In ISG Retail Limited v FK Construction Limited [2024] EWHC 878 the Technology and Construction Court (TCC) considered the latest dispute between these “serial litigants” (as they were described by the Judge, Neil Moody KC).

Background

ISG Retail Limited (“ISG”) was the main contractor on a scheme in Avonmouth, Bristol known as Project Barberry. FK Construction (“FK”) were engaged under a sub-contract for the roofing and cladding works.

A dispute arose following FK’s Application for Payment 21. The matter was referred to well-known construction adjudicator Matthew Molloy. As part of his decision, Mr Molloy determined that FK was entitled to an extension of time (“EoT”) of 188 days and associated prolongation costs of £198,000 (the “Molloy Decision”).

Subsequently ISG brought a Part 8 claim for a final determination of a key issue underlying those elements of the Molloy Decision. It contended that compliance with clause 9(5) of the sub-contract (the “Delay Clause”) was a condition precedent to entitlement to EoT, which FK had not fulfilled.

For its part, FK denied that the Delay Clause was a condition precedent, alternatively said that it had complied with the term, and, in the further alternative, said that ISG was estopped from relying on the Delay Clause and/or had waived its entitlement to rely on it.

As to suitability of the proceedings for Part 8, ISG contended that there were two short points to be determined, namely whether the Delay Clause was a condition precedent, and whether it had been breached. FK alleged that to the contrary, the case involved examination of a great deal of factual material and was wholly unsuitable for Part 8. ISG responded that FK was “obfuscating the issues” by deploying “every conceivable argument” in a bid to persuade the court not to decide the case on a Part 8 basis.

What did the Court Decide?

The Judge concluded that the claim was not suitable for Part 8 determination. While it was accepted that the issue of whether the Delay Clause was a condition precedent would in all likelihood be suitable for trial under Part 8, determining the remaining issues of whether there had been a breach of the Delay Clause and FK’s argument of waiver and/or estoppel was “very likely to involve substantial disputes of fact”, and FK’s argument had a “real prospect of success”.

Conclusion

The case provides further illustration of the relatively narrow scope of Part 8 CPR.  While Part 8 proceedings might have been thought suitable to determine an apparently self-contained issue as to whether a contractual term was a condition precedent which had been breached, the ability of the Defendant to identify arguments which were likely to involve substantial disputes of fact and had a real prospect of success led the Judge to conclude that the use of Part 8 was, on further analysis, inappropriate.

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