Sitol Limited v Finegold & Anor

On a summary judgment application, the court may reject a defence based on a factual contention that is clearly hopeless, but must avoid conducting a mini-trial. A dispute for contractual adjudication purposes arises when it objectively emerges that a claim is not admitted. An express rejection crystallises the dispute; further invitations to provide evidence or negotiate do not postpone that point. Where a contractual notification period runs from awareness of the dispute, awareness is assessed objectively. A party cannot delay the commencement of time by failing to read correspondence that has been brought to its attention.

Sitol Limited sought summary judgment to enforce an adjudicator’s decision awarding sums for specialist tiling works at the defendants’ property. The defendants argued that their contract was with Proman UK Limited, which had entered voluntary liquidation, rather than with them. Alternatively, they argued that Sitol’s adjudication was commenced outside the contractual four-week notification period.

The court had to decide whether there was a real prospect of either defence succeeding and, if so, when the relevant dispute arose and became known to Sitol.

1. Summary judgment. The court applied the Part 24 test. Summary judgment is available where there is no real prospect of a successful defence and no other compelling reason for trial. The court should not conduct a mini-trial, but may reject a factual contention that is clearly hopeless.
2. Contract point. The contemporaneous documents and evidence showed, for summary judgment purposes, that Proman acted as the Finegolds’ project manager and agent. The contract for the tiling works was therefore between Sitol and the Finegolds through Proman. The defendants’ evidence was thin, and there was no reasonable basis to suppose that a trial would produce a different result. The first defendant therefore had no real prospect of successfully defending the claim on this ground.
3. Timing point. Clause 93.3 permitted referral only if the dispute had been notified within four weeks of the referring party becoming aware of it. The court applied the principles summarised in Amec Civil Engineering Ltd v Secretary of State for Transport [2004] EWHC 2339: a claim does not become a dispute merely because it is made, but does so when it emerges that the claim is not admitted.
4. The defendants’ solicitors’ letter of 19 February expressly rejected any contractual relationship with Sitol and directed Sitol to claim against Proman. The dispute had therefore crystallised by that date. The later request for evidence did not postpone crystallisation. Awareness was objective and arose when the correspondence was brought to Sitol’s attention. The adjudication was consequently commenced too late, so the timing defence succeeded.

First-instance decision. No earlier or appellate decision is stated in the judgment.