Construction contract – Adjudication – Enforcement – Whether adjudicator having jurisdiction where no written contract existing between parties – Clause 9A.7.1 of JCT Management Contract – Whether parties reaching final determination by agreement on disputed item so as to render adjudicator’s decision non-binding – Whether enforceability affected by alleged mistakes – Whether appropriate to adjourn enforcement proceedings pending final account – Claim allowed
The claimant contractor and the defendant employer were parties to an adjudication under the Housing Grants, Construction and Regeneration Act 1996. The adjudicator found that he had jurisdiction to conduct the adjudication, notwithstanding the absence of a written contract between the parties as required by section 107, and awarded the claimant £98,117.38. The defendant raised no objection on the issue of jurisdiction during the adjudication. The claimant subsequently applied to the court for summary judgment to enforce the adjudicator’s decision. In those proceedings, the claimant alleged, and the defendant did not dispute, that their agreement was based on the terms of the JCT Management Contract.
In the enforcement proceedings, the claimant reduced the sum that it sought to recover by £27,667.23; this represented payments for its works contractors that the defendant had paid directly to the contractors in question. The defendant contended that the claimant should have made further concessions on other items, which should therefore be disallowed in the enforcement proceedings. One of these was a further sum of £10,000, which the defendant claimed it had also paid directly to a works contractor; it contended that the documents before the adjudicator represented a final determination on that item by agreement between the parties, within clause 9A.7.1 of the JCT Management Contract, so as to render non-binding the adjudicator’s decision on that issue. In addition, there were two sums of £35,575 and £19,457 for preliminaries and demolition work respectively, in respect of which the defendant alleged that the adjudicator had reached an erroneous figure by misreading some of the evidence before him. The defendant further sought to argue that the enforcement proceedings should be adjourned pending the outcome of separate pending proceedings to determine the final account.
Held: The claim was allowed.
(1) A responding party that had accepted the adjudicator’s jurisdiction, notwithstanding the absence of a clear written contract, could not renege on that concession: ALE Heavy Lift v MSD (Darlington) Ltd [2006] EWHC 2080 (TCC) applied. In such cases, the necessary written contract was constituted by the exchanges of written submissions in the adjudication and/or the enforcement proceedings, in which an agreement other than in writing was alleged by one party and not denied by the other: see section 107(5) of the 1996 Act. Accordingly, the adjudicator had had the necessary jurisdiction and the court was entitled to enforce his decision.
(2) There was no final determination by agreement between the parties as to the disputed £10,000 payment such as to render the adjudicator’s decision on that point non-binding. The relevant provisions of clause 9A.7.1 of the JCT Management Contract applied only to agreements reached between the parties after the adjudicator’s decision had been given. The only agreement alleged by the defendant was one that had been canvassed before the adjudicator, and he had expressly rejected it.
(3) Where an adjudicator’s decision was temporarily binding and had not been honoured, it was irrelevant that there were ongoing arbitration or legal proceedings to deal with the underlying issues; it was not appropriate to adjourn the enforcement action pending the outcome of those proceedings. The courts should respect and enforce the adjudicator’s decision unless it was plain that the question that he had decided was not one referred to him or that he had undertaken his task in an obviously unfair manner. Provided that the adjudicator asked and sought to answer the questions referred to him, he had jurisdiction to make a mistake; the need to reach the correct answer was subordinated to the need to have an answer quickly: Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358; [2006] BLR 15, Bouyges (UK) Ltd v Dahl-Jensen (UK) Ltd [2000] BLR 522 and Shimizu Europe Ltd v Automajor Ltd [2001] 1 All ER (Comm) 1041 applied. Accordingly, even if the adjudicator had made a mistake with the figures for preliminary and demolition works, that was a mistake that he was entitled to make and it could not now be used to defeat a claim for summary judgment.
Thomas Lazur (instructed by BPE Solicitors LLP, of Cheltenham) appeared for the claimant; John Virgo (instructed by JP Fletcher & Co) appeared for the defendant.
Sally Dobson, barrister
