Husband and Brown Ltd v Mitch Developments Ltd (TCC - 16.10.2015)

The consultant was not entitled to claim from the developer the costs of its successful adjudication against the developer in the form of the adjudicator’s and its solicitors' fees
 

HUSBAND AND BROWN LTD v MITCH DEVELOPMENTS LTD

Manchester District Registry, Technology and Construction Court

Her Honour Judge Moulder

16th October 2015

 

The consultant (i) claimed what it alleged to be outstanding fees due under an oral agreement made between it and the developer in relation to the developer’s acquisition of a site (ii) issued an invoice for payment of its fees (iii) delayed chasing payment of its invoice until after planning permission had been received for the site; repeatedly thereafter sought to have the invoice paid before commencing an adjudication (iv) was successful in the adjudication (v) began court proceedings to recover its invoiced fees together with costs of the adjudication in the form of the adjudicator’s and its solicitors' fees and (vi) was successful in the court proceedings in recovering its invoiced fees.

The consultant submitted that its claim for the costs of the adjudication was a foreseeable and recoverable consequence of the developer’s breach of contract of not paying the sum it claimed. In doing so it relied on the statements of Akenhead J in National Museums and Galleries on Merseyside v AEW Architects (2013) that (i) It was within the bounds of reasonable foreseeability that there could be adjudication in the circumstances of the instant case (ii) There was a sufficient causative link between the consultant’s defaults and the adjudication and (iii) The causative link would only be broken if the claimant had acted unreasonably or if its solicitors had acted negligently in advising it that it had an arguable defence in the adjudication.

Judge Moulder rejected the consultant’s submissions. The consultancy agreement was not a “construction contract” within the meaning of the Construction Act because it was not one to carry out or to arrange for the carrying out of construction operations. The statements of Akenhead J on which the consultant relied should be distinguished because (i) Adjudication fees were incurred in an adjudication of a dispute between the contractor and the employer (ii) Akenhead J was addressing the foreseeability and causation linking the breaches of contract of the consultant engaged by the employer and the adjudication between the contractor and the employer (iii) He was not addressing a situation where as here, it was correctly contended that there was no jurisdiction for the parties to go to adjudication under the Act and (iv) It was therefore not reasonably foreseeable that the costs of adjudication would result. Even if the statements of Akenhead J were not distinguishable, to allow the consultant to recover its costs of adjudication would subvert the statutory scheme which does not allow for such costs.

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