Building contract — Contractor — Entitlement to time extensions — Adjudicator’s determination that no extension due — Appellant claiming damages for delay –Adjudicator declining to consider defence based upon further claim for time extension — Application for summary judgment on damages dismissed — Whether adjudicator taking account of causes of delay not in application letters — Appeal dismissed
The appellant employed the respondent as contractor to carry out a renovation project under an amended JCT 1998 standard form contract. This provided for the payment of damages by the defendant in the event of delays, but with provision for reasonable time extensions to be granted by the architect, upon receiving due notice from the respondent, in respect of delays caused by relevant events as defined in the contract. During the works, the respondent sent two letters applying for time extensions, both of which were refused by the architect. The respondent referred the matter to adjudication, pursuant to section 108 of the Housing Grants, Construction and Regeneration Act 1996. The adjudicator determined that the letters did not disclose any entitlement to an extension.
In a subsequent adjudication, the appellant sought to recover damages in respect of the respondent’s delay. It relied upon the decision in the first adjudication that the respondent was not entitled to a time extension for the relevant period. The respondent claimed an entitlement to a time extension in respect of the entire period, relying upon detailed grounds set out in an appendix. The adjudicator considered himself bound by his previous decision, and therefore declined to consider the respondent’s submissions and awarded damages to the appellant.
The respondent refused to pay, asserting that the adjudicator’s decision was unlawful. The appellant applied for a summary judgment to enforce the decision. An issue arose as to how the contractual provisions for time extensions interrelated with the provisions of section 108 of the 1996 Act and para 9 of the Scheme for Construction Contracts, which prohibited an adjudicator from determining a dispute that was “the same or substantially the same” as one that had previously been decided in an adjudication.
The Technology and Construction Court held that the claim for an extension of time advanced by the respondent in the later adjudication was different from that put forward in the first claim. Accordingly, the adjudicator ought to have considered it and his decision could not therefore be enforced: [2006] PLSCS 84. The appellant appealed.
Held: The appeal was dismissed.
The judge had reached the right conclusion for the right reasons. Both the dispute referred for adjudication and the dispute decided in the first adjudication were the respondent’s disputed claims for extension of time in the two letters. Since the respondent’s appendix identified causes of delay that did not feature in the two letters and was substantially different from the claims in the first adjudication, the adjudicator had been wrong not to have considered the appendix.
There were obvious differences between successive applications for extensions of time under the contract and successive referrals to adjudication. If an architect rejected an application for an extension of time, pointing out a deficiency in the application that the contractor subsequently made good, it would be absurd if he could not grant the application, if he thought it was justified, as part of the ordinary function of administering the contract.
However, referrals to adjudication raised different considerations since the cost could be substantial. Paragraph 9(2) of the statutory scheme provided that an adjudicator had to resign if the dispute was substantially the same as one that had previously been referred to adjudication, and a decision taken, which concerned a question of fact and degree. It necessarily followed that the parties might not refer a dispute to adjudication in such circumstances.
Matthew Holt (instructed by Kennedys Solicitors) appeared for the appellant; Abdul Jinadu (instructed by Clarks Legal LLP, of Reading) appeared for the respondent.
Eileen O’Grady, barrister
