Baris Ltd -v- Kajima Construction Europe (UK) Ltd
Case reference:
[2006] EWHC 31 (TCC)
Friday, 20 January 2006
Key terms: Adjudicator’s decision - compromise - Part 36 Offer - binding agreement - was interest included in the offer - costs.
The claimant was a dry wall partitioning subcontractor engaged by the claimant in respect of a site in Bootle, Merseyside for the Health and Safety Executive. The Adjudicator’s decision awarded the claimant £181,895.60. The claimant did not pay, but made a CPR Part 36 Offer. The day after the offer was made the defendant accepted it and confirmed that funds would be paid on 3 January 2006. The full amount of the Adjudicator’s decision was paid on 3 January 2006.
On 19 December 2005 the claimant commenced proceedings in the TCC for the full amount together with interest and costs on an indemnity basis. The application made no mention of the Part 36 Offer and this acceptance.
The defendant argued that there had been no binding agreement between the parties because no money had been paid in respect of interest nor had any liability in respect of costs been agreed.
The issue turned upon the construction of the offer made by the subcontractor. His Honour Judge Peter Coulson QC noted that the offer was in the sum of “£181,895.60 only”. It made no mention of any requirement for interest being paid in addition to that figure. The offer was therefore limited to that lump sum payment and any argument that interest was to be paid on top was “palpably incorrect”.
In respect of costs, there was a binding agreement before the High Court proceedings were commenced. There was, therefore, no need for the claimant to serve High Court proceedings and the subcontractor would therefore not be awarded any costs. The defence of accord and satisfaction was successful.
On 19 December 2005 the claimant commenced proceedings in the TCC for the full amount together with interest and costs on an indemnity basis. The application made no mention of the Part 36 Offer and this acceptance.
The defendant argued that there had been no binding agreement between the parties because no money had been paid in respect of interest nor had any liability in respect of costs been agreed.
The issue turned upon the construction of the offer made by the subcontractor. His Honour Judge Peter Coulson QC noted that the offer was in the sum of “£181,895.60 only”. It made no mention of any requirement for interest being paid in addition to that figure. The offer was therefore limited to that lump sum payment and any argument that interest was to be paid on top was “palpably incorrect”.
In respect of costs, there was a binding agreement before the High Court proceedings were commenced. There was, therefore, no need for the claimant to serve High Court proceedings and the subcontractor would therefore not be awarded any costs. The defence of accord and satisfaction was successful.