“the calculation of the Final Sub-Contract Sum i.e., the true value of the Final Sub-Contract Sum”
“QFS offers the following to seek to alleviate his concerns: 1. QFS will not serve its Referral in Adjudication 11 before Friday13 January 2022 . 2. Thereafter, the usual timetable will follow in Adjudication 11 unless otherwise extended by the parties’ mutual consent or by the Referring Party by up to fourteen days, pursuant to Annex 8, clause 1.5.3. 3. The Referring Party’s rights are preserved, pursuant to Annex 8, clause 1.5.3, to extend the period within which the Adjudicator shall reach his decision by up to fourteen days without the Respondent’s consent. 4. Accordingly, the extension to the timetable required to effect the above is agreed to be with the consent of both parties. 5. If for some unforeseen or unforeseeable reason QFS is delayed in serving its Referral in Adjudication 11 until after Friday13 January 2022 then the parties both consent to extend the period within which the Adjudicator shall reach his decision by the same number of days that the service of the Referral is delayed. This consent shall not need further ratification by either party.”
“QFS does not currently intend to serve the Referral on Friday13 January 2023 and anticipates that it may be the week after next before it does so.”
“Just to update you on Adjudication Nr.11, I shall be writing to you at some point soon in relation to Adjudication 11 timetable but advise that QFS expect it to be another two weeks or so before submission.”
“108. The modern view is accordingly to recognise that commercial parties are free to make their own bargains and allocate risks as they think fit, and that the task of the court is to interpret the words used fairly applying the ordinary methods of contractual interpretation. It also remains necessary, however, to recognise that a vital part of the setting in which parties contract is a framework of rights and obligations established by the common law (and often now codified in statute). These comprise duties imposed by the law of tort and also norms of commerce which have come to be recognised as ordinary incidents of particular types of contract or relationship and which often take the form of terms implied in the contract by law. Although its strength will vary according to the circumstances of the case, the court in construing the contract starts from the assumption that in the absence of clear words the parties did not intend the contract to derogate from these normal rights and obligations. 109. The first and still perhaps the leading statement of this principle is that in Modern Engineering (Bristol) Ltd v Gilbert-Ash (Northern) Ltd[1974] AC 689 (“Gilbert-Ash”). The question was whether the parties to a building contract had agreed to exclude the contractor’s common law and statutory right to set off claims for breach of warranty against the price. The right allegedly excluded was thus one which would diminish the value of the claim otherwise maintainable against the contractor. Lord Diplock said (at 717H): “It is, of course, open to parties to a contract for sale of goods or for work and labour or for both to exclude by express agreement a remedy for its breach which would otherwise arise by operation of law … But in construing such a contract one starts with the presumption that neither party intends to abandon any remedies for its breach arising by operation of law, and clear express words must be used in order to rebut this presumption.” “It is, of course, open to parties to a contract for sale of goods or for work and labour or for both to exclude by express agreement a remedy for its breach which would otherwise arise by operation of law … But in construing such a contract one starts with the presumption that neither party intends to abandon any remedies for its breach arising by operation of law, and clear express words must be used in order to rebut this presumption.”
“9. As to the purpose of Final Certificates and conclusive evidence clauses, the following citations are relevant: (a) Conclusivity clauses "provide some limits to uncertainties and expense of arbitration and litigation": see Lord Denning in Agro Company Canada Ltd v Richmond Shipping ("the Simonburn")[1973] 1 Lloyds Rep 292 . (b) Conclusive evidence clauses were devised "to obviate cumbersome and painstaking enquiries to prove out-standings on running accounts…": see VK Rajah J in the High Court of Singapore in Standard Chartered Bank v Neocorp International Ltd [2005] SGHC 43. (c) Conclusive evidence clauses are intended "to provide contractually agreed limits to the scope of disputes and to provide clarity as to the parties' obligations once a project is complete": see the recent judgment of Carr J in University of Brighton v Dovehouse Interiors[2014] BLR 432 , which concerned the same clause of the JCT Contract as the present case.” (a) Conclusivity clauses "provide some limits to uncertainties and expense of arbitration and litigation": see Lord Denning in Agro Company Canada Ltd v Richmond Shipping ("the Simonburn")[1973] 1 Lloyds Rep 292 . (b) Conclusive evidence clauses were devised "to obviate cumbersome and painstaking enquiries to prove out-standings on running accounts…": see VK Rajah J in the High Court of Singapore in Standard Chartered Bank v Neocorp International Ltd [2005] SGHC 43. (c) Conclusive evidence clauses are intended "to provide contractually agreed limits to the scope of disputes and to provide clarity as to the parties' obligations once a project is complete": see the recent judgment of Carr J in University of Brighton v Dovehouse Interiors[2014] BLR 432 , which concerned the same clause of the JCT Contract as the present case.”
