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Case Update: MW High Tech Projects UK Ltd v Balfour Beatty Kilpatrick Ltd (2020)

Take notice of the (Delay) Notices

MW High Tech Projects UK Ltd v Balfour Beatty Kilpatrick Ltd [2020] EWHC 1413 (TCC)

Mrs Justice O’Farrell DBE

Introduction

The TCC recently handed down a remote judgment in the case of MW High Tech Projects UK Ltd v Balfour Beatty Kilpatrick Ltd [2020] [1] . O’Farrell J considered a jurisdictional challenge to an adjudicator’s decision on the basis that because the respondent had not provided the claimant with
sufficient time to consider its delay notices and associated particulars, no dispute had crystallised.The claimant, MW High Tech Projects UK Ltd (“MW”), sought a declaration from the court that an adjudicator’s decision was of no legal effect because a dispute had not crystallised at the time of the
adjudication.

MW and Balfour Beatty Kilpatrick Ltd (“BBK”) entered into an agreement by way of a JCT Design and Build Subcontract 2011, with bespoke amendments. The scope of works was for the installation of Mechanical and Electrical Services to a new laboratory building in Hull.

Delay Notices

BBK alleged MW was behind programme in relation to its dry lining activities, and on 2 March 2018 issued a notice of delay to MW which sought an extension of time. The purported reasons for delay were:

a. Delays to first side boarding partition installations;
b. Delays to mist coating;
c. Delays to ceiling installations; and
d. Delays to stud work alterations.

The delay events were argued as ‘impediments, prevention or default, whether by act or omission, by the Contractor’ under clause 2.19.2.9 of the subcontract (Relevant Events). BBK provided its own cause and effect analysis of the expected impact of the delays it claimed to have suffered at the
hands of MW. It was a requirement of the subcontract that particulars of delay were provided and updated.

BBK continued to submit further notices and particulars over the course of the next twelve months. The same and further associated delays had increased BBK’s application for an extension of time to a total of almost 40 weeks.

MW opted not to respond to any delay notices or additional particulars submitted by BBK. Under clause 2.18.2 of the subcontract MW were required to respond as soon as reasonably practicable and not later than 16 weeks from the receipt of the required particulars. MW did not seek further particulars from BBK, failed to address the claims advanced by BBK and seemingly did not engage at all.

On the 30 July 2019, BBK furnished MW with an expert opinion on the delays impacting BBK’s ability to progress the works. This report was referred to as the Goodman Report. The report substantiated the claims that BBK claimed to have suffered. In providing the Goodman Report, BBK made reference
to the previous delay notices and particulars that it had submitted. The Goodman Report supported [1] the extension of time entitlement BBK had claimed. However the report also introduced new Relevant Events and provided a new critical path analysis. BBK requested that MW respond within 7 days of receipt of the Goodman Report. MW did not respond.

The key matter in dispute and the primary consideration for the court was whether the Goodman Report constituted a new notification under clause 2.17, or whether the report was to be treated as further particulars of the previously notified claim. Was the Goodman Report materially different to
the delays and facts that had previously been provided by BBK?

MW argued that the Goodman Report entitled them to a further 16 weeks to consider the notice and particulars advanced by BBK. Conversely, BBK argued that the Goodman Report was to be treated as further particulars to supplement its previously made claim.

BBK subsequently served a Notice of Adjudication on MW on 8 August 2019 in relation to the extension of time dispute. The adjudicator found that the Goodman Report was caught under 2.17.3 of the subcontract and would not give rise to a fresh 16 week period for MW to make a determination. The Goodman Report was additional particulars of a previously advanced claim and not a new claim. The adjudicator also granted BBK a full extension of time.

MW commenced proceedings under Part 8 of the CPR seeking to challenge the adjudicator’s decision on the grounds of lack of jurisdiction to decide the dispute. The English courts take a robust approach to enforcement of adjudicator’s decisions. Chadwick LJ held that the objective of the Housing Grants Construction Regeneration Act 1996 requires the courts to respect and enforce the decision of the adjudicator. The only exceptions being if the adjudicator has decided on a matter that was not referred or the manner in which the adjudicator has gone about the task is obviously unfair [2].

O’Farrell J held that the Goodman Report did not amount to fresh notification because the report was not materially different to delay particulars submitted by BBK earlier in the project. The Goodman Report was supplementary to the earlier particulars and were provided to add weight to
BBK’s claim. The fundamental nature and basis of the claim were the same.

The court declared that the adjudicator did possess jurisdiction and gave effect to the decision.

Summary

Prompt notification and submission of particulars, in compliance with any notice provisions within the contract relating to delay, remains imperative for parties to a construction contract. As does regularly updating any previous notices and additional particulars of delay.

For parties in receipt of such notices and particulars, consideration and active engagement is paramount. Ignore at your peril. It is misconceived for parties to consider that further notices and particulars amount to a new claim, even if further additional time is requested. The 16-week timetable to reply, will not begin afresh, unless the claim is materially different to the one already advanced.

Tudor Rose has been actively involved with numerous cases relevant to this issue. Should you wish to find out more about this, please do not hesitate to get in touch with us.

Whilst Tudor Rose has made every effort to ensure that the information contained within this article is correct at the date of publication, this article has been prepared as guidance only and does not constitute legal advice.

1 EWHC 1413 (TCC)
2 Carillion v Devonport Royal Dockyard [2005] EWCA 1358 at [85]