IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN NEWCASTLE
TECHNOLOGY AND CONSTRUCTION COURT (KBD)

		The Moot Hall, Castle Garth, Newcastle upon Tyne, NE1 1RQ
		06/12/2023

B e f o r e :

HH JUDGE DAVIS-WHITE KC
(SITTING AS A JUDGE OF THE KING’S BENCH DIVISION)
____________________Between:

	ILUMINESIA LIMITED (t/a ALTEREGO FACADES)	Claimant
	– and –
	RFL FACADES LIMITED	Defendant

____________________

Mr John McMillan (instructed by Hay & Kilner LLP) for the Claimant
Mr James Bowling (instructed by Ridgemont Legal Services Ltd) for the Defendant

Hearing date: 20 November 2023
____________________

HTML VERSION OF APPROVED JUDGMENT
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Crown Copyright ©

1. This is my judgment on a summary judgment application in adjudication enforcement proceedings brought by the Claimant, Iluminesia Limited (trading as AlterEgo Facades) (“AlterEgo”) against the Defendant, RFL Facades Limited (“RFL”).
2. The hearing had been adjourned by agreement due to the unavailability of counsel by reason of illness.
3. In addition to the adjudication enforcement proceedings, RFL has commenced Part 8 Proceedings (the “Part 8 Proceedings”). It has also served, without any court order, particulars of claim in the Part 8 Proceedings. By the Part 8 Proceedings, and in the event that it fails on the summary judgment application, RFL seeks declaratory relief, in effect, overturning the Adjudicator’s decision in whole or part on the basis of error of law, any such decision of the court being a final one and replacing the interim decision of the Adjudicator.
4. It has been agreed before me that I should first deal with and give judgment on the summary judgment application in the adjudication enforcement proceedings. In light of that judgment, the parties will then address me further as to the appropriate procedural course to take. In particular (among other things), in the event that I grant summary judgment, there may be an issue as to whether I should stay any order for summary judgment pending resolution of the Part 8 Claim.
5. The Adjudication in this case was conducted by Mr Donald Pugh MSc, FCIArb, FCIOB, Solicitor (“Mr Pugh” or the “Adjudicator”). It was commenced by a Notice of Intention to Refer to Adjudication dated 23 June 2023 (the “NOI”). AlterEgo requested the President of the Royal Institution of Chartered Surveyors (“RICS”) to nominate an adjudicator. By email dated 24 June 2023, RICS appointed Mr Pugh, a solicitor. Mr Pugh accepted the appointment on 26 June 2023. His final decision was given on 28 July 2023.
6. On 29 June 2023 AlterEgo served a Referral Document. The Defendant’s Response was served on or about 14 July 2023. A Reply was served on 18 July 2023. A Rejoinder was served on 20 July 2023. By his decision dated 28 July 2023 the Adjudicator ordered RFL to pay AlterEgo £776,920.32 plus applicable VAT, interest and 80% of the Adjudicator’s fee, within 7 days of the decision.
7. During the adjudication process, RFL raised three jurisdictional challenges, in brief that (1) the NOI failed to identify the relevant contract (or identified the incorrect one: this being a case where the formation of the contract depends upon an analysis of relevant correspondence between the parties); (2) the NOI and Referral failed to particularise breach of an “Order Acceptance” which document I shall refer to below and which was said by RFL to be the only contract identified in the NOI and (3) that a common law claim (of a repudiatory breach of contract), as opposed to breach of contract claim, was said to be raised as an alternative claim which was not a dispute arising under a contract for the purposes of s108 of the relevant Act. It then raised a fourth jurisdictional challenge, which was that the nature of the dispute and details of where and when it arose were included in the NOI but a brief description of the dispute was not. AlterEgo contested each of these challenges.
8. On 7 July 2023, the Adjudicator gave his non-binding views on jurisdiction. His conclusion was that there was nothing raised that would lawfully deprive him of jurisdiction, at least at that stage.
9. RFL then raised a fifth jurisdictional challenge which was that the contract in question was not a “construction contract” for the purposes of s104 of the Housing, Grants, Construction and Regeneration Act 1996 (the “1996 Act”). Adjudication could only apply if AlterEgo’s terms and conditions were incorporated into the contract which, said RFL, they were not. By further written submissions dated 10 July 2023, RFL made yet further submissions on its five jurisdictional challenges and engaged with and challenged the Adjudicator’s non-binding views. RFL also complained about the costs being incurred in the adjudication.
10. On 14 July 2023, the Adjudicator gave further supplemental non-binding views on jurisdiction. Among other things, he confirmed his view set out in an earlier email where he accepted that his earlier expressed view that the contract would be a “construction contract” was wrong:
11. He also referred to a further submission by RFL, inviting him to resign on the basis that he should direct a preliminary issue as to the issue of contract formation but that as there was now no time to do so, he could be satisfied that he could not fairly and reasonably arrive at a decision in the allotted time (citing Coulson on Construction Adjudication (4^th edn) paras 4.64/65). He rejected that invitation. His overall conclusion remained unchanged.
12. The Adjudicator’s final decision was, as I have said, given on 28 July 2023.
13. The Claimant was represented before me by Mr McMillan of Counsel. The Defendant was represented by Mr Bowling. I am grateful to them for their helpful written and oral submissions.
14. The evidence before me on the summary judgment application comprised two witness statements of Mr Jan Rzedzian, of Hay & Kilner LLP, solicitors for the Claimant, AlterEgo and one witness statement of Mr Timothy Seal of Ridgemont Legal Services Limited, solicitors for the Defendant, RFL.
15. In addition extra documents were handed up during the hearing, without objection, by Mr Bowling, These comprised further pages 388 to 404 of the hearing bundle comprising a revised purchase order of RFL dated 9 January 2023, omitting the GRC Fins; a letter of 20 February 2023 from Hay & Kilner LLP on behalf of AlterEgo dealing with termination of the contract; the Letter of Claim sent by Hay & Kilner LLP dated 27 March 2023; the Letter of Reply of Ridgemont Legal Services Limited dated 5 May 2023 and another copy of the quotation of 15 December 2021.
