| Date | 16 February 2000 |
|
|
| Judgment | Fastrack Contractors Limited -v- Morrison Construction Limited TCC 4 January 2000. |
|
|
| The Issue | Jurisdiction of adjudicators |
|
|
| Implication |
A pre-existing dispute will be necessary to confer jurisdiction upon an adjudicator. It is a matter of degree and detail as to whether the referral notice raises new issues which will be incapable of being adjudicated upon, such that only a limited part of the adjudicator's decision might be unenforceable. |
printI have recently reported decisions of the courts concerning the jurisdiction of adjudicators. The most recent judgments suggest that an adjudicator's decision will be enforced in all cases, except where it is successfully challenged that the adjudicator lacked jurisdiction. One angle that has featured in this type of argument is that the matters put before the adjudicator were not previously in dispute. Since an adjudicator can only be appointed under the statutory powers to resolve a dispute, where no dispute had properly crystallised the adjudicator's appointment would effectively be a nullity. The recent case of Fastrack Contractors Limited -v- Morrison Construction Limited considered these issues. Morrison was the main contractor constructing the new Leisure World and Arena Complex in Coventry. Fastrack was engaged as the brickwork subcontractor. The subcontract provided for the omission of work by Morrison if Fastrack failed to progress with the works to comply with Morrison's progress under the main contract. The project works were severely delayed. Fastrack alleged that the delays were caused by materials, work areas and information not having been made available, whereas Morrison alleged that the delays were caused by Fastrack's inability to work to the prevailing programme. Relationships deteriorated. Morrison indicated that they intended to take away some of Fastrack's work and give it to others. Fastrack immediately replied by disputing Morrison's entitlement to take such action and threatening adjudication proceedings for loss of profit and damages. The conflict escalated. An interim application for payment was met by a notice of payment from Morrison which reduced several of the heads of claim. No payment was made by the final date for payment. Meanwhile, Morrison had informed Fastrack that third parties were to be engaged to progress part of the works. Fastrack indicated that this action was to be treated as a repudiation of the subcontract by Morrison and accordingly it withdrew from site. Morrison in turn served a notice of determination. Shortly following this, Fastrack issued its final application for payment which included claims for damages due to the alleged repudiation. Morrison responded with a notice of withholding in respect of its alleged entitlement to damages including the additional completion costs of the subcontract. The sum claimed as a set-off was well in excess of the net sums claimed by Fastrack in its interim application. Two adjudications followed. The first concerned amounts due under the earlier application. A decision was made in favour of Fastrack and those monies were paid. The second adjudication concerned the balance of monies due under the subcontract. The sum claimed in the second adjudication was appreciably higher than the gross sum forming the final application for payment. These differences led Morrison to contend from the moment it first received the notice of adjudication, that there was no current dispute that could be referred to adjudication. It was argued that the adjudicator in consequence lacked jurisdiction to hear and determine the dispute referred by Fastrack. Morrison's contention was that if a dispute concerns a precise basis of claim and a precise amount, the notice of adjudication and the subsequent adjudication must be concerned with that basis of claim and amount and with no others. Fastrack responded that it fell to Morrison to show that the matters referred to adjudication were not previously in dispute. They argued that the test was whether the matters referred to adjudication were "materially different" from the pre-existing dispute so as not to be the same dispute. The adjudicator considered these representations and concluded that whilst there might be a substantial difference in the amounts claimed, the claim was not materially different to the claims disputed prior to the adjudication. He was satisfied that in the period prior to the adjudication the referring party had merely completed measurements and addressed errors and recalculated the quantum alleged to arise from Morrison's breaches of contract, delays and disruption. He was satisfied that these elements had been disputed in principle prior to the adjudication. His Honour Judge Thornton QC recognised that a dispute could only arise once the subject matter of the claim, issue or other matter had been brought to the attention of the opposing party and that party had had an opportunity of considering and admitting, modifying or rejecting the claim or assertion. A refusal to consider the claim or to answer it could constitute such a rejection. Judge Thornton considered that a genuine jurisdictional challenge would only occur where it was contended that there was no dispute at all, since, for example, the whole of the subject matter of the proposed adjudication had not been claimed, notified or rejected. In the present case, the essence of the complaint was that the referral to adjudication was broadly the same dispute as the dispute previously in existence, but that there had been amendments of detail and degree. In such a case the challenge is not to jurisdiction since within the matters referred will be found a common core of disputed material which can legitimately form the subject matter of a valid adjudication. In conclusion the adjudicator was correct to have investigated the jurisdictional challenge and correct to have concluded that the underlying disputed questions were embraced within the notice of adjudication. Accordingly Fastrack were entitled to summary judgment in the amount of the adjudicator's decision.
CJ-0006
|
|||
|
© Brewer Consulting |
|||
 |
|||