“The first case in time was the decision of HHJ Havery QC in Bennett v FMK Construction Ltd [2005] ADJ. L.R. 06/30. This involved the effect of potential procedural difficulties on the validity of a notice of adjudication which challenged the Final Certificate. Judge Havery concluded that the first notice of adjudication in that case was sufficient to prevent the Final Certificate from becoming conclusive evidence, even though that first notice was later replaced by a second notice of adjudication that was served outside the period prescribed by the contract. At paragraph 15 of his judgment, the judge agreed that, if the referring party abandoned adjudication proceedings by failing to pursue them, then the saving provision (clause 1.9.3 in the present case) would no longer apply. But he said that that was not the position in the case before him.”
“What was required was the giving of a notice to the University that complied substantively with paragraph 1(3) of the Scheme. The University was driven in this regard to submit in reply that the commencement of proceedings for the purpose of clause 1.9.2 should be construed so as to mean the doing of everything in the power of the referring party to reach a full and final adjudication. This is an unwarranted extension of the phrase "commencement of proceedings" which, for the reasons set out above, requires no more than the giving of a valid notice under paragraph 1(3) of the Scheme.”
“This conclusion is not inconsistent with the view expressed in Tracy Bennett v FMK Construction Ltd (supra) at paragraph 15. There the court accepted that if a referring party abandons adjudication proceedings by simply not pursuing them, the saving proviso would fall away. Subject to Lanes Group plc v Galliford Try Infrastructure Ltd (supra) as discussed further below, that view could be seen as consistent with an objective view of the parties' intention at the time of the contract. Otherwise a party could simply abuse the ability to commence proceedings under the Scheme by serving a notice of intention to proceed and removing the conclusive effect of the Final Certificate without any intention to resolve the dispute under the Scheme. Parties would not objectively be taken to have intended in such circumstances the saving proviso to have remained effective.”
“[93] In any event, to the extent that any material inconsistencies exist, there is recent appellate guidance to be found in Lanes Group v Galliford Try (supra). There the main contractor ("Galliford"), having commenced adjudication proceedings, then terminated them by simply not serving its statement of case on the adjudicator. It took the view at the time (wrongly so it turned out) that the selected arbitrator could not properly act. It then, after a period of time, served a new notice and sought a fresh appointment on the same dispute. It effectively "started again", adjudicating the same dispute before a different adjudicator. [94] At paragraphs 36 to 39 Jackson LJ said: "36. …. The argument ... is that … clause 18B of the sub-contract conditions permit a party to refer a dispute to adjudication on one occasion only. If the party seeking adjudication….does not follow through the reference, that is the end of the matter. The right to adjudication of the dispute notified in the adjudication is lost forever. Therefore, argues Mr Wilmot-Smith, Galliford having allowed the adjudication before Mr Klein to lapse could not commence a fresh adjudication in respect of the same subject-matter. "36. …. The argument ... is that … clause 18B of the sub-contract conditions permit a party to refer a dispute to adjudication on one occasion only. If the party seeking adjudication….does not follow through the reference, that is the end of the matter. The right to adjudication of the dispute notified in the adjudication is lost forever. Therefore, argues Mr Wilmot-Smith, Galliford having allowed the adjudication before Mr Klein to lapse could not commence a fresh adjudication in respect of the same subject-matter. 