Elements (Europe) Limited v FK Building Limited
[2023] EWHC 726 (TCC)
A & V Building Solutions Limited v J & B Hopkins Limited
27 January 2023
[2023] EWCA Civ 54
Court of Appeal
Two construction companies fought over money. A judge ruled against one company because they were a day late with paperwork, ignoring an earlier ruling that said they should get the money. The appeals court said the judge was wrong to be so strict about the date, and that the other company had implied they accepted the late paperwork. However, a second ruling made the whole argument pointless.
Key Facts
- •A & V Building Solutions Limited (AVB) and J & B Hopkins Limited (JBH) entered into a sub-contract for mechanical and electrical works.
- •AVB submitted interim payment application 14 on a Sunday, which was one day late according to the sub-contract.
- •A first adjudication favored AVB, but JBH didn't pay. JBH then initiated Part 8 proceedings seeking declarations on the validity of application 14.
- •The High Court judge found application 14 invalid due to the late submission, disregarding the first adjudication's decision.
- •A second adjudication favored JBH, resulting in AVB owing JBH a sum of money.
Legal Principles
Construction adjudication follows a 'pay now, argue later' principle.
Carillion Construction Limited v Devonport Royal Dockyard Limited [2005] EWCA Civ 1358
Parallel court proceedings during adjudication are permissible but should not circumvent it.
Various TCC cases cited in sections 36-40
Contractual interpretation requires considering the entire contract and prioritizing specific over general provisions if conflict arises.
Rainy Sky SA v Kookmin Bank [2011] UK SC50; Arnold v Britton [2015] UK SC36; Wood v Capita Insurance Services [2017] UK SC24; Merthyr (South Wales) Limited v Merthyr Tydfil County Borough Council [2019] EWCA Civ 526; Woodford Land Limited v Persimmon Homes Limited [2011] EWHC 984 (Ch)
A single instance of accepting a late payment application does not automatically constitute a waiver.
Grove Developments Ltd v Balfour Beatty Regional Construction Ltd [2016] EWHC 168 (TCC); Kersfield; Leeds City Council v Waco UK Limited [2015] EWHC 1400 (TCC)
Estoppel may arise if one party unequivocally represents a fact, the other party relies on it, and it would be inequitable to go back on the representation.
Relevant sections discussing estoppel in relation to the parties' treatment of Application 14
Outcomes
Ground 1 (abuse of process) dismissed.
Part 8 proceedings, while potentially costly and inefficient, were not inherently improper.
Ground 3 (validity of application 14) allowed.
The court interpreted the sub-contract to allow flexibility in submission dates, finding application 14 timely based on Appendix 6.
Ground 4 (variation/waiver/estoppel) partially allowed.
The prior event did not establish a waiver, but JBH's treatment of application 14 created an estoppel.
Declarations a) and c) of the judge's order quashed.
Application 14 was deemed valid, thus overturning the judge's finding that it was invalid and that AVB was not entitled to payment.
No further orders made.
The appeal became academic due to the second adjudication's outcome.
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