Face the facts

The Technology and Construction Court (TCC) has been creative and practical when putting in place procedures to help with the operation of adjudication under the Construction Act. Since the act does not deal with enforcement and jurisdiction, the TCC has developed its jurisdiction under part eight of the civil procedure rules (CPR) to help parties resolve jurisdictional issues.

Part eight is used for the quick resolution of claims where there is no real dispute on the facts, for example how to interpret words in a contract, where there would be no real need for witness evidence. Under part eight the dispute is effectively decided on the basis of the documents. This is in contrast to part seven, which is the usual route for claims.

A recent case, however, shows that the TCC’s flexibility in using part eight will not help if there is a substantial factual disagreement.

Its use has been developed through case law and is now set out in paragraph 9.4 of the TCC court guide. The guide makes it clear that the TCC will hear any applications for declaratory relief arising out of a disputed adjudication.

This is a useful tool, but it is still grounded in CPR part eight, which limits such proceedings to cases that are “unlikely to involve a substantial dispute of fact”. The TCC has not allowed this to limit its jurisdiction and has used part eight in cases where there were some disputed facts.
For example, in Vitpol Building vs Michael Samen, Mr Justice Coulson did not have any problems in using part eight to resolve the factual question of whether a contract existed and, if so, what its terms were. He observed that the TCC’s flexible use of part eight would accommodate oral evidence, resulting in what he described as “a hybrid between parts seven and eight”.

“In the event, Mr justice Ramsey looked at the scope of part eight and found that there was a substantial dispute of fact”

This wide approach was clearly relied upon in Forest Heath District Council vs ISG Jackson (22 February 2010), where part eight was used in an attempt to reverse the finding of an adjudicator. Mr Justice Ramsey, however, took a different view, highlighting the limits on using part eight and going back to the basic principles set out in the CPR rules.

The application was by the council, which was not happy with an adjudicator’s decision holding that a change to the works was caused by the late finalisation of the design, which resulted in an extension of time. The council therefore commenced part eight proceedings. Five witness statements were produced for the hearing.

Mr Justice Ramsey refused to make the declaration sought by the council. For starters, he found there was a substantial dispute of fact, as it was not clear whether there was late design or what the impact would be if there were, and there was no evidence in the documents on this point. Only one witness statement covered the relevant facts, but the lack of cross examination and full disclosure made it ineffective.

Ramsey went on to say that even if part eight applied, he would not exercise his discretion to make a declaration because it would not lead to a final determination of the issue. Whatever answer he gave, there would be other issues to be considered before a final answer on liability could be given.

Mr Justice Ramsey therefore made it clear that part eight did not provide a remedy in this case, and he noted that it was not intended as a short cut to avoid the need for using part seven for a claim.

This is a useful reminder that although the TCC will be pragmatic and sensible in using its powers under part eight, it will only apply in specific circumstances and it will not be used where there is a substantial dispute of fact.

The list in paragraph 9.4.1 of the TCC guide is an indication of the type of disputes suitable for part eight. And the basic rule in CPR 8.1 (2) (a), that there should not be a substantial dispute of fact, should always be considered before making an application.

Shy Jackson is senior associate at Pinsent Masons