37. The court was initially attracted by Mr Wilmot-Smith's submission. The proposition that a claimant can allow an adjudication to lapse because it disapproves of the appointed adjudicator and then start a fresh adjudication before a different adjudicator is not an appealing one…Mr Marrin has persuaded me, however, that there are formidable difficulties in the case which Lane advances. First it does sometimes happen that adjudication is not pursued further after the preliminary steps have been taken. There is no authority to suggest that as a consequence the claimant loses its right to adjudicate that dispute for all time. 38. Secondly, both the Blue Form sub-contract, the ICE Adjudication Procedure and the Scheme recognise a right to restart an adjudication in a variety of circumstances…. It is possible to think of many situations, not all of which are provided for by express terms, in which the adjudication procedure would be thwarted if there were no right to re-start an abortive adjudication. For example, suppose there is a postal delay which prevents the referral documents being served within two days as required by paragraph 4.1 of the ICE Adjudication Procedure. It cannot be right that the claimant's entitlement to adjudicate the dispute is irretrievably lost. 39. Mr Wilmot-Smith seeks to overcome these difficulties by arguing that the claimant only loses the right to adjudicate if he deliberately and without good reason fails to serve referral documents by the due date. In my view, however, it is quite impossible to imply a term of this nature either into the present contract or into the 1996 Act and the Scheme. Furthermore, if such an elaborate provision were to be implied, an expensive factual investigation would be required in some cases in order to determine whether the claimant had or had not lost the right to adjudicate." [95] The University says that the Court of Appeal was not there dealing with a conclusive evidence clause. But the approach in principle is in my judgment still applicable, not least since the Court of Appeal was expressly considering the Scheme and the effect of the lapse of adjudication under the Scheme. [96] As set out above, the Court of Appeal eschewed the notion that where adjudication is not pursued (for whatever reason) the right to adjudication is lost forever. It drew no distinction between circumstances where adjudication was thwarted by error on the part of the referring party or for some other reason. It expressly rejected the invitation to alter the result by reference to the cause of the adjudication proceedings not continuing to their end. [97] Objectively construed, the parties would have intended the saving proviso in clause 1.9.2 to be and remain engaged in circumstances where a notice of adjudication that was valid under paragraph 1 of the Scheme inadvertently identified the wrong nominating body for referral purposes. The error would not lead to the loss of the entitlement to the saving proviso in clause 1.9.2 of the Contract. This is what the reasonable person as envisaged Rainy Sky SA v Kookmin Bank (supra) would have understood the parties to have intended. [98] In short, an invalid referral does not render invalid a notice of adjudication for the purpose of commencing adjudication proceedings within the meaning of clause 1.9.2.”
“The points in dispute were similar to those in Bennett. Carr J reached a similar decision, namely that, whatever the technical difficulties with the first notice of adjudication in that case, it had achieved its substantive purpose in commencing proceedings, and therefore the Final Certificate had been validly challenged. The judge concluded that this was so, even if (because the wrong nominating body had been referred to), a further notice of adjudication was required.”
“The subject matter of the second Notice is also the calculation of the Final Sub-Contract Sum, i.e., the same subject matter as the first Notice, which means that once a Decision is made regarding the matter referred on17th May 2023 , there will be a decision in relation to the subject matter of the proceedings commenced by the first Notice.”
“I accept Mr. Mort's argument to this extent: that if the referring party abandons adjudication proceedings by simply not pursuing them, then the salvo in clause 30.9.3 ceases to apply. However, that is not this case.”
“On the facts here there is no consider a question of abandonment "by [Dovehouse] simply not pursuing [the adjudication proceedings]" as envisaged in Tracy Bennett FMK Construction Ltd (supra). Dovehouse has always had every intention of pursuing the adjudication proceedings. It issued them within time, albeit containing an error in relation to the nominating body. As soon as the error was identified and the First Adjudicator resigned (in the afternoon of Friday21st February 2014 ), Dovehouse amended the First Notice with the Second Notice on the next working day, Monday24th February 2014 . The adjudication proceedings have only not proceeded because of the stay agreed by the parties pending the outcome of this claim. Thus the situation is materially different to one of abandonment.”
