Solland International Limited -v- Daraydan Holdings Limited
Case reference:
[2002] EWHC 220 (TCC)
Friday, 15 February 2002
Key terms: Summary Judgment - defective work - section 111 - section 114 - abatement
The Claimant, Solland International Limited, carried on business as a building contractor. Daraydan Holdings Limited, the Defendant, is an intermediary for His Highness Skeikh Mohammed Bin Khalifa Hamad Al-Thani, the Deputy Prime Minister of the State of Qatar. His Highness is the owner of a property in Curzon Street, London. Solland agreed to undertake the design and construction, refurbishment, fitting out and decoration of the property by a contract dated 5 March 1999 ("the building contract"). A second contract was entered into dated 21 July 1999 between the same parties and in respect of the same property, but relating to the furniture and fittings ("the furniture contract").
In respect of the first contract, liquidated and ascertained damages were payable at £15,000 per week. In respect of the second contract, damages were to be calculated at the same weekly rate as that of the first, save that the aggregate amount for any one week or part thereof was not to exceed £15,000. Completion was delayed, and Daraydan demanded liquidated damages in the sum of £810,000 under the building contract. No claim was made in respect of the furnishing contract. At the same time, valuation 59 certified a sum of £560,804.02 due to Solland under the building contract. The amount was not paid, and the non-payment of the invoice in respect of that valuation was referred to adjudication. The adjudicator decided that Daraydan should pay Solland an amount in respect of that invoice, together with interest and his fees. Daraydan did not pay. Solland sought summary judgment for the amount of the decision.
The main allegation was that the works were not completed, and that Daraydan were therefore entitled to abate the sum awarded by the adjudicator in respect of incomplete or defective work. The adjudication case law in respect of withholding notices, set off and abatement was considered. In particular, the Court of Appeal case of C & B Concept Design Limited v Isobars Limited (31 January 2002). HHJ Seymour QC considered that a distinction could be drawn between this case and that of Isobars. The question in this case was not whether a paying party could raise before an adjudicator the issue of what was due without having served a withholding notice, but an adjudication having taken place and the adjudicator having issued a decision, whether the paying party could now raise matters which were said to be relevant to what sum, if any, should be paid.
HHJ Seymour QC came to the conclusion that Daraydan became obliged under the terms of the contract to pay the amount set out in the adjudicator's decision, and that Solland were entitled to judgment for the sum claimed, together with interest and for the amount of the adjudicator's fees. He stated that the real question was, which of the parties should hold the money that the adjudicator had decided should be paid Daraydan while the disputes between the parties were finally resolved. The adjudicator had decided that it was Solland, and that decision should be enforced.
In respect of the first contract, liquidated and ascertained damages were payable at £15,000 per week. In respect of the second contract, damages were to be calculated at the same weekly rate as that of the first, save that the aggregate amount for any one week or part thereof was not to exceed £15,000. Completion was delayed, and Daraydan demanded liquidated damages in the sum of £810,000 under the building contract. No claim was made in respect of the furnishing contract. At the same time, valuation 59 certified a sum of £560,804.02 due to Solland under the building contract. The amount was not paid, and the non-payment of the invoice in respect of that valuation was referred to adjudication. The adjudicator decided that Daraydan should pay Solland an amount in respect of that invoice, together with interest and his fees. Daraydan did not pay. Solland sought summary judgment for the amount of the decision.
The main allegation was that the works were not completed, and that Daraydan were therefore entitled to abate the sum awarded by the adjudicator in respect of incomplete or defective work. The adjudication case law in respect of withholding notices, set off and abatement was considered. In particular, the Court of Appeal case of C & B Concept Design Limited v Isobars Limited (31 January 2002). HHJ Seymour QC considered that a distinction could be drawn between this case and that of Isobars. The question in this case was not whether a paying party could raise before an adjudicator the issue of what was due without having served a withholding notice, but an adjudication having taken place and the adjudicator having issued a decision, whether the paying party could now raise matters which were said to be relevant to what sum, if any, should be paid.
HHJ Seymour QC came to the conclusion that Daraydan became obliged under the terms of the contract to pay the amount set out in the adjudicator's decision, and that Solland were entitled to judgment for the sum claimed, together with interest and for the amount of the adjudicator's fees. He stated that the real question was, which of the parties should hold the money that the adjudicator had decided should be paid Daraydan while the disputes between the parties were finally resolved. The adjudicator had decided that it was Solland, and that decision should be enforced.