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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> The Vinden Partnership Ltd v Orca LGS Solutions Ltd & Anor [2017] EWHC B24 (TCC) (26 July 2017) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2017/B24.html Cite as: [2017] EWHC B24 (TCC)

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IN THE HIGH COURT OF JUSTICE
MANCHESTER DISTRICT REGISTRY
TECHNOLOGY AND CONSTRUCTION COURT

		Manchester Civil Justice Centre 1 Bridge Street West Manchester M60 9DJ
		26/07/2017

 


HIS HONOUR JUDGE DAVIES :

1. In this case the claimant is the company through which the well-known adjudicator, Mr Peter Vinden, provides his services as such. The company has issued this claim to recover payment of fees in the sum of £32,842.50 plus VAT for acting as an adjudicator from 19^th Jan 2017, when he was appointed, to 16^th March 2017 when he produced his decision. The claim was issued against both parties to the adjudication: the first defendant, ORCA for short, as the referring party and the second defendant, Stourport, for short, as the responding party.
2. The claimant has also issued an application for summary judgment alternatively for payment of an assessed sum alternatively for an interim payment, which is the application before me today. The application is only live today as against ORCA since Stourport has given notice of acceptance of a Part 36 Offer made by the claimant. The claimant has been represented today by Mr Kaplan of counsel and the first defendant by Ms Todd of counsel and I am grateful to them both for the high quality of their written and oral submissions. I have also had the benefit of the witness statement of Mr Vinden in support of the application and the witness statement of ORCA's solicitor, Mr Kevin Anderson, in response.
3. I should begin by saying that it is common ground that the claimant's appointment was subject to standard terms of appointment which are referred to in the statements of case; in particular specific provision is made for the claimant to charge for Mr Vinden's time at a rate of £285 per hour. There is also a provision for the claimant to recover payment of his time expended in pursuing unpaid fees at the same rate. It is provided that each party should be jointly and severally liable for payment of all charges and also that the parties should be jointly and severally liable for payment of the legal costs and expenses incurred in pursuing payment of outstanding fees. There is also a provision for interest at 8% over RBS base to be paid on outstanding fees.
4. So far as the law is concerned, there is a very helpful decision of his Honour Judge Waksman QC, sitting as a judge of the High Court, in the case of Fenice Investments Inc v Jerram Falkus Construction Limited [2011] EWHC 1678 (TCC). In that case the facts were of some similarity to this case in that the dispute was as to whether or not the adjudicator was entitled to payment of his fees without consideration of their reasonableness and, if not, how the question of reasonableness should be resolved.
5. His Honour Judge Waksman concluded that it was not open to the claimant to recover the fees in full on the basis that their reasonableness was irrelevant and I consider, with respect to him, his decision to be entirely right in that respect for the reasons he gave.
6. In this case Mr Kaplan ingeniously sought to avoid that result by arguing that there was an express provision in the contract for payment of charges without qualification by reference to their reasonableness so that the requirements for implying a term of reasonableness were not met. However, I prefer the approach of Judge Waksman, supported by Ms Todd, to the effect that in a case like this, it would take very clear words indeed to exclude the implied obligation that the fees charged should be reasonable in all of the circumstances.
7. I also respectfully consider Judge Waksman to be correct in saying, as he did, that where reasonableness is in issue then insofar as the adjudicator has provided details of his time spent, as he had there and as he has here, there is an evidential burden on the defendant to make out a prima facie case for unreasonableness and that the court should adopt a robust approach to this question, allowing the adjudicator a considerable margin of appreciation, given the circumstances in which adjudicators have to work; namely working at speed and under pressure from the parties in circumstances trying very hard to get it right in often challenging circumstances in a way which is as fair to both parties as can reasonably be expected. I take the view that the court should be careful against considering the reasonableness of the time taken by reference only to the bare bones of the decision rather than the process which led to that result or with the generous benefits of hindsight.
8. Judge Waksman also observed that where it was said, as it is in this case, that the work done was unreasonable, or took an unreasonably long time, the adjudicator is given considerable discretion by the Scheme as to the procedure to be adopted and is also entitled to decide such matters as he or she considers necessary to decide in order to determine the dispute. Again the adjudicator should be given a considerable degree of latitude ion making those decisions. So far as the time taken is concerned, the adjudicator is entitled, within reasonable limits, to decide for himself or herself how long he or she reasonably needs to deal with everything so as to produce what he or she is satisfied is a proper decision.
9. Judge Waksman also went on to address how, in practice, such disputes would be resolved. He observed correctly, if I may say so, that the test for summary judgment is whether there was a real prospect of showing that the fees were unreasonable but he went on to observe that even if summary judgment was not appropriate the court could and would be expected to adopt a time and cost-effective way to resolving such disputes because, in a case such as this, where the court has the benefit of the adjudicator's time records and the underlying documentation and where the application comes before a TCC Judge, it is in a position to determine what is reasonable without needing disclosure as such; without needing witness statements beyond those already provided for the summary judgment application; without needing cross-examination; and without needing expert evidence from an adjudicator or construction progressional as to what they may think is or ought to be a reasonable amount of time to take. I note that that approach was considered by Sir Peter Coulson in his textbook 'Construction Adjudication' (Third Edition), where he specifically endorsed that approach, and I follow it in this case.
