| Date | 22 September 1999 |
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| Judgment | A & D Maintenance and Construction Limited -v- Pagehurst Construction Services Limited, TCC 23 June 1999 |
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| The Issue | Enforcement of Adjudicator's decisions. |
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| Implication |
Adjudication decisions will be enforced by the courts without delay except in circumstances where the Adjudicator's jurisdiction can be successfully challenged. |
printThe decision in the case of A & D Maintenance and Construction Limited -v- Pagehurst Construction Services Limited delivered in the Technology and Construction Court on 23 June 1999, is the first judgment in which the court has given summary judgment for the payment of a sum of money in accordance with an Adjudicator's decision. The judgment reinforces previous decisions, including Macob Civil Engineering -v- Morrison Construction, and provides clear confirmation of the courts support for adjudication under the Housing Grants, Construction and Regeneration Act 1996. A & D was a sub-contractor for general building finishes in connection with building works at a school. Pagehurst was the main contractor. A & D submitted a series of invoices for work done, of which a balance of approximately £98,000 was not paid. Disputes arose between the parties and between Pagehurst and its client. These culminated in the main contract being determined by the client. On the same day Pagehurst wrote determining A & D's sub-contract. Whilst these matters were being discussed, to make matters considerably worse, a fire occurred causing extensive damage to the school. It was reported by the client's loss adjusters that the cause of the fire was the 'negligent installation of the boiler' which had formed part of A & D's sub contract works. Some weeks later A & D sent a notice of adjudication claiming the balance of its outstanding invoices. Unsurprisingly, Pagehurst responded to the effect that these invoices could not be adjudicated upon in isolation, and its claims against A & D in respect of, amongst other matters, the fire damage, would require to be taken into account. Pagehurst further argued that the sub-contract had ended and that the process of adjudication would be inappropriate, since it was primarily supposed to be used for minor disputes during the course of the contract. Nevertheless, the Adjudicator proceeded and gave his decision that Pagehurst should pay A & D a sum of approximately £103,000. Pagehurst refused to comply with the decision of the Adjudicator and accordingly A & D commenced proceedings for summary judgment. Firstly His Honour Judge David Wilcox QC was required to consider whether the Adjudication provisions, which were implied into the sub-contract by virtue of the Scheme for Construction Contracts, could properly survive the determination of the sub-contract. Judge Wilcox noted that Section 108 (1) of the Act provided that a Party may give notice at any time of his intention to refer a dispute to adjudication. He concluded that even if the contract had been terminated, the matters referred to the Adjudicator would remain disputes under the contract. By analogy with arbitration provisions, the adjudication provisions must clearly remain operative just as much as an arbitration clause would remain operative. It would have been possible for Parliament to have limited the time within which a Party could give notice of its intention to refer a matter to adjudication, but the Act did not do this. As a second strand to its argument, Pagehurst invited the court to examine and open up the decision of the Adjudicator. It was submitted that certain elements of the decision were incorrect, since Pagehurst argued, certain of the invoices raised by A & D did not become payable under the timetable laid down in the Scheme, and accordingly should not have formed part of the Adjudicator's decision. Judge Wilcox noted that the matters complained of were all matters within the competence of the Adjudicator because of the very wide powers conferred upon him by paragraph 20 of the Scheme. "The Adjudicator shall decide the matters in dispute. He may take into account any other matter which the Parties to the dispute agree should be within the scope of the adjudication which are matters under the contract which he considers are necessarily connected with the dispute. In particular he may…open up, revise and review any decision taken or any certificate given by any person referred to in the contract…" Accordingly, payments due under the invoices from A & D, and such matters as set-off or abatement under the contract, would all be properly within the Adjudicator's remit as matters arising under the contract. In conclusion, the correctness of the Adjudicator's decision was not a matter that fell to be considered by the court upon summary proceedings. In such circumstances, the court is considering the limited issue of the enforceability of the Adjudicator's decision. To review the Adjudicator's decision would be to go behind the intention of Parliament, that the decision of the Adjudicator should be binding. Judge Wilcox further added that the correctness of the decision will be able to be reviewed, revised or challenged where appropriate in subsequent arbitration or legal proceedings, or by way of an agreement between the parties. A & D had discharged the burden showing that Pagehurst had no real prospect of successfully defending the claim, which was to be restricted to the limited question of the binding nature of the adjudication. Accordingly summary judgment was granted for A & D in the amount of the Adjudicator's decision. It appears therefore that it will be extremely difficult to oppose the enforcement of an Adjudicator's decision except in circumstances, which I have reported in other cases, where the defendant can show doubt over the jurisdiction of the Adjudicator to deal with the matter.
CJ-9936
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