Connex South Eastern Ltd -v- M J Building Services Group plc
Case reference:
[2005] EWCA Civ 193
Tuesday, 1 March 2005
Key terms: Enforcement of adjudicator’s decision - joint contractors - superseded performance - new performance - Release - Satisfaction - Accord - Section 108 - “at any time”.
This was an appeal from the decision of HHJ Havery of 25 June 2004 in which he determined 4 issues. The Judge found that an oral instruction was evidenced in writing by the minutes of a meeting dated 15 September and so declared that the contract was in writing within the meaning of Section 107. This was not challenged in the Appeal.
The argument advanced by Connex was that MJ Building did not have a right to refer a dispute to adjudication pursuant to Section 108. This was on the basis that the employer identified in the documents was “Connex South (Central/Eastern) Limited” and that no company of that name existed. However, Connex South Central Limited (“Central”) and Connex South Eastern Limited (“Eastern”) were sister companies.
Connex argued that both Central and Eastern were joint contractors in respect of the original contract. After the dispute had arisen an agreement of 11 February 2004 between Central and MJ in respect of the works to be carried out, amounted to an accord such that the original performance was superseded by a new performance which constituted satisfaction between the parties. As a result, MJ had released Central from its original obligations, and therefore both Central and Eastern (because they were joint contractors) were both released. There was then, according to Connex no dispute capable of being referred to adjudication. The first part of their argument was essentially factual and based upon the relationship between Central and Eastern and the involvement of both of these companies in the work to be carried out by MJ.
Connex also cross-appealed, arguing that the adjudication proceedings commenced on 29 November 2002, after the initial suspension some 18 months before 20 September 2000, was an abuse of the process. Connex proposed that this was on the basis that the phrase “at any time” in Section 108(1) of the Act could not be read literally. Parliament’s intention was that adjudication was to take place during the course of the works, as a quick and cheap process, to produce a temporary decision.
Lord Justice Dyson gave the leading judgment and held that the matrix of facts made it clear that the agreement of 11 February only related to stations controlled by Central. The agreement was therefore only between Central and MJ Building. Discussions did not concern Eastern’s stations, the agreement did not cover those stations, and so the matter was in dispute and could be referred to adjudication.
In respect of the cross-appeal the phrase “at any time” meant exactly what it said. There were no time limits, and so a party could bring a dispute at any time even after completion of the works. Lord Justice Carnath and Lord Justice Ward agreed.
The argument advanced by Connex was that MJ Building did not have a right to refer a dispute to adjudication pursuant to Section 108. This was on the basis that the employer identified in the documents was “Connex South (Central/Eastern) Limited” and that no company of that name existed. However, Connex South Central Limited (“Central”) and Connex South Eastern Limited (“Eastern”) were sister companies.
Connex argued that both Central and Eastern were joint contractors in respect of the original contract. After the dispute had arisen an agreement of 11 February 2004 between Central and MJ in respect of the works to be carried out, amounted to an accord such that the original performance was superseded by a new performance which constituted satisfaction between the parties. As a result, MJ had released Central from its original obligations, and therefore both Central and Eastern (because they were joint contractors) were both released. There was then, according to Connex no dispute capable of being referred to adjudication. The first part of their argument was essentially factual and based upon the relationship between Central and Eastern and the involvement of both of these companies in the work to be carried out by MJ.
Connex also cross-appealed, arguing that the adjudication proceedings commenced on 29 November 2002, after the initial suspension some 18 months before 20 September 2000, was an abuse of the process. Connex proposed that this was on the basis that the phrase “at any time” in Section 108(1) of the Act could not be read literally. Parliament’s intention was that adjudication was to take place during the course of the works, as a quick and cheap process, to produce a temporary decision.
Lord Justice Dyson gave the leading judgment and held that the matrix of facts made it clear that the agreement of 11 February only related to stations controlled by Central. The agreement was therefore only between Central and MJ Building. Discussions did not concern Eastern’s stations, the agreement did not cover those stations, and so the matter was in dispute and could be referred to adjudication.
In respect of the cross-appeal the phrase “at any time” meant exactly what it said. There were no time limits, and so a party could bring a dispute at any time even after completion of the works. Lord Justice Carnath and Lord Justice Ward agreed.