10. The position here is that the dispute which was referred was a dispute under a subcontract for the provision of a light steel gauge frame and ancillary works at a new care home. The claim that was being made was a claim for what was said to be due under Interim Application number 12 and sought, effectively, a determination by the adjudicator of what was properly due under that Interim Application. The referral notice indicated that the amount in dispute was just over £600,000. It is not quite clear from the documentation whether or not that was actually what was in issue in terms of the claim or whether or not it also took into account certain items which had already been deducted, however on any view it was a relatively substantial claim.
11. Also, as can be seen from the referral notice, there were seven separate heads of dispute; firstly, a challenge to liquidated damaged deducted by Stourport, in a sum of just under £280,000; secondly £150,000 or thereabouts in relation to disputed variations comprising 17 separate items; thirdly, a number of individual disputes as to the valuation of certain items of work, including certain contested deductions; and there were also claims for the cost of producing calculations and design fees and for installation costs.
12. I accept the way in which Mr Kaplan put it in his skeleton argument, that it was a multifaceted dispute with issues of law, fact and quantum involved. I have already referred to the fact that Mr Vinden has produced his adjudication time record or log which comprises a series of entries by date, a summary description of the work done and the time taken. It was suggested that the time taken was unreliable because it was always divided into complete hours or quarter or half hours; however, Mr Vinden in his evidence addressed this point and explained that the work was done on a 15-minute recording basis. I have no reason not to accept his evidence in that regard.
13. In addition to the referral notice itself, which ran to 53 pages, it was supported by two witness statements and three lever-arch files of supporting documents. It is also worth noting that it was couched, in some respects, in strong terms and contained repeated allegations of bad faith against the other party which Mr Vinden clearly could not simply have ignored, however much he might have wished to do so.
14. It is said by Mr Anderson in his witness statement that the time taken for considering the referral notice, dealing with the time for a response, dealing with the address for service and the timetable, 3.7 hours, was unreasonable. It does not seem to me that there is any basis for criticising that amount of time in considering what, on any view, was a substantial document and dealing with the administrative minutiae of getting the adjudication off the ground.
15. What happened next was that the responding party raised jurisdictional issues. They were summarised in the decision at Section 8 and Mr Vinden explains in his witness statement that he considered them to be matters which he had to deal with so that he dealt with them and he took some time to do so. In my judgement that approach cannot be faulted; it is clearly in the interests of everyone, not least the referring party, to ensure that if there is a dispute as to jurisdiction it is properly addressed by the adjudicator so that if the adjudication proceeds it is on the basis that there can be some confidence that it will not subsequently be derailed by successful jurisdictional challenge.
16. Ms Todd has taken me with some care through the contemporaneous emails with a view to seeking to demonstrate that there is some doubt as to the time recorded by Mr Vinden in dealing with these jurisdictional questions. In particular, she submits that if one looks at the times when emails were sent and responded to it simply could not have taken the time which Mr Vinden has recorded. Mr Kaplan ripostes that this assumes that the only time taken is limited to that between the receipt and reply of the emails whereas, in reality it was reasonable for Mr Vinden to be researching and considering the issues outside of the narrow confines of those time limits. I agree and I am satisfied that the time taken in total, eight hours, to consider and address and deal with those jurisdictional challenges cannot in any way be seen as unreasonable.
17. There was then a response which ran to three volumes and was supported by two witness statements and included a detailed analysis of the programme and the reasons for delay. There was then a reply which ran to 27 pages, was supported by two further witness statements and contained a further ring binder of supporting documents. There was then a meeting which lasted some eight hours and for which Mr Vinden produced an agenda where a number of the issues were investigated in some detail.
18. There was some criticism made by Mr Anderson in his witness statement of the time taken to prepare for the meeting, given the time already taken to read into the referral notice and a response to the reply. I am satisfied that the time was entirely reasonable. An adjudicator cannot be criticised for spending a reasonable amount of time reading in again before an important meeting such as this. It cannot simply be said: 'You do not need to do any preparation because you have already read the documents once.' Indeed, I note by way of observation that ORCA has not voluntarily disclosed its own solicitors' timed costs for preparation for that site meeting and frankly, I have no doubt that if they had, they would have revealed that they had taken precisely the same amount of time, if not more, in preparing for that site meeting.
