Nickleby FM Ltd v Somerfield Stores Ltd [2010]

EWHC 1976 (TCC)

Judgment Date: 30.07.2010

Where an adjudicator did in fact have jurisdiction and would have come to the conclusion that he had jurisdiction if he had been aware of all the facts, then his decision should be enforced, notwithstanding the fact that the case relied upon by the claimant in enforcement proceedings differed from the case relied upon during the adjudication.

Technology and Construction Court, Mr Justice Akenhead

Facts

The claimant (“Nickleby”) was engaged by the defendant (“Somerfield”) to provide management services in relation to the maintenance of a number of supermarkets for three years pursuant to a bespoke contract dated 1 May 2006. A one-year’s extension to the contract was negotiated. There was subsequently disagreement between the parties as to the terms of this extension. The parties subsequently fell into dispute concerning two invoices submitted by Nickleby. Nickleby referred the matter to adjudication. During the adjudication Nickleby argued that the original contract had been extended on agreed terms. Somerfield disputed the jurisdiction of the adjudicator. Somerfield alleged that there was no agreement as to the terms on which the contract had been extended, that the contract had therefore ceased to exist in May 2009, and that accordingly there was no contract, or no contract evidenced in writing for the purposes of the Housing Grants, Construction and Regeneration Act 1996 (the “Act”). The Adjudicator issued what he termed a “non-binding conclusion” that he had jurisdiction. The Adjudicator awarded Nickleby c.£200k plus VAT and interest, and ordered that Somerfield should also pay his fees of £10k. Somerfield did not honour the Decision, and Nickleby made an application to enforce the award by way of summary judgment. During the enforcement proceedings both parties accepted that there was an agreement between the parties whereby the original contract was extended (this was contrary to the stance previously taken by Somerfield). Nickleby’s argument at the enforcement stage with regard to jurisdiction was put forward on the basis of a different approach to contract formation from that it had argued in the adjudication proceedings.

The issues

The Court addressed the following issues:

• Whether or not there was a contract in writing for the purposes of the Act.
• Whether Nickleby was advancing a case on jurisdiction which was materially or prejudicially different from that which it advanced in the adjudication, and if so, whether that invalidated its application for summary judgment.

The judgment

The Court held:

• On the facts there was a contract evidenced in writing for the purposes of s.107 of the Act.
• The Adjudicator did have jurisdiction at the time that he was appointed. There was a written construction contract (i.e. the contract originally agreed between the parties dated 1 May 2006) which had been extended by consent).
• It was doubtful whether the decision, relied upon by Somerfield, in Redworth Construction Ltd v Brookdale Healthcare Ltd [2006] EWHC 1994 (TCC) was correct. In that case the judge had said that Redworth could not, in an application to enforce an adjudicator’s decision, rely on arguments as to jurisdiction that were at odds with the arguments that it had advanced in the adjudication. This was because a party, having elected to put its argument in one way, and having derived a benefit from doing so, could not then resile from that argument(in legal terminology, Redworth could not “approbate and reprobate”).
• The principles of approbation and reprobation do not apply to a non-binding decision on jurisdiction. However, whether Redworth was correctly decided or not, it is necessary to examine with care whether a materially different case on jurisdiction is being mounted in the court proceedings compared with that raised before the adjudicator. It must also be relevant to consider whether the adjudicator with the correct and full information before him would have reached the same conclusion that he did. It will also be relevant to consider whether the adjudicator in fact and in reality actually did have jurisdiction. If an adjudicator did in fact have jurisdiction and would have come to the conclusion that he had jurisdiction if he had been appraised of all the facts, then the decision of the adjudicator should be enforced.
• In this case, it was true that Nickleby put its case on there being a contract on a different basis from the basis put forward in the adjudication. However, it was not necessary for the Court to base its decision on this new basis and in any event Nickleby also maintained, as an alternative case, an argument for jurisdiction that had been put before the Adjudicator and represented the basis upon which the Adjudicator had decided.
• Even if the Redworth approach was applicable in general, which was open to doubt, it was not applicable in this case because it was unnecessary to decide Nickleby’s new case; and it was unnecessary to do so because there was no doubt that the Adjudicator had jurisdiction.
• Summary judgment would be given and the Adjudicator’s Decision would be enforced.

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