| Date | 16 April 2003 |
|
|
| Judgment | R Durtnell & Sons Ltd -v- Kaduna Ltd, TCC 19 March 2003 |
|
|
| The Issue | Whether an adjudicator's decision can be enforced in part, with the remaining parts set aside. Whether a dispute can exist under a JCT contract where the architect has not delivered his decision upon extension of time. |
|
|
| Implication |
Where the matters referred to adjudication comprise a number of distinct disputes the court may order enforcement of discrete parts of the adjudicator's decision. Under a JCT contract, until the architect has decided upon an application for extension of time, or the period for giving his decision has expired, there can be no dispute capable of being adjudicated. |
printThe recent case of Durtnell v Kaduna raises some very interesting points concerning the management of the adjudication process. Durtnell is a long-established construction company based in the south east of England and specialising in the restoration and rebuilding of older properties. Kaduna is a property company incorporated in the Isle of Man and owned by the Formula One racing driver Jody Scheckter. In 1999 Kaduna engaged Durtnell to undertake works at Kaduna's property in Hampshire. A contract was entered into on the basis of the JCT 1980 standard form for works of the order £5.9 million with completion due in some 14 months. By February 2002 the contract sum had risen to a figure in excess of £11 million and completion had been delayed by one-half years. By November of that year disputes had arisen between the parties and an adjudicator had been appointed. Durtnell sought declarations with regard to extensions of time and practical completion and made claims for additional moneys in respect of the valuation of the works, loss and expense and the repayment of liquidated and ascertained damages. In due course the adjudicator issued his decision ordering Kaduna to pay Durtnell approximately £1.2 million on an interim basis. Kaduna did not pay the entirety of that sum, but instead paid approximately one half. Kaduna argued that it was entitled to follow this course of action since, amongst other complaints, the adjudicator had exceeded his jurisdiction in relation to those parts of his decision which had dealt with the award of extensions of time. The matter proceeded to enforcement in front of His Honour Judge Richard Seymour QC. Kaduna argued that at the time of commencement of the adjudication, Durtnell had made an application for a further extension of time to the architect under the contract. The time allowed in the contract for the architect in make a determination in respect of that application had not expired and the architect had not yet made his determination. This being the case, argued Kaduna, there could be no dispute at all between Durtnell and Kaduna as to whether Durtnell was entitled to any further extension of time. Neither could there be any dispute with regard to the reimbursement of loss and expense which might arise in consequence upon such a determination. Durtnell countered that a decision of the architect in relation to an application for an extension of time was not a condition precedent to the exercise of the right to adjudication. That right, Durtnell submitted, was exercisable at any time. Furthermore, Kaduna had taken part in the adjudication and although it had queried jurisdiction on certain matters, it had not previously made the jurisdiction objections it was now making. Moreover, by adopting half of the decision and refusing to comply with the other half, Kaduna were both 'approbating and reprobating' the decision. By Judge Seymour's own guidance in the 2002 case of Shimizu -v- Automajor, this was not permissible. In response Kaduna accepted that it was not necessarily the case that there should first to be a decision of the architect before an adjudicator could determine a contractor's entitlement to extension of time. However, Kaduna argued that once Durtnell had elected to seek a decision from the architect, until there was decision from the Architect, or until the time for such a decision had expired, there was nothing for Durtnell to dispute. Judge Seymour agreed with Kaduna on the extension of time issue. He concluded that it could not be said that there was a dispute on extension of time, or on the valuation of loss and expense consequent upon time, when the question of whether there should be an extension of time had been referred to the architect and the time allowed by the contract had not expired and no determination had been made. In his view it would be nonsensical to suggest that a dispute could exist between two parties as to a matter entrusted to a third party for independent decision, in advance of the decision being known. Judge Seymour also rejected the submissions of Durtnell that the responding party must take objection to the jurisdiction of an adjudicator at the commencement of the adjudication or not at all. The issue was whether Kaduna had waived its rights. Accordingly, the determining factor was whether Kaduna, as responding party, had deliberately elected not to raise the jurisdiction points. This could not be said to be the case in circumstances where an issue as to the jurisdiction of an adjudicator might only become apparent once the adjudicator's decision was finally given. Finally, Judge Seymour concluded that the doctrine of approbation and a probation could not be applicable where the matters raised in an adjudication were in effect a number of distinct disputes. Accordingly Kaduna had been entitled to accept and comply with certain parts of the adjudicator's decision, but to refuse to comply with those other parts which Kaduna considered were given in excess of jurisdiction. In conclusion Durtnell failed in its bid to secure enforcement of the balance of the adjudicator's decision which Kaduna had refused to accept. Where the matters referred to adjudication comprised a number of distinct disputes, Kaduna were entitled to cherry pick those parts of the decision which it liked, and where it could show that the adjudicator had erred on jurisdiction, ignore those parts it disliked.
CJ-0314
|
|||
|
© Brewer Consulting |
|||
 |
|||