Bellway Homes Limited v Surgo Construction Limited
[2024] EWHC 10 (TCC)
Shaylor Group Limited v Valescure Property Limited
4 April 2024
[2024] EWHC 750 (TCC)
High Court
A contractor sued a bankrupt building owner because an official didn't calculate the money owed correctly. Even though the official was wrong, the judge refused to give the contractor more money. This was because the owner had no money to fight back, and giving the contractor more money would be unfair.
Key Facts
- •Shaylor Group Ltd (in administration) claimed against Valescure Property Ltd (in liquidation) for declarations that an adjudicator erred in calculating the amount due under a construction contract.
- •The contract involved building 157 apartments; the claimant was the contractor, and the defendant was the employer.
- •The adjudicator awarded £9,369,927 to the claimant; the claimant argued it should have been £20,277,563.57.
- •The defendant went into liquidation before the claim was brought; permission was granted to bring the claim under section 130 of the Insolvency Act 1986.
- •The defendant assigned its rights and obligations under the contract to Grainger plc before the first adjudication.
- •Two adjudications took place, with differing outcomes and interpretations of the contract's termination clauses (clauses 8.7 and 8.8).
- •The dispute centered on the interpretation of clause 8.7.4.3, concerning the 'total amount which would have been payable for the Works'.
Legal Principles
Interpretation of contracts – focus on natural and ordinary meaning, considering commercial context and purpose.
Wood v. Capita Insurance Services Ltd [2017] AC 1173, Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, Chartbrook Ltd v. Persimmon Homes Ltd [2009] 1 AC 1101
Adjudication – the court's power to review adjudicator decisions; the effect of an adjudicator's error on the calculation of a sum.
CPR Part 8
Assignment of contracts – the requirement of consent for the assignment of rights and obligations; the implications of an unauthorized assignment.
Clause 7 of the contract, Chitty on Contracts, 34th edition at 22-081
Declaratory relief – the court's jurisdiction to grant declarations without other relief; the discretion to grant or withhold declaratory relief, considering justice to all parties.
Section 19 of the Senior Courts Act 1981, CPR rule 40.20, Chapman v Michaelson [1909] 1 Ch 238, Gray v Spyer [1921] 2 Ch 549, Rolls-Royce plc v. Unite the Union [2010] 1 WLR 318, Zamir and Woolf, The Declaratory Judgment, 4th edition, Bank of New York Mellon, London Branch v Essar Steel India Ltd [2018] EWHC 3177 (Ch)
Insolvency – the court's power to grant permission to bring a claim against a company in liquidation.
Section 130 of the Insolvency Act 1986
Outcomes
The claim for declaratory relief was dismissed.
The court found that while the second adjudicator misinterpreted clause 8.7.4.3, granting the declaration would create an unfair windfall for the claimant. The defendant's absence due to lack of funds, and the potential merit in challenging the adjudicator's findings regarding practical completion and the identity of the employer (Grainger vs. Valescure), led the court to refuse the declaration.
Similar Cases
J & B Hopkins Limited v A & V Building Soltuions Limited
[2023] EWHC 301 (TCC)
ISG Retail Ltd v FK Construction Ltd
[2024] EWHC 1713 (TCC)
Battersea Project Phase 2 Development Company Limited v QFS Scaffolding Limited
[2024] EWHC 591 (TCC)
Halsion Limited v St Thomas Street Development Limited
[2023] EWHC 2045 (TCC)