Transport For Greater Manchester v Kier Construction Ltd (t/a Kier Construction - Northern)  EWHC 804 (TCC)
Transport for Greater Manchester (TfGM) entered an engineering and construction contract with Kier Construction to build a bus interchange in Bolton. Following completion of the project, TfGM deducted liquidated damages due to delayed completion. Kier subsequently issued a Notice of Adjudication, seeking an extension to the completion date and repayment of withheld sums. The adjudicator found in Kier’s favour.
Following the adjudication, TfGM’s solicitor wrote to Kier’s solicitor stating that the adjudicator had erred in law and that their intention was to seek to reverse the adjudicator’s decision. TfGM then emailed Kier directly restating this position.
TfGM later issued a claim on the basis that the adjudicator had erred in law, submitting that they had served a notice of dissatisfaction via letter by its solicitor as well as by e-mail. The issuing of said notice was required under the Contract between parties.
Kier argued that the letter sent by TfGM’s agent did not constitute a valid notice of dissatisfaction as it was not sent to their address directly as required by the Contract, and that the letter nor the e-mail sufficiently identified the matters in dispute or TfGM’s intention to go to court.
The court sought to determine the validity of a letter as a notice of dissatisfaction. In doing so, the court firstly looked at whether the notice/letter was sent to the correct address. It was noted that parties had communicated via their solicitors throughout the adjudication process to date and saw no reason why the notice of dissatisfaction should have been communicated differently. Thus, service via Kier’s solicitor was valid.
Regarding the content of the letter, the court noted that the contract between parties did not stipulate a specific form of words or level of detail which must be used when issuing a notice of dissatisfaction. As such, given that the letter informed Kier that the decision of the adjudication was not accepted a final and binding, and was unambiguous in putting Kier on notice, the content of which was deemed sufficient to be treated as a valid notice of dissatisfaction.
Subsequently, the court held that TfGM had served a valid notice of dissatisfaction, preserving their right to challenge the decision of the adjudication through legal proceedings.
Whilst it was not necessary to decide on this point, the court did note that they would have rejected TfGM’s alternative argument that the email constituted a valid notice of dissatisfaction given that it was not sent in accordance with the communication requirements of the contract.
This case raises several important issues regarding the service of notices in construction disputes and the necessity to ensure service is carried out properly and in accordance with the relevant contractual terms. Simply put, if you do not issue a required notice of dissatisfaction in accordance with your Contract, you may lose your rights to pursue final determination on a disputed adjudication decision.
How can you ensure that a notice of dissatisfaction will be considered valid and give you a second chance at getting the dispute decision you consider correct?
- If you are not satisfied with the result of an adjudication in which you are a party, immediately consider if the issuing of a notice of dissatisfaction is required or not. There are often strict time scales attached to period in which a notice can be issued, do not delay.
- Familiarise yourself with the requirements for notification under your contract, if any. Not all standard form contracts require notices of dissatisfaction. Failing to submit notices in accordance with the requirements of the contract could invalidate the notice.
- If the Contract does not clearly state what the notice ought to contain at the very least the notice should state that it is a ‘Notice of Dissatisfaction’, clearly state the basis of the claim and identify the steps that are being taken to action the claim.
- If there is any ambiguity as to who a notice of dissatisfaction ought to be issued, consider issuing duplicates.
- If there is any ambiguity as to where and by what means (letter, e-mail etc.) a notice of dissatisfaction ought to be issued, consider issuing duplicates.
- Ultimately, the content and nature of the issuing of any notice of dissatisfaction will all depend on the precise wording contained within the contract. If in doubt, seek legal advice!