16. AlterEgo is a supplier of architectural stone and concrete cladding.
17. The dispute in this case relates to a supply, or potential supply of cladding materials by AlterEgo to RFL in relation to RFL’s works on a site at Eastbourne Terrace, London W2 (the “Site”).
18. One of the issues between the parties is whether a supply contract was entered into between them, and if so on what terms, in relation to the supply of goods/materials by AlterEgo to RFL.
19. As part of the relevant negotiations it was envisaged that a separate contract would be entered into by each of the parties before me and main contractor to RFL, RFL being its sub-contractor, regarding the relevant supply (the “Advance Payment Agreement”). The following detail is taken from a draft of that agreement. CSHV IUK ET Devco Limited (the “Employer”) and Gilbert Ash Limited (the “Main Contractor” or “GA”) had entered into a building contract under which the Main Contractor, GA, was to provide the design and build of cladding at the Site. The Main Contractor, GA, entered into a sub-contract with RFL for the purposes of carrying out the relevant defined works. RFL was in turn looking to enter into a contract with AlterEgo for the purposes of AlterEgo providing materials and/or goods for the works. In broad terms, under the proposed agreement between (1) GA, (2) RFL and (3) AlterEgo, in the event of a relevant payment default by RFL, GA would assume responsibility for the payment obligations of RFL to AlterEgo under the contract between AlterEgo and RFL and title to the goods that GA paid for would pass directly from AlterEgo to GA.
20. At various times, as I shall explain, AlterEgo quoted for the supply to RFL of 3 components (a) about 770 GRC (glass reinforced concrete) cladding panels (referred to as “GRC Fins”); (b) a hanging system for the GRC Fins, including casting rod, hanging clasp and rail (referred to before me as the “Carrier Rails System”) and (c) a subframe, including mullions and brackets (referred to before me as the “Subframe”). Over time the quotations changed as prices varied. However, some indication of the different prices at stake can be gleaned from a quotation from AlterEgo dated 15 December 2021 where the break down was (a) GRC Fins: £674,803.30; (b) Rails: £90,770.40 and (c) Sub-Frame: £102,116.70.
21. AlterEgo supplied RFL with the Carrier Rails System and Sub-Frame in about May 2022. However, RFL decided not to proceed with taking delivery of any GRC Fins. At the time, AlterEgo, treated the refusal to proceed with the GRC Fins as being a repudiatory breach of contract by RFL which it purported to accept.
22. Before turning to the defences to the summary judgment application, I turn to the applicable law. I did not understand there to be any dispute as to the applicable law regarding the grant of summary judgment.
23. The Claimant must show that the Defendant has no real prospect of succeeding on the claim or issue on which summary judgment is sought and there must be no other compelling reason why the case should be disposed of at trial (CPR r24.3). No point was raised by the Defendant that there was some other compelling reason for trial. The case therefore turns on whether the Claimant can show, at this stage, that the Defendant has no real prospect of succeeding in each of the defences that it raises.
24. I was referred to the relevant notes in the White Book and in particular, the summary of principles formulated by Lewison J (as he then was) in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] as approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098 at [24]:
25. I was also referred to the well-known passage from the judgment of Cockerill J in King v Steifel [2021] EWHC 1045 (Comm) at [21] to [22]: .
26. The burden of proof is of course in the Claimant to make out its case that there is no real prospect of the Defendant successfully defending the case at trial. Nevertheless it is best to start with the defences that RFL has raised.
27. RFL raises four points by way of defence:
28. I deal with the defences in the same order that the parties did.
29. It is common ground (as the Adjudicator himself, finally, accepted) that any relevant contract between AlterEgo and RFL was not a “construction contract” within the meaning of s104 of the 1996 Act. No “construction operations” within the meaning of that section (as expanded upon by s105 of the 1996 Act) were involved in a relevant manner under whatever contract there was. In effect, the contract was one for the supply of goods. Accordingly, the statutory right to adjudication under s108 of the 1996, either by way of express terms required to be included in the contract under the Act or, in default, the implied statutory scheme, and which applies to any “construction contract” does not apply in this case.
30. The question is, therefore, whether or not a contract was made which incorporated express adjudication terms. If there was such a contract with such terms then the parties could take advantage of adjudication and the Defendant’s first defence is shown to have no real prospect of success.
31. As regards the term in question, AlterEgo relies upon its standard “Terms and Conditions of Engagement” which were enclosed with other documents, including an “Order Acceptance” from AlterEgo dated 31 January 2022 (the “AlterEgo Standard Terms”). Those terms and conditions include a provision setting out the terms applicable to the adjudication if the contract in question is a “construction contract” for the purposes of the 1996 Act (see clause 12.1) but also a self-standing clause 13 as follows:
32. I did not understand Mr Bowling to contest the case that, if the AlterEgo Standard Terms were incorporated into a relevant contract, they were adequate to confer a contractual right to adjudication.
33. The case for a contract and the incorporation of the AlterEgo Standard Terms is said by the Claimant to rest upon the correspondence. It is said that there is and will be no further evidence and the court will be in as good a position as a trial Judge to construe the correspondence and determine whether or not there is a contract incorporating the relevant terms.
34. The Defendant says that although there was agreement in principle between the parties as to certain matters, there was no completed agreement between them. Secondly, it is said that in any event, the matter has to be tested by disclosure, witness evidence and submission. The court should not conduct a mini-trial on incomplete evidence. Thirdly, the fact that the Adjudicator found there to be a different contract demonstrates at least the second point.
35. I therefore turn to the correspondence. I go through this in some detail and not just the documents shown to me at the hearing. This is because the Defendant relies upon all the correspondence it exhibits to show (it submits) that no final contract was ever agreed.
36. There were clearly discussions about pricing, specifications, delivery dates and the like from at least June 2021, as shown by an email of 22 June 2021 from RFL to AlterEgo referring to RFL’s post tender interview of the day before.
