Time flies when you are having fun, or so the saying goes. I think it flies whether you are having fun or not, although I’m sure we’ve all experienced those moments when it isn’t flying at all and it feels like it has stood still. As Pink Floyd famously sang, “Ticking away the moments that make up a dull day”.
You may wonder why I am talking about time. Well, it’s because of the events leading up to Fraser J’s judgment in John Doyle Contractors Ltd v Erith Contractors Ltd. They are all to do with time.
As Fraser J says near the start of his judgment:
“The London Olympics in 2012 seem a long time ago, when one looks back eight years to how the world was then.”
It certainly does. Eight years ago we were all basking in the achievements of the athletes at the Games and congratulating ourselves on making it such a spectacular success. Some of us were also rather proud of how the brownfield site in East London had turned out, after all, West Ham got a lovely new stadium (although that was a bit later on) and we all got a lovely park to walk around. The River Lee has never looked better.
Somewhere in all that, an insolvency occurred. Looking back, I can see I mentioned it in a rather aptly titled (and Queen inspired) post, Another one bites the dust, when I commented that the Doyle Group had been placed in administration in June 2012. According to Fraser J’s chronology, the administration was followed by the appointment of liquidators in June 2013.
John Doyle Contractors Ltd v Erith Contractors Ltd
John Doyle Construction (JDC) had entered into a sub-contract based on the NEC3 Subcontract with Erith, and Erith was the management contractor to BAM Nuttall Ltd, who had been engaged by the Olympic Development Authority (ODA) to “perform certain construction works for the construction of the Olympic Park and other works necessary”.
JDC had carried out the hard landscaping works at the Olympic Park but was placed in administration before those works were completed. Apparently, Erith “had to step in and complete the works”. There was then a dispute over how much JDC was owed because of this.
Adjudication with Erith
One interesting point in the judgment relates to how the liquidators formed the view that the dispute with Erith was worth pursuing. As Erith had completed the works, its final account with BAM should show what it was paid for those hard landscaping works. Accordingly, the liquidators applied to the court for an order to compel production of this information and it led them to conclude there was a claim of about £1.2 million with a “reasonable prospect of success”. This was in June 2014.
However, the dispute was not referred to adjudication until January 2018, with the adjudicator’s decision handed down in June 2018. The adjudicator awarded JDC £1.2 million, including VAT and interest.
I’m not going to comment on the complicated history as to why the dispute was not referred to adjudication until 2018, or the involvement of a third party, Henderson & Jones Ltd, which has acquired rights to the dispute from the liquidator and will receive “the bulk of the spoils of any judgment in JDC’s favour”. I will leave others to do that. I will point out (so I’m not criticised in this) that the delay in the enforcement hearing was caused by the “developing law concerning the rights of companies in liquidation to adjudicate disputes at all” and the Supreme Court handing down its judgment in Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd on the same day as the enforcement hearing was originally listed.
As Fraser J put it:
“… one might have thought that any disputes under the construction contract between Erith and JDC for the landscape works at the Olympic Park for the London 2012 Olympic Games would have been finally resolved by 2020. Not so in this case.”
Memories fade with time
And it is the eight year delay that I really want to comment on. The judge notes that the liquidators could not find the court order that gave them the right to see documents about Erith’s final account with BAM, and that only happened in 2014, and was undoubtedly quite an important document. I’m sure that isn’t the only evidential hurdle the parties have faced in this dispute.
I’m starting to see older disputes referred to adjudication more and more, and it leads to many evidential problems for both the parties and me, as the adjudicator. Even if parties have great records (electronic or paper), memories fade, just like faxes used to because they were printed on that funny shiny paper. Even those people who believe they have great memories forget things. For example, do you remember where you were when Mo Farah won his 10,000 metre gold medal? I’m not sure I do, and yet it is considered one of the highlights of the 2012 Games.
I’ve talked about the difficulties with witness evidence before and how people’s memories are “fickle“, and I’ve considered Leggatt J’s comments in Gestmin v Credit Suisse and another. Obviously this assumes that, after eight years, you can even find witnesses of fact and can persuade them to help you (and you can still read that shiny fax paper!).
Fraser J remarked that he doesn’t think the TCC’s “streamlined and fast-track” enforcement procedure is appropriate for the enforcement of adjudicator’s decisions that are:
“… years, not months, old; nor that are made in respect of construction operations and disputes that are themselves… eight years old.”
I tend to agree with him. Disputes with older backgrounds do not lend themselves easily to a 28-day adjudication process, no matter how quick and dirty the process is meant to be. That said, I also see that there may be certain situations where adjudication can provide a cost effective way of unlocking part of the dispute as part of a wider dispute resolution strategy.