TClarke Contracting Ltd vs Bell Build Ltd

This case concerned a dispute between TClarke Contracting Ltd and Bell Build Ltd over the validity of a Pay Less notice and an adjudicator's decision regarding payment under a construction contract.

• TClarke Contracting Ltd sought declaratory relief against Bell Build Ltd.
• The dispute involved the validity of a Pay Less notice and an adjudicator's decision.
• The court ruled that the Part 8 procedure was inappropriate for this case.
• The case must proceed under Part 7.

The claimant, TClarke Contracting Ltd, sought declaratory relief against the defendant, Bell Build Ltd, regarding the validity of a purported Pay Less notice and an adjudicator's decision that TClarke should pay Bell the sum of £2,129,672.69 plus any applicable VAT. The dispute arose from works for the construction of a data centre at Greenwich Point in London. TClarke was the main contractor and subcontracted the supply and installation of the new sub and superstructures to Bell, incorporating the 2016 JCT Design & Build Subcontract Conditions.

The disputed Pay Less Notice was issued by TClarke on 6 June 2023. TClarke sought a declaration that the notice was valid and that no further sums were due under Bell's payment application 18. TClarke also argued that the adjudicator was wrong in law to find that its notice was not a valid Pay Less notice and sought a declaration to set aside the adjudicator's decision.

Bell objected to the use of the Part 8 procedure, arguing that the issues were to be determined afresh by the court and that the adjudicator's reasoning was not relevant to the claim. Bell also asserted that the adjudicator had correctly found that the subcontract had varied the procedure for assessment of interim payments.

Krista Lee KC, representing Bell, argued that the case involved substantial disputes of fact and resisted TClarke's argument that the case could be tried on assumed facts. Andrew Singer KC, representing TClarke, countered that the claim sought to challenge the proper construction of the Pay Less notice based on facts asserted by Bell and found by the adjudicator.

The court considered Rule 8.1(2) of the Civil Procedure Rules 1998 and the TCC Guide, which state that the Part 8 procedure is appropriate where there is no substantial dispute of fact. The court also referenced previous cases, including Merit Holdings Ltd v. Michael J. Lonsdale Ltd and Berkeley Homes (South East London) Ltd v. John Sisk & Son Ltd, which highlighted the risks of using the Part 8 procedure inappropriately.

The court concluded that the use of the Part 8 procedure was inappropriate in this case due to the substantial disputes of fact and the risk of reaching ill-formulated and ill-informed decisions. The case must proceed under Part 7, where the court will finally determine the parties' rights based on witness evidence and a full examination of the facts.