| Date | 10 January 2001 |
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| Judgment | Elanay Contracts Limited -v- The Vestry, TCC 30 August 2000 |
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| The Issue | Resisting enforcement of adjudicator's decisions. |
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| Implication |
Various arguments including "issue estoppel" and the application of the European Convention on Human Rights rejected as grounds for refusing enforcement of adjudicators decisions. |
printA significant proportion of the cases I have reported throughout this year have concerned the enforcement of adjudicator's decisions. Section 108(3) of the Housing Grants, Construction and Regeneration Act has attracted most attention in these cases: "The contract shall provide … that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings …". Throughout the many cases in which this section of the Act has been considered, generally the attitude of the Court has been to enforce a adjudicator's decisions unless the defendant party could successfully argue one of two grounds. The first ground is the argument that the adjudicator lacked jurisdiction to make the decision given by him. This might be based upon the argument that there was no underlying contract to which the provisions of the Act could apply, or that there was no dispute between the parties capable of being referred to adjudication. The second and more recent argument for resisting enforcement has been to demonstrate to the Court that the procedure adopted by the adjudicator failed properly to observe the rules of natural justice. An example of a failure to observe the rules of natural justice would be where the adjudicator took evidence from one party or, indeed from a third party, and failed to allow the other party an opportunity to comment upon that evidence. In the case of Elanay Contracts Limited - v - The Vestry heard on 30 August 2000 the Court had to consider three further arguments raised by the defendant to resist enforcement of the decision of an adjudicator. Firstly, it was argued on behalf of The Vestry that if summary judgment was given to enforce the adjudicator's decision, it would be unable to raise the disputed matters in subsequent litigation. In seeking to enforce the adjudicator's decision Elanay had placed before the Court the complete background concerning the disputes between the parties. The Vestry argued that if summary judgment was given, all the matters pleaded by Elanay would thereupon be decided by a judgment. It would thereafter not be possible for The Vestry to raise those issues or, for that matter, either side to raise them in other proceedings. This rule which prevents the same matters to be litigated twice is called "issue estoppel". His Honour Judge Havery QC recognised that it was quite unnecessary for Elanay to have pleaded their claim in the way they did, because the basis of their claim was simply and solely the fact of the adjudicator's decision. He disagreed however, that his judgment for enforcement of the adjudicator's decision would give rise to an issue estoppel in relation to anything except the fact that the adjudicator's decision was made. Having failed with its first argument counsel for The Vestry raised a second argument. He argued that if his client was ordered to make payment in accordance with the adjudicator's decision, it would have to take a different kind of proceedings from those which were before the adjudicator to recover that money. Accordingly, the dispute that was before the adjudicator could not be finally determined by legal proceedings as envisaged by Section 108(3) of the Act; it would be a different dispute. Judge Havery regarded that argument as too clever by half. In his view effect would be given to Section 108(3) even though the nature of any further proceedings brought by The Vestry would be different in some material respects. Undaunted, The Vestry proceeded with its final argument to resist enforcement. The entire adjudication process, it was argued, contravened the Article 6 of European Convention on Human Rights. At the date of this judgment this Article was soon to become enforceable through the UK courts. Article 6 has been interpreted to require equality of arms for the purpose of a fair hearing, in the sense of a fair balance between the parties. "Each party must be afforded a reasonable opportunity to present its case, including his evidence, under conditions that do not place him at a substantial disadvantage viz-a-viz his opponent". The Vestry argued that in this case this was not so. They had been labouring under difficulties in the adjudication, partly due to the fact that much of the time of the principal person involved with the case had been spent in hospital visiting his dying mother. They also complained of the late delivery of documents produced by Elanay in the adjudication. Judge Havery recognised that the procedure in this case had had to be completed within thirty five days. Whilst that may be inherently unfair the adjudicator nevertheless had to comply with that time limit. In conclusion however, Judge Havery was satisfied that the European Convention on Human Rights Article 6 did not apply to proceedings before an adjudicator. Such proceedings are not in public whereas the procedure under Article 6 has to be in public. If Article 6 was to apply to proceedings before an adjudicator it was manifest that a coach and horses would be driven through the whole of the Housing Grants, Construction and Regeneration Act. In his view this was not the case primarily because, although proceedings before an adjudicator concern the decision or determination of a question of civil rights, they are not in any sense a final determination. Having dismissed all three arguments, Judge Havery concluded that there was no possible defence and ordered summary judgment for enforcement of the adjudicator's decision. Leave to appeal to the Court of Appeal was, however, granted.
CJ-0101
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