37. By email dated 15 December 2021, AlterEgo emailed RFL enclosing their latest price revision “on the latest take-off provided”. The costing of the GRC Fins was £674,803.30 and the remainder of the system (which the e-mail indicated could be split between the Carrier Rails system and the vertical Subframe on a 50:50 basis. On the bottom of the quotation the following “Notes” appeared:
38. By email dated 20 January 2022, AlterEgo made plain that there was no negotiation on the price. The order was already a month late and the increases in material costs did not facilitate any discounts.
39. Under cover of an email dated 24 January 2022, RFL sent a letter of intent and a draft copy of the Advance Payment Agreement. AlterEgo was asked to sign and return the latter. As regards the letter of intent, RFL confirmed in the letter its intention to proceed with AlterEgo’s offer. It had not decided on the sub-frame but was willing to pay 10% of the £674,803.30 (contained in the 15 December 2021 AlterEgo quote) to secure the GRC fins. Once final details were received, RFL intended to instruct AlterEgo with a formal purchase order with bill of quantities and drawings.
40. AlterEgo replied by email of the same date (24 January 2022) saying that it needed an order number to process order acceptance and to invoice for the deposit. If RFL was in doubt about the subframe, it should forward an order for the carrier rail system as required. An order for the carrier rails system was “paramount” because AlterEgo would not supply the panels without the carrier rail system.
41. Under cover of an email some hours later but also on 24 January 2022, RFL sent AlterEgo a purchase order (No 1223) for the GRC fins and rails as per the quote of 15.12.2021 in the sum of £765,574.02 ex Vat.
42. Under cover of email dated 31 January 2022, AlterEgo sent to RFL an “Order acceptance and T&Cs accordingly” and as per its agreed terms also attached an invoice for the “10% project value deposit for immediate payment” so that it could “liaise with factory and put the ball rolling”. It also sought confirmation that the GRC fins dimensions on the RFL purchase order were correct so that AlterEgo could “proceed design accordingly” and payment confirmation of the 10% Deposit. I have already referred to the key aspect of AlterEgo’s terms and conditions for present purposes. The order acceptance, referring back to the RFL purchase order by number, 1223, set out the same relevant details as the purchase order and the same price but included in red certain further details such as thickness and colour and referred back to the 15.12.21 quotation. Notes at the bottom included:
43. The Invoice for the deposit was for 10% of the overall ex Vat price set out in the Order Acceptance, with VAT being added. The total invoiced was £91,888.82. The invoice was headed:
44. AlterEgo’s case is that these documents formed an offer by AlterEgo which was accepted by conduct rather than by the signing by RFL of the Order Acceptance.
45. By email dated 1 February 2022, RFL wrote to AlterEgo to say that the deposit should only be on the “GRC and casting rods” and asked for the deposit invoice to be amended and re-sent.
46. By email of the same date, AlterEgo wrote to say that the 10% was indeed and as requested for the GRC fins and hanging system/subframe so the invoice was correct. In fact this seems to be an error, by reference to the earlier documents the rods were included but not the subframe.
47. In response to an email from RFL dated 9 February 2022, which raised various questions, AlterEgo replied by email of the same date enclosing the deposit invoice and asking if RFL had managed to look at it and asking when the invoice would be paid. As regards design, AlterEgo sought confirmation by email of what had been confirmed orally by RFL, namely that the dimension on the purchase order were correct so that it would be alright to proceed to design. As regards a proposed impact test, AlterEgo said that it had been agreed that RFL would be sending production drawings in the meantime. This would need to be priced and an order placed for the material in question. AlterEgo then asked if it could proceed to production once the design was complete or whether it should wait for the test results.
48. By email dated 11 February 2022, AlterEgo referred to a telephone conversation earlier that day and thanked RFL for the heads up regarding the deposit payment. It confirmed that confirmation for PMU had been received from RFL, re mock up panels and enclosed a schedule with rates allocated and asked for a purchase order to be raised for the Mock-up accordingly. Transport costs were to be confirmed closer to the dispatch date.
49. By email dated 15 February 2022, AlterEgo sent a chasing email asking about the deposit and any order for mock up panels. RFL wrote back the same day saying that it had not received payment from the contractor and would update AlterEgo in due course.
50. By email dated 22 February 2022, AlterEgo attached the latest drawings together “with fab drawings for the panels”. It asked for these to be checked and confirmed so that an order could be placed by AlterEgo with the factory.
51. By email dated 23 February 2022, RFL confirmed that the GRC panels were the correct dimensions.
52. By email dated 25 February 2022, AlterEgo, further to a telephone conversation and “this correspondence”, stated its belief that “all is confirmed so we can out this material into production as soon as a deposit is paid from your end”. Once the deposit was paid, AlterEgo would liaise with the factory and only then would they have a production plan from the factory to forward to RFL.
53. On 11 March 2022, as shown by a payment advice of that date, RFL paid AlterEgo £50,000 by way of Faster Payments.
54. Under cover of an email dated 16 March 2022, RFL sent a revised purchase order now including the subframe. It asked for the production and vesting schedule to be sent. The revised purchase order was now for the full sum of £867,690.72 (ex VAT) as per AlterEgo’s quote of 15 December 2021.
55. Two emails from AlterEgo followed. Essentially, they made the point that the second tranche of the deposit had not been paid on 18 March as promised and that an order could not therefore be placed with the factory. Further, AlterEgo could not wait to keep the current price offer open, if an order with the factory was not placed then the quotation would have to be amended.
56. RFL’s response, by email also of 24 March 2022, was that payment of the remainder of the deposit had been processed and the funds should be with AlterEgo the following morning.
57. On 24 March 2022, as shown by a statement of that date, £41,888.82 was paid by Faster Payments by RFL. With the payment of 11 March 2023, this completed payment of the full deposit invoiced by AlterEgo by invoice dated 31 January 2022.
58. By email dated 29 March 2022, AlterEgo sent RFL a revised cutting schedule with latest changes on the GRC fin types and addition of the subframe. It asked for the detail to be reviewed and, if correct, for a revised purchase order and an instruction to manufacture the whole order.
