Bovis Lend Lease Ltd v Braehead Glasgow Ltd

Adjudication is without doubt a rapid form of justice. The speed at which an Adjudicator needs to reach a decision inevitably means that, on matters of any complexity, corners get cut. The trade-off is the potential for an early resolution of disputes which might otherwise fester or grow.

The Courts have recognised this in a series of cases concerning the enforcement of Adjudicators' decisions. Whilst acknowledging that Adjudicators must act within their jurisdiction, the Courts have still been willing to uphold an Adjudicator's decision even where it is plainly wrong. In these circumstances, the aggrieved party is left with no alternative but to seek final resolution of the issues in dispute through litigation or arbitration.

But what are the options when adjudication is not available or is not appropriate to the resolution of the issues in dispute? Both the Courts and the various institutional bodies have acknowledged the importance of quick, cost-effective justice responsible for the drafting of arbitration rules. What sort of alternative can they truly offer?

This was one of the issues that arose in the case of Bovis Lend Lease Ltd v Braehead Glasgow Ltd (19th April 2000). By way of background, Braehead employed Bovis to design and build a shopping and leisure centre at Braehead in Glasgow. Significant disputes arose between the parties, the details of which need not detain us. In summary, Bovis said it was due in excess of £8 million, excluding VAT and interest, on two interim certificates.

There can be little doubt that with this size of claim Bovis would have wanted to resolve the dispute as quickly as possible: the prospect of lengthy pleadings, disclosure and witness statements must have been unappealing, to say the least. Whilst with active case management by Judges in the Technology and Construction Court the case would be driven towards trial, a full trial would still be months if not years away. In any event, Bovis contended that Braehead had no defence to the claim. Bovis therefore decided to make an application for summary judgment . Alternatively, Bovis said that, at the very least, it must be entitled to a significant interim payment.

Now applications for summary judgment are by no means unusual. They have the clear benefits of being reasonably quick (by dispensing with the need for a full trial) and final (subject to any right of appeal). But to be successful, a claimant has to show that there is no real prospect of the Defendant successfully defending the claim at a full trial. The difficulty faced by Bovis was that Braehead had various cross claims. Braehead alleged that it was entitled to deduct LADs in excess of £6.9 million for late completion of works, and that it had a counterclaim for damages as a result of various breaches of contract. Bovis contended that these claims were wholly without foundation.

In giving judgment, Mr Justice Dyson gave an early indication of the approach he was likely to take. He notes that the parties had provided him with "13 lever arch files bulging with documents", together with various witness statements of considerable length. This, he said was "not promising territory for an application for summary judgment".

It is not, of course, sufficient for a defendant to produce mountains of irrelevant paper in defence of an application for summary judgment. Unfortunately for Bovis, there was real substance to Braehead's counterclaim. In particular:

• Braehead were in principal entitled to deduct LADs for late completion of the works;
• The works had been completed late; and
• No extensions of time had been granted.

These facts alone suggest that Bovis had a mountain to climb. Manfully, Bovis contended that it was, in fact, entitled to an extension of time by virtue of:

• an agreement which Braehead disputed;
• alternatively that the delays were caused by sub-contractors and Braehead were not
• entitled to deduct LADs in those circumstances; and
• that Braehead had failed to give proper notices under clause 24 of the contract. The detailed arguments are of little or no interest here. It is, however, patently clear that there were significant factual disputes between the parties. If these had not been clear at the outset of the proceedings, they were certainly clear when Braehead served its Defence and Counterclaim. By that time at least, the application was fatally flawed, and it is clear that, in Mr Justice Dyson's view at least, the application should not have been allowed to proceed. The conclusion to be drawn is salutary - applications for summary judgment require a clear cut claim, where there is no real prospect of a successful defence. At a time when attention is focused on the use of adjudication to resolve construction disputes, the contrast is stark. The Courts will not cut corners to resolve disputes, irrespective of whether it would save time and costs. For further information on this topic, please contact Andrew Rawstron at [email protected] or on +44 (0)20 7367 3000.