TSG Building Services Plc v South Anglia Housing Ltd

The contractor's disputed claim for compensation consequent upon the employer terminating the contract comprising three primary alleged financial entitlements was one claim and therefore only constituted one dispute.
 

 

 

TSG BUILDING SERVICES PLC v SOUTH ANGLIA HOUSING LTD
Technology and Construction Court
Akenhead J
8th May 2013
 

 

 
The contract was for the maintenance of houses. The employer terminated the contract. The contractor sought payment in consequence of the termination under four heads, namely (i) Under recovery of overheads and profit as a result of the termination (ii) Under recovery of contract set-up and termination costs (iii) Additional costs of maintenance in the first year and (iv) Under recovery of overheads and profit on additional repair work instructed by the employer to others. The employer denied that the contractor had any entitlement to such compensation. The contractor sent a "position statement" which sought to support the four heads of claim. In the absence of any satisfactory response from the employer to this statement, the contractor served a notice of adjudication which referred to the following "issues" (i) The additional costs incurred by it during the first year of the contract as a result of poor maintenance, servicing or installation works undertaken by other parties (ii) The revenue it had lost as a result of the employer awarding contract works to other contractors and (iii) The costs it had incurred resulting from the contract’s termination, which was an amalgam of under recovery of overheads and profit, contract set-up and termination costs.
 
The employer contended that (i) The referral notice referred to "three distinct disputes" when the contract only permitted a single dispute to be referred to adjudication at any one time and (ii) The three disputes were in effect the three "issues" referred to in the notice of adjudication, albeit expanded upon in the referral notice.
 
Akenhead J rejected this contention. The contractor put forward detailed written arguments and claims that it was entitled to payment for compensation flowing from the termination. The particular heads of claim pursued in the adjudication were in principle and substance the same as those raised shortly after the termination took place. The three financial heads of claim (albeit encompassed within four nominal heads of claim) put forward in the contractor’s position statement appeared to have been (at the very least) ignored or (possibly) openly rejected, which was sufficient to give rise to a dispute about the claim. Whilst it would have been theoretically possible for a party such as the contractor to pursue the three separate parts of its claim as separate claims, thus giving rise potentially to three disputes all referable to adjudication, that was not what the contractor did.
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