59. By email dated 14 April 2022, RFL asked AlterEgo for a copy of its, AlterEgo’s, purchase order to the manufacturer (with any commercial matters being hidden at AlterEgo’s option). RFL was looking for reassurance that the production line was booked, fixed prices would be maintained for the duration of the project and materials would be manufactured in line with the project needs. The email made reference to AlterEgo’s “recent appointment for Eastbourne Terrace”.
60. By email dated 19 April 2022, RFL asked AlterEgo to sign and return a copy of the Advanced Payment Agreement, sent to AlterEgo in January: the “Client is chasing”.
61. By email dated 4 May 2022, AlterEgo sent RFL paperwork relevant to the purchase order placed by AlterEgo with the manufacturer, Kroe Spólka z Ograniczona in Poland. The email made the point that it was based on the recent schedule of material that had yet to be confirmed by means of an updated purchase order from RFL and that AlterEgo was waiting on the purchase order and the go ahead for production, which was provisionally booked for May-July 2022. Prices would not be able to be kept beyond that period.
62. By email dated 5 May 2022, AlterEgo wrote to RFL complaining that the order and deposit payment from RFL were substantially delayed and moved the start of production by 2 months and forced AlterEgo to change manufacturer. Production still had not started as it was pending RFL’s go-ahead, required to start moulds design and production. Once again, by holding confirmation back of the final requirements for the project and the go-ahead, RFL was causing delay. Various suggestions were made as to updating the Supply Contract (purchase order and order acceptance) and to the Advanced Payment Contract. As regards the latter one suggestion was the annexation of the final purchase order/order acceptance “as already requested and agreed by email on 27 April 2022”.
63. On 19 May 2022, AlterEgo sent RFL a draft vesting certificate (of title).
64. By email dated 24 May 2022, AlterEgo expressed concern regarding progression of agreement on the vesting certificate and the non-alignment of the various agreements involved.
65. By email dated 1 June 2022, AlterEgo sent invoices and detailed schedules of the materials manufactured in May that were said to be subject to the vesting certificate upon payment within 14 days. An immediate meeting was requested if matters were not agreed. Mr Bowling for RFL accepted that the Carrier Rail System and Subframe were delivered in May 2022. As I shall go onto explain, the GRC Fins were in fact never delivered and the contract was terminated with the parties disagreeing as to the mode and timing of termination.
66. The invoices included one for £91,078.80 (ex Vat) for “Total Hanging system (rails and clasps)” and one for £102,463.65 (ex VAT) for Subframe. RFL’s order reference was given as 1223 “24.01.22/revised 16.03.22” and AlterEgo’s Order Acceptance was given as “S-5108 RFL 40ET Contract Value Summary 28.03.22”.
67. By email dated 9 June 2022, whilst denying “trying to dispute or not pay” RFL said it could not approve the invoices or make payment as the materials had not been vested (it was said the items had not been labelled correctly or delivered). As regards time for payment it said it had not agreed 14 days and could only agree what it had agreed with the contractor: namely 30 days.
68. According to the Adjudicator, RFL received a vesting certificate dated 14 June 2022 enabling it to obtain payment from the contractor. That vesting certificate, in terms, refers in paragraph 1.1 to “a supply contract between us”, AlterEgo and RFL, dated 31 January 2022.
69. By email dated 24 June 2022, RFL made various responses to various points raised by AlterEgo by email dated 22 June 2022, cumulating in a statement by AlterEgo that various matters needed to be agreed to enable production to be started by the manufacturer of further items.
70. The Adjudicator rejected each party’s case on contractual formation. He found that there was a contract, but that RFL was estopped by convention from denying an implied term into the contract for disputes to be referred to adjudication under the terms of the 1996 Act and the 1998 Scheme (see paragraphs 22 to 30).
71. As regards the contract itself, he found that it was formed on or around 24 January 2022 and that it was based upon the quote of 15 December 2021 (found by the Adjudicator to be an offer) and accepted by the issue of its purchase order by RFL on 24 January 2022 (see paragraphs 34 to 62 and especially paragraphs 57 and 62). He held that the conditions about payment of deposit and so forth in the Notes to the quotation of 15 December 2021 were waived by conduct.
72. As far as I can tell the submissions of AlterEgo at least has been slightly refined since the Adjudication.
73. In my judgment, and based on the documentary material that the parties have provided, the contract was not formed on 24 January 2022. The purchase order of 24 January 2022 was not an acceptance within the time period laid down by the 15 December 2021 quotation. First, it did not accept (or include) the subframe so there was no correspondence between the materials set out in the original quotation and the purchase order. Secondly, as at 24 January 2022, there was no waiver of the terms of the quotation. Initially RFL sent only a letter of intent. Its followed up with a purchase order, but that was in response to the intervening email from AlterEgo to the effect that an order number would be needed “to process order acceptance” (in other words, the purchase order would need to be the subject of an acceptance and would not itself be a partial acceptance of a (lapsed) quotation). Then AlterEgo issued the raft of documentation on 31 January 2022 which was clearly a new offer. That offer was then clearly accepted by conduct. The offer included the terms and conditions of AlterEgo put forward as the terms on which the offer was made and thus the adjudication provision. All further correspondence proceeded on the basis that the relevant terms of the contract were set out in the offer of 31 January 2022 even though there were negotiations about varying terms or including new terms.
74. I do not need to decide precisely when the contract was formed and whether or when the terms were varied but one obvious later variation is the inclusion of the subframe.
75. The acceptance of the offer is demonstrated by the payment of the deposit (in the context of all the surrounding contemporaneous correspondence) as invoiced and the delivery and acceptance of the rails (as well as the subframe, in the latter case under a variation). The suggestion that there was simply no concluded contract is, in my judgment, fanciful.
