McLaughlin & Harvey Limited vs LJJ Limited

This case involved McLaughlin & Harvey Limited (MHL) seeking summary judgment to enforce an adjudicator's decision requiring LJJ Limited (LJJ) to pay £808,000.

TLDR:

• MHL sought to enforce an adjudicator's decision for LJJ to pay £808,000.
• LJJ resisted enforcement on four main grounds.
• The court found in favor of MHL, granting summary judgment.

The claimant, McLaughlin & Harvey Limited (MHL), is a large construction and civil engineering company. The defendant, LJJ Limited (LJJ), is a specialist mechanical and electrical contractor. MHL was engaged by Shiying Property London Limited for the fit-out and refurbishment of Christchurch Court, Paternoster Square, London, under a JCT 2016 Design and Build contract. MHL subcontracted LJJ to carry out the MEP installations under an amended JCT 2016 Design and Build Sub-Contract dated 7 May 2021, with a Sub-Contract Sum of approximately £17 million.

There have been five adjudications between the parties concerning the Sub-Contract, with the present proceedings focusing on Adjudication 5. On 12th September 2023, MHL issued an Adjudication Notice in Adjudication 5, seeking a decision that LJJ pay Key Date Damages for failing to meet Sub-Contract Key Dates, amounting to £1,160,000. The adjudicator issued a decision on 31st October 2023, directing LJJ to pay £808,000 within seven days.

LJJ resisted enforcement on four grounds: the decision was superseded by a revised decision dated 4th November 2023; any error by the adjudicator in issuing the revised decision was within his jurisdiction; MHL could not approbate and reprobate the decision; and MHL could not enforce the revised decision.

On 2nd November 2023, LJJ's solicitors submitted comments to the adjudicator, which went beyond clerical or typographical errors. The adjudicator requested MHL's comments, and on 3rd November 2023, MHL's solicitors objected to LJJ's submissions. Despite this, the adjudicator issued a revised decision on 4th November 2023, incorporating changes based on LJJ's submissions.

The court examined whether the revised decision superseded the original decision. It was determined that the adjudicator did not have the power to issue the revised decision as it went beyond correcting clerical or typographical errors. The court concluded that the adjudicator's actions fell outside the scope of his jurisdiction.

Regarding LJJ's argument that the adjudicator's error was within jurisdiction, the court referenced the House of Lords decision in Lesotho Highlands Development Authority v Impregilo SpA [2006] 1 AC 221, which distinguished between an erroneous exercise of power and exceeding jurisdiction. The court found that the adjudicator's actions constituted an attempt to exercise a power he did not have.

LJJ's argument of approbation and reprobation was dismissed, as MHL's minor corrections did not prevent them from relying on the original decision. Consequently, the court granted summary judgment in favor of MHL, enforcing the adjudicator's decision dated 31st October 2023, requiring LJJ to pay £808,000.

Legal representatives: Felicity Dynes (instructed by Fenwick Elliot LLP) for the Claimant, Crispin Winser KC (instructed by Cms Cameron Mckenna Nabarro Olswang Llp LLP) for the Defendant.

Judicial Panel: Adrian Williamson KC sitting as a Deputy Judge of the High Court

Case Citation Reference: [2024] EWHC 1032 (TCC)