HT-2024-000316 - [2024] EWHC 3235 (TCC)

The word “dispute” does not have some special or unusual meaning conferred upon it by lawyers, and courts should not adopt an overly legalistic analysis (see Amec Civil Engineering Ltd v The Secretary of State for Transport [2004] EWHC 2339 (“Amec”) per Jackson J at [68(1)] and Cantillon Ltd v Urvasco [2008] EWHC 282 (“Cantillon”) per Akenhead J at [55(a)]).

In considering whether there is a dispute, it is necessary to look at “the essential claim” which has been made and whether it is challenged or opposed (Cantillon at [55]).

The disputed claim is neither defined nor limited by the evidence or arguments submitted by either party to the other prior to the referral to adjudication or arbitration (Cantillon at [55(b)]).

When a claim is made it is for the paying party to evaluate that claim promptly and “form a view as to its likely valuation, whatever points may arise as to particularisation. Efforts to acquire further particularisation should proceed in tandem with that valuation process” (AMD at [14]). The absence of particularisation is not a proper ground for resisting enforcement of an adjudicator’s decision (AMD at [17]).

While it depends on the circumstances of the case, a dispute will be held to exist once it can reasonably be inferred that a claim is not admitted (Amec at [68(3)] and Collins (Contractors) v Baltic Quay Management (1994) Ltd [2004] EWCA Civ 1757, 99 ConLR 1 (“Collins”) per Clarke LJ at [63]).

There may be many circumstances in which it can reasonably be inferred (objectively) that a claim is not admitted. These include discussions between the parties and the prevarication or silence of a putative defendant (see Amec at [68(4)]).

The imposition of a deadline for responding to the claim does not have the automatic effect of curtailing what would otherwise be a reasonable time for responding. On the other hand, a stated deadline and the reasons for its imposition may be relevant factors when the court comes to consider what is a reasonable time for responding (see Amec at 68[6]).

Consistent with the observation of Coulson J in AMD at [8], the court is likely to be willing readily to infer that a claim is not admitted and that a dispute exists so that it can be referred to arbitration or adjudication (Collins at [64]); but

A “possible exception” is where the claim as presented by the claimant is so nebulous and ill-defined that the respondent cannot sensibly respond to it. In such a case neither silence by the respondent nor even an express non-admission is likely to give rise to a dispute for the purposes of arbitration or adjudication (Amec at 68[7] and AMD at [17]). Analysis

BDW set out its “essential claim” in the Letter of Claim, identifying Ardmore’s general obligations under both the Building Contract and the DPA 1972 and making clear that the claim related to fire safety defects. In so doing it provided contemporaneous correspondence relevant to the installation of fire barriers. By the time of its July 2023 letter, it had provided Ardmore with some expert reports and had offered inspection of the site. The allegations raised as to the unsuitable nature of the Alumasc product and the omission of fire barriers are the key allegations that were subsequently advanced in the Adjudication.

Although the Letter of Claim appeared to focus on advancing a case under the DPA 1972, the July 2023 letter identified that BDW also relied upon Ardmore’s deliberate concealment, which, together with the statement that Ardmore “deliberately breached its duty under the Building Contract” was plainly an indication of an intention to pursue a contractual claim. Accordingly I reject the contention that the 8 March 2024 letter amounted to a change to the fundamental premise of BDW’s claim.

Instead of taking steps to instruct an expert to inspect the site, to consider liability and to advise on the potential value of any claim, as it could and should have done, Ardmore continued to maintain in its response to the July 2023 letter that it required further particularisation. By now, however, it was abundantly clear that allegations of defective workmanship (including under the Building Contract) were being made against it in respect of fire safety requirements. Accordingly, it is difficult to conclude that Ardmore’s continuing refusal to respond pending receipt of further information was anything other than prevarication. Indeed it is clear from Ms Whiting’s witness statement in the Adjudication (dated 8 May 2024) that Ardmore took the positive decision not to “divert significant resources into investigations” until 8 March 2024 “when BDW provided the assignment of the contract and intimated an immediate adjudication”. In the circumstances I am not persuaded by the argument that Ardmore never actually denied liability – it apparently chose not to undertake an investigation into liability.

It is true that the 8 March 2024 letter identified new clauses on which BDW wished to rely for the purposes of its claim under the Building Contract together with some new particulars in respect of its DPA 1972 claim. However, I reject the suggestion that prior to receipt of the 8 March 2024 letter the claim (as it was then formulated) was so nebulous or lacking in clarity that Ardmore could not have responded to it and I infer that, by reason of Ardmore’s continuing failure to respond to the claim, a dispute had plainly crystallised. I repeat that I do not accept that the 8 March 2024 letter amounted to a fundamental change in the nature of the case being intimated by BDW.

Although it could potentially explain Ardmore’s lack of documentation (a point to which I shall return later), the fact that the claim was stale does not appear to me to assist Ardmore on the question of whether a dispute was crystallised. The passage of time should have provided the impetus to investigate the claim that was being advanced as soon as possible, in tandem with continuing to seek additional information in so far as was necessary. As Ardmore must have known, once remedial works had been commenced any physical evidence that might be relevant on site would be lost. Ardmore has provided no explanation in its evidence for its failure to take up the offer to inspect the site.

I have considered whether it may be correct to say that while a dispute had crystallised on liability by 8 March 2024, no dispute had crystallised on quantum, owing to the fact that (prior to 8 March 2024) BDW had provided no information as to the remedial works or as to the quantum of the claim. However, I do not consider that I need to decide the point. On 8 March 2024 BDW provided information about its quantum claim. I agree with Mr Choat that the time that elapsed between the 8 March 2024 letter and the Notice of Adjudication on 21 March 2024, together with the terms of the letter of 20 March 2024 from Ardmore, was plainly sufficient to give rise to a reasonable inference that the quantum element of the claim was not admitted by Ardmore, particularly where the fundamental essence of the liability element of the claim had been known to Ardmore for some considerable time.

By its letter of 20 March 2024, Ardmore continued to insist that it was not in a position (nearly two years after the Letter of Claim) to respond on the substance of the allegations made by BDW but that it remained committed to considering the claim if further information was provided. I consider that BDW was justified in concluding (and I infer given the background context to which I have referred) that this was a non-admission of its claim which clearly crystallised a