76. Although I disagree with the Adjudicator as to the precise offer and acceptance, I do agree with him that in terms of subsequent conduct after 31 January 2022 there was clearly a binding contract. He found that the acceptance was of the quotation of 15 December 2021. I find that it was acceptance of the terms offered on 31 January 2022, which of course incorporated the 15 December quotation in terms of the specification (for the goods, although at this stage the sub-frame was excluded) and the contractual prices initially agreed.
77. Turning to the detail of the submissions made to me by Mr Bowling, he makes a number of points.
78. The overall conclusion that he asks me to draw is that I cannot be satisfied to the summary judgment standard that the parties were doing anything other than negotiating and that no contract ever came into being.
79. As regards acceptance of what I have held to be AlterEgo’s offer of 31 January 2022, he says first that the only thing that was agreed was payment of a deposit to secure a price for the GRC Fins. As regards the deposit he says that this was paid on the terms of the RFL statement on 24 January 2022. However this is to ignore the subsequent correspondence (especially the 25 February 2022 email) and the deposit invoices themselves.
80. Secondly, he says that AlterEgo’s email of 25 February 2022 is relied upon by AlterEgo as giving it authority to proceed and gives reasons why by itself it was inadequate to demonstrate acceptance of an offer, however the point is that the deposit was subsequently paid confirming the authority to proceed in this email.
81. Thirdly, he says that the email of 14 April 2022, referring to AlterEgo’s appointment to the project is ambivalent. In context, it seems to me that it is far from ambivalent. It is notable that it had attached to it the same documents as were attached to the email of 31 January 2022.
82. Fourthly, he refers to the draft unsigned Advanced Payment Agreement circulated on 24 January 2022, but this is to ignore the later development on 19 April 2022 whereby RFL asked AlterEgo to sign a document confirming a contract between AlterEgo and RFL (see recital 2).
83. As a generality, Mr Bowling relied on the principle that just because work is done and money has been paid, it does not automatically follow that there is a contract (see e.g. Jarvis v Gailliard Homes [200] BLR 33 at [52]; The Aramis [1989] 1 Lloyds Rep 213). He also says that an individual exchange should not be separated from “the surrounding context and the continuum of the correspondence” (see Hussey v Horne-Payne (1878) 4 App Cas 311). I accept the general points that he makes as matter of general principle but, in my judgment, in this case I am construing the documents within their continuum and they show that a contract was formed, as I have concluded. I have not used the reasoning or approach that he says is incorrect.
84. Having construed the documents before the court, the question is whether disclosure and/or witness evidence would make any difference. Mr Bowling submitted that these matters held out a real prospect that the conclusion that I have drawn would be found to be incorrect. However, he was unable to point to any particular documents that might come to light or to any particular witness evidence that could be relied upon and on which a dispute might arise that could only be resolved on cross-examination. All he was able to point to was that the Adjudicator had a lot of witness statements which were not before me. I do not consider this to raise a defence with a real prospect of success.
85. It was for RFL to put before me any documents (to the extent that it was said the Adjudicator had been provided with them and I had not) or witness statements and to identify how those would throw light upon the issue before me such that there would be a real prospect of showing, on a trial, that there was no contract or, if there was a contract, that it did not include any adjudication provision. As regards this, the starting point was unpromising. Mr Seal appears to say that all relevant documents are before the court and he does not identify any separate areas of disputed points of factual evidence not covered by the documents.
86. As regards documents, there are clearly some gaps in the documents before me but both parties will have received or sent the relevant documents going between them. The question of contract will be based on such communications between them not internal ruminations of either party. Mr Bowling was unable to point to any further documents (even if lost) which might make a material difference in throwing light upon the issues that I am now considering.
87. As regards witness statements, none were put before me. In my judgment it was for RFL to do so if it wished to raise a case that there might be material oral evidence which could not be resolved without cross-examination and a trial. It is not enough for Mr Bowling to submit, as he did, that the Adjudicator had a lot of witness evidence before him that I do not have that would be relevant. He needed to go much further than that.
88. Having looked at the Adjudicator’s decision in more detail, I note that he had a number of witness statements before him. He considered that the defendant’s witness evidence, far from supporting a case that no contract had been formed (perhaps other than one regarding payment of a deposit to secure a specific price), supported the conclusion that a contract had been formed (see paragraphs 51, 52 and 61). It was not suggested that he had misread the evidence or that there was other relevant evidence that he had omitted to deal with in his decision
89. Not only, therefore, has the defendant failed to put before me any relevant witness evidence throwing light on the correspondence and raising a real prospect of its defence succeeding, the witness evidence it put before the adjudicator apparently did not support its case before him or me but rather supported a case that a contract had been formed.
90. I should add that it does not seem to me that the witness evidence as recorded by the Adjudicator, supports a case or raises a real prospect that the contract did not contain the adjudication clause that I have found to be incorporated.
91. Accordingly, I find that there is no real prospect of the Defendant successfully making out, at trial, its defence that the Adjudicator lacked jurisdiction to proceed with the adjudication on the basis that there was no contract between the parties and/or no contract containing an adjudication provision.
92. I understood it to be common ground that in the event that I held that there was a contract between the parties containing the adjudication clause in the terms of Clause 13 of AlterEgo’s Standard Terms then Part 1 of the Scheme for Construction Contracts (England and Wales) Regulations 1999 would apply (the “Scheme”).
93. Paragraph 1 of Part 1 of the Scheme provides for a party to give written notice of his intention to refer any dispute arising under the contract to adjudication (referred to as a “Notice of Adjudication”).
94. Paragraph 1(3) goes on to provide that the notice of adjudication “shall set out briefly” four matters. In this case, RFL says that the NOI fails adequately to set out three of those four matters: namely, (1) the nature and a brief description of the dispute…” ; (2) details of where and when the dispute arose and (3) the nature of the redress that is sought.
