| Date | 21 August 2002 |
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| Judgment | Brenton -v- Palmer, TCC 19 January 2001 |
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| The Issue | Whether an adjudicator can validly decide upon the existence of a contract as a finding of fact, thereby establishing his jurisdiction to deal with disputes arising under that contract. |
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| Implication |
Where parties place before an adjudicator questions relating to the making of a construction contract, the decision of the adjudicator may be binding upon the parties. |
printThe case of Brenton -v- Palmer, decided at the beginning of last year, dealt with an interesting point concerning whether an adjudicator could make a finding of fact concerning who the contracting parties were, in circumstances where, if the adjudicator was wrong in that finding, he would have no jurisdiction to decide the dispute. The dispute between the parties arose out of a construction contract relating to the supply and installation of electrical equipment to the premises of either Mr Palmer, or his company called Lords of Princetown Ltd. The matter proceeded to an adjudication between Brenton and Palmer. The question as to who were the correct contracting parties was raised before the adjudicator, and he decided as a question of fact that the contracting party was indeed Palmer and not his company. The adjudicator ordered Palmer to pay Brenton a sum of approximately £26,000 within fourteen days. Palmer resisted that decision on enforcement proceedings, submitting that the adjudicator had no jurisdiction to make his award because, contrary to the finding of the adjudicator, the two parties to the relevant contract were Brenton and the company of Lords of Princetown, rather than Palmer himself. The tricky decision before the court was therefore whether the adjudicator was entitled to decide as a matter of fact who the contracting parties were, thereby in effect creating the jurisdiction for his decision as adjudicator. Clearly, if the adjudicator was wrong in his finding of fact as to the identity of the contracting parties, then he would have no jurisdiction to decide the dispute. The court therefore had to decide whether the adjudicator's finding that Mr Palmer was a party to the contract was something that could be questioned in enforcement proceedings. Logically one might have thought that the right to commence adjudication proceedings relies upon the existence of a construction contract and the existence of a dispute between the parties arising out of, or in connection with, that contract. Accordingly, a dispute about whether there is a contract at all, or about who the correct contracting parties are, would not normally be something that an adjudicator could deal with, unless by some means or another the parties have given the adjudicator such widened ambit. Judge Havery QC was satisfied that the parties had effectively referred the question of the identity of the parties to the adjudicator's decision. He concluded that the adjudicator's finding of fact that the contract was between Brenton and Palmer, was a finding that had been properly made. Accordingly, the adjudicator had not erred in law in reaching a conclusion that he had jurisdiction to proceed with the adjudication. Judge Havery cited two passages from previous cases which he considered to be helpful. Firstly, in Macob Civil Engineering -v- Morrison Construction, Judge Dyson had said "If (the adjudicator's) decision on the issue referred to him is wrong, whether because he erred on the facts or the law, or because in reaching his decision he made a procedural error which invalidates the decision, it is still a decision on the issue. Different considerations may well apply if he purports to decide a dispute which was not referred to him at all". Judge Dyson was also quoted from the case of Project Consultancy Group -v- The Trustees of the Gray Trust, where he said "In my view, different considerations apply where the adjudicator purports to make a decision which he is not empowered by the Act to make. One example of this would be where an adjudicator decides a dispute arising under a contract which is not a construction contract within the meaning of Section 104.1 of the Act. In that event, there is no right to refer the dispute for adjudication under Section 108.1, since it is not a dispute falling within the scope of that subsection. It is only a party to a construction contract who has the right to refer a dispute under the contract for adjudication". These observations led Judge Havery to conclude that, if the adjudicator had made an error in his decision as to who the contracting parties were, it was an error of fact which was certainly within his jurisdiction to determine. In the absence of any broader agreement between the parties as to the scope of the adjudicator's jurisdiction, this would be seen as a curious decision. Defining the identity of the parties to a construction contract may well be a finding of fact, but it is difficult to see how that finding of fact is necessarily contained within the adjudication of a dispute arising out of, or in connection with, a contract. In the event, Judge Havery concluded that the adjudicator's award was binding upon the parties, to the extent that any adjudicator's award is binding, that is subject to any further proceedings that might be taken to set it aside. Accordingly, Brenton was not to be kept out of the money to which he was entitled so far as the adjudication was concerned and judgment was therefore given in his favour.
CJ-0232
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