“Prior to your crazy consultant launching the Final Adjudication do you want to have a chat?”
“I am wondering whether it would be better having a chat after the outcome of Adj 9 & 10 but before we embark on Adj 11. Any discussion would need to be on a without prejudice basis and to avoid doubt, I wouldn’t want you to suspend any of the current proceedings or hold off from what you need to do.”
“As mentioned during our recent meeting, we will be reissuing adj 11 imminently. With that in mind, should we put Lee and Paul in a room to agree on figures as figures where they can?”
“Yes seems sensible – I assume you mean before formally issuing Adjudication No 11?”
“Yes, Nigel, before issuing. I will ask Paul to contact Lee to arrange a suitable date and time.”
“I refer to our recent email exchanges in respect of Lee and Paul meeting up in an attempt to agree individual account items in advance of a possible Adj No.11. … BPS is willing to engage in discussions with QFS on a strictly without prejudice basis to explore whether the disputes can be resolved commercially without recourse to further proceedings. However, BPS does not waive any of its rights under the contract or at law. This includes, without limitation and for the avoidance of doubt:- a. BPS does not waive its position set out in email of31 January 2023 that the Referral Notice for Adjudication No.11 ought to have been issued by 4pm on3 February 2023 , and accordingly any purported Referral Notice served now or in the future will be late and a fundamental procedural flaw rendering the Adjudicator without jurisdiction; b. BPS does not waive the conclusive effects of the Final Payment Notice issued on22 December 2022 including (without limitation) determination of the Final Sub-Contract Sum.”
“The intention behind my email dated 17th instance was for Paul and Lee to agree on ‘figures as figures’ before Adj 11 is submitted to save time and cost in the adjudication…. While I am open and have always been available to have without prejudice meetings to try to resolve the account, it must be the account as a whole…. Regarding your email, I’m afraid I have to disagree with points a. and b. I understand you have a position, and I will not attempt to address them here and leave that to others. If you see any value in Paul and Lee meeting to agree on ‘figures as figures’ before we reissue Adj 11, I remain open to that, provided any agreements made are firm and unchangeable.”
“I understand that Paul and Lee have met, and Paul has briefed me on the details. If Lee has also provided you with an update, would a final meeting between us help conclude this account or should we press on with adj 11?”
“We are fully prepared for the process ahead, despite the potential time and cost involved. Moreover, based on extensive legal advice, we are confident in our position…. Please let me know if you would like to proceed with this meeting tomorrow. Otherwise, we will continue with the current course of action.”
“[31] Although Bennett indicates that the saving proviso may fall away if a Referring Party “abandoned” proceedings by not pursuing them, both Bennett and Dovehouse suggest that this would not be the case if the Referring Party always had the intention of pursing (sic) adjudication proceedings. On the facts that is precisely the position here; QFS clearly wished to pursue adjudication proceedings in relation to the calculation of the Final Sub-Contract Sum. [36] With the benefit of hindsight, it may have been prudent for QFS to have protected its position, e.g., by attempting to agree a standstill. However, the key factor is that it was clear that QFS was not foregoing its right to obtain a decision in respect of the calculation of the Final Sub-Contract Sum, and I therefore reject any suggestion that the current proceedings represent an abuse of process or that QFS was not intent on pursuing adjudication proceedings in the event that the parties’ discussions did not result in a settlement of the dispute in respect of the Final Sub-Contract Sum. I therefore do not accept that the fact that the adjudication proceedings in respect of the first Notice were effectively “timed out” renders the Final Payment Notice conclusive in respect of the matters referred to me in Adjudication No.11.”
“The Claimant has received interim payments from the Defendant totalling£31,938,119.00 (exclusive of VAT) and if given proper effect, the declarations contained in the Decision result in monies being due to the Claimant of£3,177,462.85 (plus VAT).”