95. It was common ground that if the NOI is sufficiently defective in failing to comply with paragraph (1)(3) of the Scheme then the whole adjudication process is a nullity and relevant shortcomings in the notice of adjudication cannot be put right in the Referral (see Coulson on Construction Adjudication at 4-19 to 4.31 and especially 4.20). This statement has to be read subject to an important caveat. If there is no reference at all to (for example) where and when the dispute arose or to any redress sought then the Notice to Adjudicate will be inadequate and any following adjudication will be without jurisdiction. However, if there is set out the nature and brief description of the dispute and the relief sought, an issue then may arise as to whether a particular decision on a particular point (or indeed the decision as a whole) is outside the terms of the Notice of Adjudication. In that event, the Notice of Adjudication will not be a nullity: instead the relevant decision may be a nullity as being a determination made without jurisdiction to do so.
96. Although I was only referred to it indirectly by reference to Coulson on Construction Adjudication, it seems to me helpful to set out the summary of Carr J (as she then was) in Stellite Construction Limited v Vascroft Contractors Limited [2016] EWHC 792 (TCC). In paragraphs [48] to [51] she said as follows:
97. In my judgment, it will be rare that a Notice of Adjudication will be “knocked out” as being defective, and any ensuing adjudication in its entirety ruled to be a nullity, simply as a result of looking at the Notice alone, unless there is something obviously missing (e.g. the names and addresses of the parties). In the case of complaints that the nature of the dispute is not adequately described, it seems to me that any challenge is best approached from identifying the particular issue or dispute that is said not to fall within the notice of adjudication, considering what the Adjudicator decided and then considering whether or not the dispute and decision does fit within the notice of adjudication, in the sense that the notice gave the adjudicator jurisdiction to decide the same, or not. In other words, following the process set out by Carr J in paragraph [52] of the Stellite case. If a particular decision is one made without jurisdiction, then a further question of severability may arise.
98. The Notice of Adjudication in this case contained the following information:
99. Paragraph 6 referred to the total sum said to be due and owing.
100. Under the heading “Where and when the dispute has arisen”, paragraph 7 said that the dispute had arisen following the submission of the Letter of Claim, RFL’s submission of the Letter of Response, subsequent correspondence between the parties and RFLs express or implied refusal to pay the sums claimed.
101. Clause 8 set out the names and addresses of the parties.
102. As regards the nature of the redress sought, paragraph 9 invited the Adjudicator to produce a decision as followed, namely:
103. In my judgment, the Notice of Adjudication was valid and the entire adjudication does not fall on the ground that, on its face, it did not identify sufficiently the relevant matters set out in paragraph 1(3) of the Scheme.
104. In Mr Bowling’s skeleton argument he did not in terms engage with the basis for submitting that the Notice of Adjudication failed to explain where and when the dispute arose. In my judgment, this is entirely adequately dealt with by paragraph 7 of the Notice of Adjudication.
105. As regards the requirement that the notice should briefly identify the “nature and a brief description of the dispute”, the Notice of Adjudication referred to the refusal to pay the five heads of claim under the identified contract. In my judgment, leaving aside for the moment what disputes those matters covered, I consider that this was an adequate manner of setting out in brief the nature and a brief description of the dispute. Mr Bowling submitted that an analysis of the claims set out in the letter of claim and then as supplemented by the Referral Response, Reply and Rejoinder was that the claim was for (amongst other things) “a termination account and/or common law damages for RFL’s repudiatory breach alleged to have been accepted by [AlterEgo] on or about 20 February 2023″, and that this is not made clear in the Notice of Referral. However, he goes on to assert that the Adjudicator did not decide these matters in any event. If this is correct, this demonstrates the need to analyse the matter by reference to the decision that the Adjudicator actually reached and to consider whether he had jurisdiction to do so. It does not appear to me to be productive to consider the hypothetical question of whether a decision on one or more issues that were raised before, but not decided upon by, the adjudicator would have been outside the scope of the Notice to Adjudicate.
106. As regards the requirement to set out briefly the redress sought, it again seems to me that paragraphs 5 and 9 are adequate to meet the requirements of paragraph 1(3) of the Scheme, to get an adjudication “off the ground”.
107. Finally, I should say that if I am wrong with regard to the adequacy, as a general matter, of the NOI on the basis that I have identified, and standing completely alone, then it seems to me that the Notice of Adjudication would have to be read together with the Letter of Claim being a document referred to in the Notice of Adjudication. Mr Bowling accepted that if this letter had been annexed to the Notice of Adjudication his point on the Notice of Adjudication being invalid for want of compliance with paragraph 1(3) of the Scheme would have fallen away. I have some concerns as to whether the Notice could be said to “briefly” set out the relevant matters in such a scenario but given this concession, it seems to me to follow that Mr Bowling’s general objection to the Notice of Adjudication falls away. In my judgment the Letter of Claim is incorporated by reference in paragraph 9 of the Notice of Adjudication, even if it is not incorporated by the earlier references to it in the Notice.
108. As regards incorporation of documents into a notice of adjudication, the Adjudicator, in his non-binding decision, considered that the Letter of Claim was incorporated and cited Grove Developments Ltd v S&T (UK) Limited [2018] EWHC 123 (TCC) in support of his conclusion. I was not addressed on this authority in this context and say no more about it.
109. In substance, RFL complains that the Adjudicator decided a matter that had not been referred to him and was therefore outside his jurisdiction and that he did so also in breach of the rules of natural justice. It is necessary to go into the facts in a little more detail.
110. I have set out the key facts until about May 2022 above. Although the Adjudicator came to a different view to the one that I have reached about the formation of the contract between the parties, he determined that there was a contract and that under the contract AlterEgo was obliged to supply, and RFL to accept and pay for, the GRC Fins. In fact, the GRC Fins were never supplied and AlterEgo raised claims based on that non-supply, which it said resulted from a repudiatory breach of contract by RFL in seeking to cancel the order for the same.
111. During the reminder of 2022, RFL made various requests to AlterEgo to hold off on production of the GRC Fins.
112. On or about 9 January 2023, RFL agreed to certain price increases (resulting from the delays) and submitted a revised purchase order 1223 showing all the components at a combined price (ex VAT) of some £962,337.88.
