HT-2023-000415 - [2024] EWHC 1199 (TCC)

Fecha: 20-May-2024

The Facts

II. The Facts

The Claimant, Dawnvale Cafe Components Ltd (“Dawnvale”) is a kitchen and bar fit-out company. The Defendant, Hylgar Properties Limited (“Hylgar”), is a property developer. In February 2020 the parties entered into a contract for the design, supply and installation of the mechanical works at The Beacon, Hoylake, Wirral. The contract price was £631,435 plus VAT and the contract provided for payment of 40% (£252,574) on appointment.

By October 2020 the relationship between the parties had broken down. There is no dispute that the contract was terminated in around November 2020, but each party alleged that the other had committed the relevant repudiation. By a notice dated 8^th June 2021 Hylgar referred the dispute to adjudication. The adjudicator was Mark A Smith. By the time of referral, Hylgar had paid Dawnvale £452,251.08. Hylgar sought an adjudication as to the true value of Dawnvale’s work and repayment of £180,322.92 plus VAT and interest. Dawnvale denied that any amount was due to Hylgar and itself advanced a counterclaim of £147,289.25. (The counterclaim was a “smash and grab” claim advanced in the absence of a payless notice.)

By his decision dated 19^th July 2021. Mr Smith decided that (a) Dawnvale had repudiated the contract, (b) the true value of the works at termination was £272,251.08 plus VAT, (c) Dawnvale’s counterclaim had no effect on Hylgar’s claim, and (d) Dawnvale had been overpaid and should repay Hylgar £180,322.92 plus VAT as applicable (£452,574 - £272,251.08). Dawnvale were also ordered to pay the adjudicator’s fees.

Dawnvale failed to pay the outstanding sum and so, on 9^th August 2021, Hylgar issued enforcement proceedings in the Business and Property Courts in Liverpool (Technology and Construction List), action number HT-2021-LIV-000005. By those proceedings, Hylgar sought recovery of (a) the adjudicator’s award of £180,322.92, (b) VAT thereon of £36.054.58, (c) the adjudicator’s fees of £13,986, and (d) VAT thereon of £2,797.20. The total claimed was therefore £233,170.70. Statutory interest was claimed in addition, together with costs.

By a Tomlin order dated 24^th August 2021 (“the Order”) those proceedings were compromised. The Order provided:

ORDER

UPON the parties having agreed terms of settlement as set out in the attached Schedule.

BY CONSENT IT IS ORDERED THAT:

(1)

The hearing listed for 16 September 2021 be vacated.

(2)

All further proceedings in this action be stayed upon the terms set out in the Schedule hereto except for the purpose of enforcing those terms.

(3)

Each party shall have permission to apply to the Court to enforce those terms without the need to bring a new claim.

(4)

Each party shall bear its own costs.

SCHEDULE

(“the Settlement Agreement”)

IT IS AGREED AS FOLLOWS:

The Defendant shall pay to the Claimant the sum of £246,170.70 hereafter “the Settlement Sum”, inclusive of interest and costs, in accordance with the following provisions:

[There followed seven sub-paragraphs allowing for payment in tranches from 27^th August 2021 to 15^th February 2022.]

The Defendant shall pay to the Claimant the Settlement Sum in accordance with the payment terms set out at paragraph 1, into the following account;

[bank details]

Should the Defendant fail to pay the any [sic] instalment of the Settlement Sum on the due date then the remaining balance of the Settlement Sum shall become immediately due and payable to the Claimant.

This Settlement Agreement shall immediately be fully and effectively binding on the parties. The payment of the Settlement Sum is in full and final settlement of any and all claims the Claimant may have against the Defendant arising from or in connection with these proceedings.

This Settlement Agreement is subject to English law and any dispute arising under or in connection with this Settlement Agreement shall be subject to the jurisdiction of the English courts.

[bold added]

Two years later, by a letter of claim dated 31^st August 2023, Hylgar sought further losses arising from the same repudiatory breach and intimated an intention to refer a claim for these losses to adjudication in the absence of a satisfactory response. I refer to this as the “new claim”. The letter claimed:

Costs of assessing Dawnvale’s works on repudiation - £71,775.15;

Additional build costs - £2,852.08;

Remedial works - £15,000.00;

Delay arising from the repudiatory breach - £223,274.25;

Lost rent - £94,929.86;

Lost profit - £175,120.19;

Loss of contribution to overheads - £58,642.22;

Total: £641,594.76.