The TCC has held in Beck v UK Flooring [2012] EWHC 1808 (TCC) that a dispute cannot crystallise until a claim is not admitted. This may be achieved through silence depending on the facts of the case, but sufficient time must pass before silence can be interpreted in this manner. The TCC also held that an adjudicator's decision may be severed and enforced in part. The decision is important in that it is one of the first occasions in which an award has been ordered to be severed and enforced in this way.
Facts
This was a claim by a contractor against a subcontractor in respect of delay and delivery of materials. There had been correspondence between the parties before an adjudication was commenced and the claimant contractor put forward a schedule of costs incurred. Surveyors acting for the defendant subcontractor denied liability for the costs.
On 5 April 2012, the Thursday before the Easter bank holiday weekend, the claimant sent a letter to the defendant in which it claimed liquidated damages for the first time. There was no reply to this letter and on the first working day after Easter the claimant issued its notice of intention to refer the dispute to adjudication. It claimed both the costs incurred and liquidated damages. The adjudicator made an award in respect of both sums.
Decision
In the enforcement proceedings the court considered the cases of Cantillon [2008] and Amec [2005]. In Amec the question of the crystallisation of disputes was addressed and in Cantillon severability was considered. The court drew from these cases the conclusion that a dispute cannot arise until it emerges that a claim is not admitted. This may be achieved through silence depending on the facts of the case. Cantillon indicates that an adjudicator's decision can be severed where it addresses more than one dispute or difference.
It was accepted that there was a crystallised dispute in relation to the increased cost but not as to the liquidated damages. The court held that the claimant's letter of 5 April represented a new claim, in particular as it was based on an assessment of delay which was different from that referred to in the schedule of costs incurred. There had been no effective time for a response and it could not be regarded as disputed by silence over the bank holiday weekend. Therefore the claim for liquidated damages had not crystallised. It had been "tagged on" to a genuinely disputed claim arising out of the schedule of increased costs.
The court decided that there was no difficulty in identifying clearly what the adjudicator decided in relation to each claim and it awarded the amount for which he had jurisdiction relating to the increased costs claim.