In TClarke Contracting Ltd v Bell Build Ltd the Technology and Construction Court (TCC) has provided further guidance on when use of the Part 8 procedure is appropriate.
Background
Bell Build Limited (Bell) brought an adjudication for payment of sums claimed pursuant to payment application 18. TClarke Contracting Ltd (TClarke) defended the claim on the basis that it had issued a valid pay less notice, and that those sums were therefore not payable to Bell. TClarke was unsuccessful in its defence and the Adjudicator determined that TClarke pay Bell the sum of £2,129,672.69 plus any applicable VAT.
TClarke then sought declaratory relief from the TCC under the Part 8 procedure to seek to overturn the Adjudicator’s decision – in particular, TClarke wanted the TCC to make a determination as to the validity of (i) the purported pay less notice and (ii) the Adjudicator’s decision.
Part 8 Procedure
The Part 8 procedure is an alternative procedure where a claimant seeks “the court’s decision on a question which is unlikely to involve a substantial dispute of fact”.[1] The Part 8 procedure involves less procedural steps than the standard Part 7 procedure, and is usually much quicker.
Judgment
The Judge made it clear that the function of the Court is to finally determine the parties’ rights. It is not the Court’s role to review or hear an appeal from an Adjudicator’s decision.
In this case, the Judge found that the Part 8 procedure was plainly inappropriate for this matter and that the claim must proceed under Part 7 for the following reasons:
- There was a dispute as to whether the contract had been varied, which would require witness evidence from the parties;
- Whilst TClarke did not accept that the contract had been varied, it sought the declaration based on Bell’s case. A declaration contrary to TClarke’s pleaded case would be open to challenge by TClarke on the basis that there was no such variation, or that the terms of variation were not as alleged by Bell;
- Bell’s estoppel argument required witness evidence; and
- TClarke had not identified one or more precise legal questions that can be properly tried and which would be determinative of the current dispute between the parties.
The requirement in this matter for witness evidence, and the evident disputes of fact, would mean that the Part 8 procedure would not entitle the parties to plead their case in a way that would allow the Court to finally determine the issues at play. The Judge noted that the Court must avoid the risk that it might reach an ill-formulated and ill-informed decision that will not finally dispose of the disputes between the parties.
Comment
This Judgment is the latest in a spate of recent Judgments from the High Court[2] which confirms that a party should only bring a Part 8 claim where the Part 8 procedure would allow the Court to reach a decision that is finally determinative of the matter at hand, and it is not appropriate for matters where there are significant disputes of fact. The Judge clarified that the Court’s role is to finally determine disputes, and it will decline the use of the Part 8 procedure where that would put the Court’s declarations at risk of not being finally determinative.
We have seen a rise in Part 8 claims being used as an effort to thwart adjudication enforcement claims. This Judgment provides welcome clarity that a party should not seek to artificially simplify matters in order to have a case tried by way of the Part 8 procedure to prevent adjudication enforcement.
Fladgate acted for the Defendant, Bell, in successfully having the proceedings proceed by way of Part 7.
[1] CPR 8.1(2)
[2] See, for example, ISG Retail Limited v FK Construction Limited, CLS Civil Engineering Limited v. WJG Evans and Sons, Berkeley Homes (South East London) Ltd v. John Sisk and Son Ltd, Sleaford Building Services v. Isoplus Piping Systems Ltd
