Nick Kaplan successful in Round 2 of Bellway Homes v Surgo Construction

13th February 2024

K7010 3PB Nick Kaplan pupil

3PB construction barrister Nick KaplanNick KaplanCall: 2013 recently acted as sole counsel for Bellway Homes in a dual enforcement and Part 8 claim in the TCC in the case of Bellway Homes v Surgo Construction, before HHJ Davies. Judgment was handed down yesterday morning. Nick was instructed by Gateley Legal.

In its enforcement claim, Bellway claimed circa £1.1 million, which it had been awarded by an adjudicator (Jonathan Cope) following a true valuation of the parties’ interim account. The enforcement proceedings raised various questions as to whether the contractual adjudication provisions complied with the requirements of the Housing Grants, Construction and Regeneration Act. The Judge accepted Nick’s submissions that the contractual provisions were compliant and that Surgo had been wrong to suggest otherwise (a position it had maintained in three separate adjudications).

The Judge also concluded that since there was no material difference between the contractual adjudication provisions and the provisions of the Scheme for Construction Contracts, the fact that Bellway had said (following an earlier abortive adjudication) that the dispute was referred under the Scheme (albeit to the contractually specified adjudicator) did not deprive the adjudicator of jurisdiction.

Surgo’s had also issued a Part 8 claim which was conjoined with and heard alongside Bellway’s enforcement claim. In those proceedings Surgo sought declarations that Bellway was not entitled to recover sums overpaid on the interim account until the parties concluded the final account under the Contract. Surgo submitted that while an adjudicator had the power to assess the value of the interim account, the adjudicator had (particularly given the bespoke payment provisions agreed by the parties) no power to order Surgo to make any repayment until the final account stage; in particular where the original overpayment was made in an earlier payment cycle to that in respect of which Bellway sought repayment on a true valuation of the Works.

Nick successfully argued that Bellway was entitled to repayment at an interim stage, both on the true construction of the bespoke payment terms agreed, and in any event as a matter of general principle on a proper application of the principles articulated by Jackson LJ in S&T (UK) v Grove. Paragraphs [110] – [111] of the Judgment, in particular, set out the Judge’s analysis of the principles arising from Grove making clear that those principles are of fairly wide application.

The judgement, which can be read in full here, will be of interest to all construction practitioners, in particular those dealing with payment disputes and adjudication generally.

You can contact Nick Kaplan on [email protected]. If you would like to instruct him, or see about his availability, please contact his clerks Steve Evers or Joe Townsend on [email protected] or [email protected] or call either of them on 020 7583 8055.