In any event, it remains still the case that Mr Smith is seeking reimbursement for exactly the self same heads of cost and loss claimed previously from essentially the same causes as before.(c) It is clear that in both the Second and Third Adjudications there is a wholesale reliance by Mr Smith or the Company on alleged defaults on the part of Carillion throughout the course of the Sub-Contract. The whole tenor of both is that Carillion’s alleged failure to provide trenches, its alleged failure to get other contractors to do their jobs properly or on time and its alleged late provision of design information were the causes of the delay and disruption which occurred. There is undoubtedly a massive amount more detail and evidential backup in the Third Adjudication Claim but primarily what that Claim is doing is particularising to almost the greatest conceivable degree what was said before. That is why there is a recitation, often verbatim, in the Third Adjudication Claim of what was said in relation to the nine site areas in the Second Adjudication Claim.(d) Although the Statement of Claim in Chapter 1 of the Third Adjudication Claim identifies 7 breaches of "fundamental requirements" compared with the three breaches in the Second Adjudication Claim Statement of Claim, they are essentially the same or at the very least pick up on complaints which were made elsewhere in the earlier Statement of Claim or in the Response put in by the Company in the Second Adjudication. An example is that one of the apparently new complaints is the failure of Carillion to ensure that its ground works contractor carried out excavation and backfilling of trenches in the correct manner and to the correct lines and levels but that is a point made for instance at Paragraph 3.1.3 of the Statement of Claim in the Second Adjudication Claim. It follows that there are in substance overall no significant new breaches relied upon in the Third Adjudication Claim which did not arise in one form or another, so far as I can tell, in the Second Adjudication.(e) It is noteworthy that, although the Third Adjudication Claim itself refers to breaches and damages and although that Claim is referred to in the Notice of Adjudication and the Referral Notice, neither of these latter documents specifically or clearly puts the claim on the basis of any substantive breach and damages. The claim is presented in these latter documents on the basis that the sums claimed are due but, for instance, in the Referral the dispute is described as relating to the "non-payment of sums due as set out in the Application for Payment dated 9th May 2011” and as occurring by reason of the non-substantive failure of Carillion properly to "evaluate the loss and expense variation" in May 2001.(f) The primary case put by Mr Smith is however that the entitlement to loss and expense still arises in some way (somewhat difficult to ascertain) through the variation valuation provisions of the Sub-Contract which is exactly the same basis as put forward in the Second Adjudication. I conclude that what Mr Smith has done is to seek to overcome, by a massive effort on his part, the lacunae and gaps in the Sub-Contractor’s case as led the Second Adjudicator to decide that the quantum case was not proved in the Second Adjudication.[62]There is, next, reliance upon differences between the quantum now claimed and what was claimed before. In my judgement this simply can not be said in relation to the Prolongation Costs. For instance, the staff is exactly the same and the nature of the claim is exactly the same as before, namely that four named personnel were on site longer than they would otherwise have been. There are some minor differences in the amounts but they are not substantial or significant. The fact that more is now claimed for Mr Smith, for instance than was claimed before, can not and should not be seen to turn this into a different dispute in essence. A re-ordering or re-adjustment of quantification should not readily or easily turn the Third Adjudication claim in this context into something essentially different from what it was before.[63]As for the disruption costs relating to labour and plant, the Second Adjudication Claim failed because it was what is called a "global" claim. Such claims have traditionally been looked at sceptically by arbitrators and indeed judges, although they do not necessarily always fail in whole or in part. A claiming party will claim that delaying or disruptive events, which in principle entitle it to contractual reimbursement for loss and expense or to damages, have caused the shortfall between what it has spent in relation to the project and what it has recovered by way of payments. There is often scepticism as to this method of assessment because it presupposes that there is no other explanation for the incurrence of the unrecovered costs, such as, for instance an underestimated tender price in the first place or avoidable inefficiencies or incompetence on the part of the claiming party; there is also concern sometimes as to whether the claiming party has in fact recovered for some of the costs attributable to disruption and delay. Indeed, it was apparently on this basis that the Company failed in the Second Adjudication. However, essentially what the Company was doing was claiming in the Second Adjudication for the entire extra over costs, namely the difference between the actual direct labour and plant costs against the equivalent recovered.[64]What Mr Smith has done in the Third Adjudication is certainly to claim again the difference between costs incurred and what has been recovered for labour and plant but he has done essentially two things differently. To his costs he has added overheads which he claimed for separately on a Hudson Formula basis in the Second Adjudication Claim. Secondly he has done a more detailed assessment based on a day by day and area by area analysis to determine how much time was wasted or non-productive arguably as a result of the events about which he complains. However, this simply involves a re-quantification or re-packaging of essentially the same cost; it is still the same basic claim which is for the under recovery of labour and plant costs but just done in a different way. This can not in my judgement involve anything which is substantially different from what was claimed before, although I accept the Third Adjudication Claim basis may turn out to be a more arguably reliable approach then the "global" approach adopted in the Second Adjudication.[65]Finance Charges are claimed in both the Second and Third Adjudications but they are simply consequential upon the amount of the other costs claimed. The changes between the Second and Third Adjudication Claims are therefore not material or significant. The same can be said of the interest claim, which, although very large in the Third Adjudication Claim, is dependent upon an entitlement to the base costs and which is only very large because it has taken Mr Smith some 10 years since completion of the Sub-Contract works or some 8 years since the conclusion of the Second Adjudication to produce the latest claim. VAT falls into the same category, although it is unclear if there is any entitlement to VAT on damages payable.[66]The apparently very large sum claimed by Mr Smith for claim preparation costs in relation to the Third Adjudication Claim (c. £320,000) does not superficially compare with the mere £12,200 claimed in the Second Adjudication. Again, this claim, even assuming in its favour that there is any basis for claiming it, is dependent on the validity of the Third Adjudication Claim and, jurisdictionally, on there being material differences between the Third and Second Adjudication Claims. As I do not consider in essence that they are materially different, it can not be said that the Third Adjudication Claim for this amount puts it into the substantially different dispute category.[67]Essentially, Mr Smith or the Company or both exercised the right under the Sub-Contract to adjudicate the claim for delay and disruption and related loss and expense in 2003 and they lost the Second Adjudication. They did so in a sense on an unfortunate basis because a right to a full extension of time was established but the Second Adjudicator dismissed the money claim because it was not proved. It is pointless to speculate as to what he would have done if he had the information and evidence presented to him in the form in which it appears in the Third Adjudication. Numerous authorities establish that the Second Adjudicator’s decision is binding even if it is wrong in fact or law, although I do not comment as to whether it was right or wrong. I will also not decide in this judgement on the impact of Clause 30 of the agreed Adjudication Rules as to the extent to which, assuming that no notice of dissatisfaction with the Second Adjudicator’s decision was given within 60 days of notification of it, that decision is “final and binding upon the parties", the extent and scope of this clause has not been argued. However, subject to who the Sub-Contract can be considered to be between, limitation and the establishment of liability and quantum, Mr Smith has as good or as bad a remedy as he always has had since 2003, which is through the agreed method of final dispute resolution, namely arbitration. If he has allowed time to expire or if he did not give a notice of dissatisfaction within 60 days of the decision in the Second Adjudication or if he is not, was not or has become no longer in law or equity or in effect a party to the Sub-Contract, then he may be without a remedy. Decision[68]In my judgement, the Third Adjudicator has no and had no jurisdiction to resolve the dispute referred to him. To that extent, Carillion is entitled to an appropriate declaration to that effect.

Cited in 7 later judgments