Adjudication – Award – Enforcement – Parties entering into building contract on GC/Works/1 Single Stage Design & Build (1998) with Amendment 1 (2000) standard form – Dispute arising as to defendant’s right to extension of time and damages payable to claimant for delay – Adjudicator making award in favour of claimant – Defendant challenging validity of decisions – Claimant applying for summary judgment – Whether defendant being prevented from challenging jurisdiction of adjudicator on enforcement – Application granted
The claimant and the defendant entered into a building contract on the GC/Works/1 Single Stage Design & Build (1998) with Amendment 1 (2000) standard form, with further amendments in a schedule of supplementary conditions. A dispute arose with regard to the defendant’s right to an extension of time in respect of building works and the liquidated damages available for delay. The claimant issued a notice of intention to refer the dispute to adjudication and the defendant agreed to the appointment of R as adjudicator. The adjudicator made awards in favour of the claimant on the substantive issue and costs but the defendant challenged the validity of those decisions. The claimant applied for summary judgment, seeking to enforce the adjudicator’s decisions.
The defendant contended that the adjudicator had not had jurisdiction under the contract to determine the dispute because the provisions of the Housing Grants Construction and Regeneration Act 1996, which set out certain requirements for the adjudication provisions, had not been complied with. If an adjudicator was appointed under a contractual provision that did not apply, the appointment was invalid. Further, clause 59(3)(c) of the contract terms did not comply with section 108(2)(a) of the Housing Grants Construction and Regeneration Act 1996, or with section 108(2)(b) in that it failed to provide a timetable with the objective of securing an appointment within seven days of giving notice of adjudication
The claimant argued that the wording of the defendant’s letter agreeing to the adjudicator’s appointment prevented the defendant from challenging his jurisdiction on enforcement. Further, the defendant could not rely upon the adjudicator’s terms and conditions because neither party had expressly accepted them.
Held: The application was granted.
(1) There was nothing in the agreement to the appointment of the adjudicator that diluted, contradicted or undermined the earlier reservation of the right to challenge jurisdiction that had been made by the defendant. The letter, when read as a whole, made it clear that jurisdiction was being challenged and that it was on that basis that the adjudicator’s appointment was agreed by the defendant. The terms of the defendant’s agreement to the appointment of the adjudicator did not mean that the defendant had lost the right to challenge jurisdiction on enforcement.
(2) The agreement of the defendant to R’s appointment as adjudicator was done following the full reservation of rights and neither party had accepted his terms and conditions in an express way. However, regardless of the claimant’s contractual agreement with the adjudicator, it was the defendant’s that was relevant. It was possible to signify acceptance of proposed contractual terms by conduct, and that was what the defendant had done: Linnett v Halliwells LLP [2009] EWHC 319 (TCC); [2009] PLSCS 81 considered.
However, even if that was wrong, the court did not accept that by merely paying the fees the defendant has in these specific factual circumstances lost the right to challenge jurisdiction on enforcement: PT Building Services Ltd v ROK Build Ltd [2008] EWHC 3434 (TCC) distinguished.
(3) The whole of clause 59 of the contract, headed “adjudication”, had to be construed together, and clause 59(1) made it clear that each party had the necessary contractual right to refer a dispute to adjudication at any time. Clause 59(3)(c) had to be read as subject to the right in clause 59(1). Further, where the abstract of particulars named nobody as either adjudicator or substitute adjudicator, the fact that certain words had been left within clause 59(3)(c) that related to what was, or was not, to occur in respect of those individuals concerning completion of their appointment, meant that there was no contractual impact upon the first sentence of clause 59(3)(c) in any event by the words relied upon by the defendant. Nothing constituted a fetter upon the right of either party to refer a dispute to an adjudicator at any time. That right was unqualified and was contained within clause 59(1) of the terms.
(4) It was the 1996 Act that set out what a contract had to include, in order for the contract to comply with the statutory requirements. If the contract failed to do so, the scheme of the Act applied. The contract was not one that had to follow the scheme: it was one that had to comply with the Act. Timetables might, or might not, be similar or identical to those in the scheme. What mattered was that the requirements of the Act were complied with, and the terms of the contract in the present case had done so: Dalkia Energy and Technical Services Ltd v Bell Group UK Ltd (2009) 127 Con LR 66 considered.
Ronan Hanna (instructed by Eversheds LLP) appeared for the claimant; Luke Wygas (instructed by Clarke Willmott LLP) appeared for the defendant.
Eileen O’Grady, barrister