113. On 30 January 2023, RFL emailed AlterEgo enclosing a revised purchase order 1223 dated 9 January 2023. The revised purchase order in effect omitted the GRC fins and was for only the hanging system and the subframe. The order showed a total price (ex VAT) of £193,542.45. By reply AlterEgo sought confirmation that in amending the order to remove the GRC fins, RFL was terminating the remainder of the order. In the event that AlterEgo did not hear within 7 days it said that it would treat the email of 30 January as such termination.
114. Following further correspondence, by email dated 10 February 2023, AlterEgo asserted that the removal of the GRC fins from the order constituted a material breach of contract and, under clause 9.1 of its terms and conditions, it gave RFL 7 days to confirm that it wished to proceed with the full order including the GRC fins, failing which it would have no choice but to terminate the contract.
115. By letter dated 20 February 2023 from its solicitors, Hay & Kilner LLP, AlterEgo gave notice that the contract had been terminated in accordance with clause 9.1, alternatively that the repudiatory breach was thereby accepted.
116. In its Letter of Claim, dated 27 March 2023, AlterEgo dealt with the first four heads of claims for loss and damage. Two of the claims are relevant for present purposes. Under the heading “unpaid contract works”, AlterEgo claimed £53,629.53 (ex VAT) being the value of the goods and services supplied up to the date of termination. The letter enclosed a spreadsheet breakdown of the sums in question and an invoice for the same. Separately, there was a claim under the heading “loss of profit” which was a claim under clause 9.2.1 of the AlterEgo Standard Terms for loss of profit on goods and services remaining to be performed at the date of termination £132,207.89. Again this was backed up by a Schedule. Towards the end of the letter, the Claim was summarised as being for a sum of a little over £292,952 “being the loss and damage particularised above”, alternatively damages for breach of contract and various other heads of relief. The sum of just over £292,000 included the two quantified sums of just over £53,600 and £132,000 that I have referred to above under the two heads of claim.
117. Among other things, the Letter of Response, asserted that if there was a contract and if AlterEgo’s Standard Terms applied (both of which it denied) then clauses 3.5 and 4.2 of the same (dealing with remeasurement) permitted RFL to omit the GRC Fins from the contract. It also asserted that any repudiatory breach had been waived/lost “not least by service of the notices alleging material breach instead.”
118. I have dealt with the NOI above. In paragraph 9 the redress sought was set out as follows:
119. In the Referral Document, among other things, AlterEgo asserted that:
120. The Response of RFL, asserted, among other things:
121. On 7 July 2023, the Adjudicator gave his non-binding views on the jurisdictional challenges that RFL had raised. Among other points:-
122. On 14 July 2023, the Adjudicator issued supplemental non-binding views on jurisdiction. In a number of places he referred to the issue of the terms and conditions which might apply to the contract in question. For example;
123. The Reply to Response (dated 18 July 2023) and the Rejoinder (dated 20 July) repeated the parties’ previous positions with more detail but did not deal with the position were the Adjudicator to find the contract to be one that was not governed by the AlterEgo Standard Terms.
124. It seems to me therefore that the jurisdiction conferred on the adjudicator included (a) determining whether there was a contract and its terms so far as relevant to the claims made arising from the attempted cancellation of the order for GRC Fins; (b) whether the terms of the contract, as found, permitted RFL to cancel the Order for Fins without being in contract and (c) if they did not, whether either by way of debt/liquidated sum or by way of damages for breach of contract, the Claimant was entitled to sums and what those sums were. Although the Claimant was founding its case as to quantum on the contractual provisions under the AlterEgo Standard Terms, it does not seem to me that as a matter of jurisdiction the Adjudicator was bound by that, subject to, as I shall explain, questions of natural justice.
125. The next development is explained in the Adjudicator’s decision and it is easiest if I simply set out the relevant paragraphs (or parts thereof) of his decision:
126. The Adjudicator, having then set out his analysis, concluded that:
127. Accordingly this encompassed any claim for loss of profit and also (see paragraphs 72 to 73) for unpaid contract works.
128. I should also note that the request for submissions was made on 27 July 2023, the day before the Adjudicator gave his decision and that the submissions were delivered on the day that the Adjudicator made his decision. Mr Bowling described this as being “at the 58^th minute of the 11^th hour”.
129. I summarised in paragraph 124 above, the matters that I consider that the Adjudicator had jurisdiction to decide. In my judgment, the above decision as summarised by me fell within his jurisdiction.
130. Mr Bowling submitted that the dispute of which the Adjudicator was seized was of a claim to damages based on a termination account. I do not agree with that analysis. It seems to me that he was seized of a claim to relief flowing from an alleged breach of contract by RFL in “cancelling” the GRC Fin order and that as regards relief it was to a liquidated sum due under the contract (sounding in debt as evidenced by the invoice AlterEgo in fact issued) further or in the alternative a damages claim. Accordingly, I reject the submission that the Adjudicator exceeded his jurisdiction.
131. I also reject a separate submission which is that the Adjudicator failed to exhaust jurisdiction because he did not decide issues referred to him. First, having come to the conclusion that he did with regard to an entitlement to the contractual price which he held had been agreed, the Adjudicator decided that he did not need to decide the quantum claim to a price for goods up to the date of the termination. That claim was, as he held, encompassed by the award to the full contractual price. He did therefore deal with it and decide that there should be no double counting. The same is true of the claim to damages for loss of profit. In effect, the award that he made encompassed any losses in that respect and he did not need to deal with it separately. It seems to me that in this respect the Adjudicator is in no different position to a Judge who, in deciding a case, may well come to the conclusion that it is unnecessary to consider certain claims or arguments in the light of her decision on other points.
132. Accordingly, I do not consider that RFL has a real prospect of establishing at trial that the Adjudicator exceeded his jurisdiction in any relevant respect.
133. That leaves the question of whether the Adjudicator failed correctly to apply the principles of natural justice in taking the course he did of putting a new way of analysing the quantum entitlement of AlterEgo as a result of breach of the contract by RFL in changing the order and , in effect, refusing to take the GRC Fins.