19. There was then also a site visit about which complaint is made. The complaint is that, effectively, it was unnecessary; it was a waste of time and cost and there is no reason why the parties should have to bear Mr Vinden's costs of that visit. However, Mr Vinden addresses that in his evidence. He makes it clear that the responding party was insistent that there should be a site visit in order that the adjudicator could see for himself the amount of work which had been done and the extent to which certain disputed items were complete; and that he took the view that although it was not his normal practice to have a site visit on a disputed interim valuation claim it was sensible to accede to the responding party's request in circumstances where otherwise there might be a complaint of breach of natural justice. He also said that, in the end, he found it a useful exercise, as indeed can be seen from his decision where he referred on a number of occasions to what he had observed at the site visit which helped him in reaching his conclusions.
20. Reference was made by Ms Todd to a decision of Mr Justice Coulson in the case of Wycombe Demolition Ltd v Topevent Ltd [2015] EWHC 2692 (TCC), where the judge was dealing with an adjudication enforcement application. In paragraph 23 of that judgment, in the context of a challenge of breach of natural duty in failing to hold a site visit, Mr Justice Coulson said that in his view this objection was hopeless. He observed that the procedure of the adjudication, including whether or not there should be a site visit, was a matter uniquely for the adjudicator and that it was up to him or her to decide what he or she needs in order to reach that decision.
21. In my view that applies both ways and it does not seem to me to be realistically possible to criticise the adjudicator, who was having to deal with the case on the ground, with strong submissions and arguments raised on both sides, for taking the view that the sensible course was to agree to a site visit.
22. After that, there was then a rejoinder which ran to 22 pages with two further witness statements and eight appendices, followed by a surrejoinder which ran to 27 pages with one bundle of further supporting documents. There is criticism of the adjudicator in allowing these further exchanges but again I accept Mr Vinden's explanation that he considered it necessary in the circumstances to allow the responding party to respond to the reply and I cannot see any reasonable grounds for criticism of that. It is difficult to see how ORCA can complain about being allowed to put in a surrejoinder when that is what it asked to do, although Mr Anderson complains that, effectively, it was an unnecessary waste of time because there was nothing new in the rejoinder. The answer to that, it seems to me, is that if that really was the case the surrejoinder could have been confined to one page, which would not have required the adjudicator to spend the time which he did in reading it, rather than extending to 27 pages.
23. In the course of the adjudication there was copious correspondence; including dealing with requests for extensions of time. I accept that the extensions of time in themselves do not demonstrate complexity, but they are consistent with the complexity of the case which is already apparent from the exchanges to which I have referred. I also accept that in the course of an adjudication like this, lasting 58 days, an adjudicator will inevitably take a fair amount of time in administratively managing the process, which cannot simply be delegated to administrative support staff.
24. The decision itself ran to 64 pages with an accompanying quantum breakdown. It was, as the parties requested, a reasoned decision. It is said by Mr Anderson that the time taken to produce it was excessive in the context of the time already taken to read in to the adjudication, to hold a meeting and attend a site visit and the like. However it seems to me that at this stage the adjudicator has to take time and effort to get the decision right. He has to look at everything with a clear and dispassionate eye and he has to address all of the arguments on an issue by issue basis. It would be wrong, in my view, simply to look at the finished product and to conclude that it could effectively have been dictated in one go. It seems to me that the detail and complexity of the adjudication entirely justified the amount of time which was taken and I see no basis for criticising that either.
25. Overall, I accept the evidence of Mr Vinden that the totality of the time which was taken was reasonable and was proportionate to the value and to the complexity of the claim. I do, as I should, have regard to that evidence coming as it does from someone who is a well-known and well-respected and experienced adjudicator. In this case the total number of hours taken, 114.5 hours, and the total costs claimed, just under £33,000 plus VAT, standing back, do not seem to me to be in any way obviously unreasonable in the context of this sort of case and this sort of dispute.
26. In those circumstances I am satisfied that the first defendant has not surmounted the evidential burden of showing that there is a real prospect of defending this claim on the basis that the fees claimed are unreasonable. If I was wrong about that, I would have had to consider what to do about the claimant's invitation that I should assess the costs today. In short, I would have accepted that invitation. I am satisfied that there can be no real basis for an argument that I should put it back to another day to enable there to be disclosure, witness statements and possibly even expert evidence in circumstances where, as I have said, I am satisfied that it would be unnecessary and disproportionate to do so.
27. It follows from what I have already said that, having gone through the exercise for the purposes of the summary judgment application, I would have reached the same view in relation to that assessment exercise. Thus, I would have assessed the claim as claimed on the basis of an assessment of those amounts. In those circumstances there is no need for me to consider the alternative application for an interim payment.
28. The claimant also claims for the cost of his own time in pursuing this case, which is supported by a log. I have seen and considered the log and it seems to me that the total claim of 10.7 hours is entirely reasonable and there is no basis for not allowing that as a contractual claim. So far as the costs are concerned, I will deal with the assessment of those costs on a summary assessment basis today.
29. So far as interest is concerned, again that is a contractual entitlement in accordance the Late Payment of Commercial Debts Act and there is no basis for opposing that claim. Therefore the end result is that I am satisfied that there should be a summary judgment for the full claim.