Leading Rule v Phoenix Interiors Ltd
Case reference:
[2007] EWHC 2293 (TCC)
Wednesday, 3 October 2007
Key terms: Preliminary Issues - TCC Case Management
In December 2005, the Claimant, Leading Rule, employed Phoenix Interiors Ltd to carry out mechanical and electrical works under a contract based on the JCT form. Disputes arose in the summer of 2006, and the parties reached what they called an Addendum Agreement. One of the issues within the Agreement was whether one of the sums, £108,000-odd, plus VAT was to be paid on or before 21st July 2006 and whether or not this represented the final date for payment. In August, an adjudication was held, and shortly following the decision Leading Rule did paid the £108,000, but not the VAT. In February 2007, Phoenix served a notice of default and purported to determine their contract for non-payment of the VAT. Leading Rule rejected this determination and instructed Phoenix to proceed with the works with reasonable diligence.
In September 2007, Phoenix commenced proceedings seeking to overturn part of the Adjudicator's decision. They were seeking a declaration that clause 4.12.6 of the contract does not modify the notice period required by s.112 of the Act from at least 7 days to at least 28 days before the right to suspend performance may be exercised. At the end of September 2007, Leading Rule also issued proceedings. They sought to expand the overall series of disputes, argue that they did not conflict with s.112 of the Act, and claim that the purported determination of the contract was invalid and ineffective.
The contested issue before Akenhead J was whether or not there should be an ordering of preliminary issues in pursuit of a further adjudication.
Akenhead J, after considering the overriding objective and the TCC Court Guide approach on preliminary issues in the context of proper case management, formed the view that the ordering of preliminary issues will not substantially save time or money on the facts of this case.
In September 2007, Phoenix commenced proceedings seeking to overturn part of the Adjudicator's decision. They were seeking a declaration that clause 4.12.6 of the contract does not modify the notice period required by s.112 of the Act from at least 7 days to at least 28 days before the right to suspend performance may be exercised. At the end of September 2007, Leading Rule also issued proceedings. They sought to expand the overall series of disputes, argue that they did not conflict with s.112 of the Act, and claim that the purported determination of the contract was invalid and ineffective.
The contested issue before Akenhead J was whether or not there should be an ordering of preliminary issues in pursuit of a further adjudication.
Akenhead J, after considering the overriding objective and the TCC Court Guide approach on preliminary issues in the context of proper case management, formed the view that the ordering of preliminary issues will not substantially save time or money on the facts of this case.
"I am not satisfied that it would significantly improve the possibility of a settlement and I am not satisfied that a significant element of the proceedings would or would necessarily be determined. ... I am also concerned that if I were to order preliminary issues, the effect of any appeals process would disrupt the prompt resolution of all outstanding issues."
On this basis, Akenhead J disallowed Phoenix's application for preliminary issues, and addressed the parties with regards to having a hearing on all the issues in respect of this case other than the quantification of any damages, within a shortened timetable.