| Date | 23 February 2000 |
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| Judgment | Sherwood & Casson Limited -v- Mackenzie TCC 30 November 1999 |
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| The Issue | Overlapping of consecutive adjudications on the same construction contract. |
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| Implication |
An adjudicator may lack jurisdiction in dealing with a dispute which is substantially the same as a dispute determined by an earlier jurisdiction. However, the determination of a final account would generally be regarded as a different dispute to the determination of the last interim payment. |
printIt will seem plain and obvious that once a decision has been made by an adjudicator upon a disputed matter, the parties will not be able to go to a second adjudicator to have that same dispute determined a second time. This would be to upset the binding nature of the first decision as intended by the statutory provisions. But it will not always be clear whether or not a second dispute is indeed dealing with matters already considered in an earlier adjudication. For example, many adjudications concern the valuation of an interim payment. It may be open to the parties to adjudicate upon subsequent interim valuations on the basis that these constitute fresh disputes. Nevertheless, care must be taken to be ensure that where issues of liability or principle have been decided in an earlier adjudication, these remain binding upon the parties and require to be given effect by subsequent adjudicators. These general issues were considered in the case of Sherwood & Casson Limited -v- Mackenzie. Sherwood were subcontractors for the provision of steelwork and cladding for the new main grandstand being constructed for Barrow-in-Furness Rugby League Football Club. Following practical completion Sherwood gave notice referring a dispute concerning its interim valuation to adjudication. The adjudicator published a decision to the effect that Mackenzie should pay Sherwood approximately £6,600 plus VAT in respect of the interim applications for payment then outstanding. Sherwood then prepared a final account document which claimed substantially the same as had been claimed in the interim application that had been dealt with by the first adjudicator, save for the addition for a claim for a loss and expense. This led to a second referral notice and to the appointment of a second adjudicator. The second adjudicator decided that the dispute he was concerned with was not substantially the same as had been considered by the first adjudicator, and accordingly proceeded to make a decision that Mackenzie should pay Sherwood a further sum of approximately £12,500. Both adjudications had been conducted under the Scheme for Construction Contracts where at paragraph 9(2) it is stated that "an adjudicator must resign where the dispute is the same or substantially the same as one which has previously been referred to adjudication and a decision has been taken in that adjudication". The same jurisdictional question would rise whether or not the Scheme applied, since if a dispute had already been substantially decided by an adjudicator there would not remain in existence a "dispute or difference" capable of being referred to a second adjudicator. Any second appointment would probably be one without jurisdiction. In the event Mackenzie refused to pay the sums ordered by the second adjudicator, and the matter came before the Court on enforcement proceedings. The principal question to be answered by the Court was whether the second adjudicator had been correct in deciding that the dispute he was concerned with was not substantially the same as that of the first adjudicator. His Honour Judge Thornton QC recognised that although a "dispute" could in the meaning of the Act encompass several causes of action, issues or claims arising out of the same construction contract, strictly speaking the dispute referred was a "dispute" in the singular. Accordingly, Judge Thornton concluded that there appeared to be no possibility of the adjudicator resigning from determining part of the dispute referred to him. He must either resign from the dispute in its entirety or confirm his appointment in its entirety. Mackenzie opposed the summary judgment application for enforcement primarily on the basis that although there was a loss and expense claim that was new, overall the second dispute was substantially the same as the first dispute. The variations, save for one, were the same albeit that some of the valuations differed marginally. The contra-charges were the same and the contract sum was the same. Judge Thornton was satisfied that unlike the question of whether or not there is an underlying contract in existence, under the Scheme the adjudicator is given jurisdiction to determine whether or not the two disputes are substantially the same. Such a decision by an adjudicator would however be open to challenge upon enforcement proceedings. Judge Thornton concluded that the two disputes were clearly different and that the adjudicator's decision to that effect was clearly correct. In compiling the final account the parties are required to re-measure and re-value all work at that stage even though each interim application is intended to value all work properly executed up to the date of the application. It was also significant that a loss and expense claim was being put forward for the first time. Many of the component parts of the dispute were different to those adjudicated upon previously, and thus the 'dispute' referred to the second adjudicator was not substantially the same as the previous referral. Furthermore, the second adjudicator had jurisdiction to determine this matter. Accordingly Sherwood was entitled to judgment in respect of the amounts awarded by the second adjudicator, including interest and costs.
CJ-0007
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