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Adjudication win - Ilford Project

Lee Kyson represented a local builder, based in Barking, who had his employment, under a JCT contract, terminated and was given 14 days to pay a £65k claim.

Lee suggested adjudication to determine the validity of the termination as he believed it to be invalid.

Lee represented, presented and argued the case for the contractor and won.

The Adjudicator found that the contractor was justified in not returning to the site following an argument with the client's representative and the resulting termination by the Employer defective, therefore invalid.. 

Refurbishment of Hackney pub

The Building Contractor (BC) was requested to provide an estimate for refurbishment works at a Public House in Hackney, the Client (C) had informed the BC that he [C] had already stripped out the building with his own team. On arrival BC noted and informed C that his team had removed load-bearing walls on each floor and that the roof was in danger of collapsing. Temporary supports were put in place and the services of a structural engineer sought.

BC provided an estimate and commenced with the works which consisted of two floors to be renovated as flats above; and the ground floor bar area. The structural works involved

·        installing steel beams to support the roof and corresponding floors below where the load bearing walls had been removed from each floor, including the basement.  

·         construct a single storey rear extension which involved removing the ground floor walls of the existing rear 2-storey extension and inserting the steel beams to support the upper storeys.

·         create an opening in the rear of the building and install a steel box frame to open up the existing bar area into the new extension.

The refurbish works were well underway and the structural work had just been completed. BC arrived on site one Monday morning only to find that C had brought in his ‘team’ who had been working over the weekend, had been and were using BC’s tools and materials and were carrying on the works commenced by BC.

C arrived and informed BC that his services were no longer required and that they (C and his team) would finish the works.

C asked BC if he would leave his carpenters to finish the bar area, as BC had no other work for them, at such short notice, he reluctantly agreed.

Approximately 1 ½ weeks later BC met with C, who was accompanied by his lawyer, to discuss the hours worked by the carpenters. C informed BC that the carpenters were no longer working for him and were now employed by C. BC informed C that he would issue a £4,000 invoice for loss of profit. C and his lawyer laughed.

BC issued an invoice for £4k, there was no response, BC issued a reminder. Having had no response from either Lee advised BC to serve a ‘statutory demand’. C’s lawyer proceeded to pester BC to withdraw the statutory demand, BC refused. C applied to the High Court Chancery Division for a petition to prevent BC from applying for a winding up petition. Lee had prepared an ‘argument’ for BC, however as it was not a construction court (TCC) and C wished to argue the case in court Lee suggested that BC was prepared to argue the case in court or Alternate Dispute Resolution (ADR). The judge agreed and issued a petition to prevent BC from presenting a winding up petition subject to the outcome of either a court case or ADR. The judge made no award for costs, C had been seeking to claim £4k costs.

Lee prepared and presented the ‘Referral’ for Adjudication on the basis that C had failed to issue a ‘Pay Less Notice’, with fall-back provisions just in case the Adjudicator did not accept the Pay less Notice argument. C (Responding Party) put forward their argument.

The adjudicator found that the failure to issue a Pay Less Notice’ was sufficient grounds and awarded in BC’s favour. C had to pay the adjudicator’s fees of £4k.

It is estimated that C had to pay

·         High Court and legal costs iro of £4k,

·         BC £4k + interest,

·         Adjudicator £4k,

·         and their own legal advisor’s fees. 

Feature 3

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