134. I was not addressed at any length on authority on this point. For present purposes, I have considered the helpful summary of Carr J in the Stellite case (supra). It suffices to set out paragraphs [58], [59], and
135. I have also considered and taken account of the useful summary of earlier cases set out in the judgment of HH Judge Kramer (sitting as a Judge of the King’s Bench Division) in J A Ball (in administration) v St Philips Homes (Courthaulds) Ltd (3 February 2022).
136. Here, it seems to me, the position is that the parties were given ample opportunity to deal with the point raised by the Adjudicator (and then adopted by AlterEgo) and that each party duly took advantage of the opportunity offered.
137. I am not impressed by the point made by Mr Bowling about timing. If RFL had needed more time to reply to the request it could have said so. It does not appear to have done so. The fact that the Adjudicator then so swiftly afterwards delivered his decision is to be commended but does not reflect on whether the period between notification of the issue was made and the time within which RFL lodged its response. Finally on this point, there is no evidence by way of witness statement or otherwise as to any difficulties in responding to the Adjudicator within the period requested, as RFL duly did.
138. I am also not impressed by the submission that somehow RFL did not appreciate the point that the Adjudicator was raising and its consequences. The case that the Adjudicator provided is comparatively short and the point obvious to any competent lawyer. Furthermore, there is simply no evidence put forward of any such absence of understanding.
139. It follows that I do not consider that there is any real prospect of RFL establishing at trial that there was any relevant breach of natural justice.
140. For completeness, I should also add that Mr Bowling submits that the Adjudicator erred in law in his reliance on the SWI Ltd case. That is not a matter that goes to whether summary judgment should be given in relation to the decision and to be fair Mr Bowling did not suggest that it does. That is relevant to the separate Part 8 Claim brought by RFL.
141. RFL says that AlterEgo is seeking to approbate the Adjudicator’s decision, in relying on his decision in its favour based upon the contract between the parties as he found it, whilst also seeking to reprobate the decision by rejecting his decision as to the contract which applied and setting up its own, in order to establish the adjudicator’s jurisdiction. This, it is submitted for RFL, is not permitted.
142. In my judgment, the starting point can be taken to be the decision of Stuart-Smith J (as he then was) in RMP Construction Services Ltd v Chalcroft Ltd [2015] EWHC 3737 (TCC) especially at [44]-[45], [50] and [52]-[53].
143. In the RMP case there was a dispute as to the precise basis of the contract. Whichever contractual analysis put forward by the parties was correct, the adjudicator had jurisdiction. However, the different contractual interpretations put forward could have led to different substantive outcomes. The Judge found that the Adjudicator had jurisdiction because under whatever contractual terms applied on the facts, they mandated the use of the Scheme and the adjudicator was properly appointed. Once that point was reached then the legal policy and authority underlying how the grant of summary judgment on the decision of Adjudicators was to be applied (that is, where the basis of challenge was limited e.g. to absence/excess of jurisdiction or breach of natural justice) had the consequence that any substantive differences in result that might flow from the differences between the contractual arrangements in play would at most involve an error of law by the adjudicator if he referred to the wrong contractual provisions in reaching his conclusion.
144. The key parts of the judgment of Stuart Smith J are as follows:
145. In this case, the only distinction is that the certainty as to the contract resulting in there being jurisdiction in the adjudicator flows not from the fact that there are two alternative contractual arrangements and under either of them there is jurisdiction but that I have determined as a matter of summary judgment that the applicable contract does have an adjudication clause in it. I do not consider that that makes any material difference to the applicable principle.
146. Once that jurisdiction is established it seems to me that it is not a matter of AlterEgo blowing “hot and cold”, as it is put. Rather, it is simply taking advantage of its right to adjudication and the applicable principles regarding summary enforcement of the same. Put more formally in the language of Banque Des Marchands de Moscou v Kindersley [1952] Ch 112 (referred to in Purton v Killer [2015] EWHC 2624 (TCC) as set out in Stuart-Smith’s judgment at [41]), AlterEgo has not made an election from which it cannot resile. It has elected as to which contract it says applies to the issue of jurisdiction (which ultimately the Adjudicator cannot rule on definitively). However, it has not elected that contract for the purposes of the decision of the Adjudicator. It accepts the point that the Adjudicator may make errors of law which will bind the parties on an interim basis as a result of the adjudication and relies on the decision as it is entitled to do. The adjudication is not a final determination of the rights of AlterEgo and RFL. AlterEgo accepts that ultimately liability (and quantum) will be determined finally under a separate process.
147. Finally, I should add that the only material difference in the terms and conditions between the contract as found by me and as found by the Adjudicator was, so Mr Bowling informed me, one of applicable interest rate, but AlterEgo accepts for present purposes of enforcing the Adjudicator’s decision the lower interest rate that he applied and does not seek to substitute the higher rate that would apply under the AlterEgo Standard Terms which I have found to apply. In my judgment there may well be other differences but AlterEgo is content, by way of enforcement of the interim decision, to take the interim decision as it stands.
148. Accordingly I find that there is no real prospect of the principle of approbation and reprobation applying so as to prevent enforcement of the adjudicator’s decision.
149. It follows that I grant AlterEgo summary judgment.
150. The question of the form of order, any consequential matters (including permission to appeal) and the interrelationship between this decision and the outstanding Part 8 Claim brought by RFL will have to be dealt with at a further hearing. I also extend the time for filing a notice of appeal so that the relevant 21 day period otherwise provided for runs from the day on which the order referred to in the next paragraph is sealed or further order in the meantime.
151. I accordingly order that the parties shall liaise with the court in providing dates of availability for a further hearing with an agreed estimate which they must supply the court by 4pm on Friday 8 December 2023, in the first instance by reference to the window of 15 December 2023 to 15 March 2024. They should also lodge a draft form of order dealing with this and the preceding paragraph and setting out agreed directions for lodging of any supplementary bundles and further Skeleton arguments by 4pm on Friday 8 December 2023.

Note 1       [Back]

Note 2   [2002] BLR 288.    [Back]

Note 3   [2013] EWHC 3417 (TCC).    [Back]

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