The Court of Appeal recently handed down two important decisions that looked at the question of the effective scope of the limitation on “re-adjudications” ....
...imposed by paragraph 9(2) of the Scheme for Construction Contracts, which provides:
“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”.
In Brown v CBS the builder (CBS) had referred to adjudication its demand for payment under a purported contractor’s ‘notice’ that it claimed it was entitled to issue as there was not a valid final certificate issued by the contract manager / architect. However, the first adjudicator found for the respondent. CBS then issued another demand for payment of the same monies (done correctly this time) and succeed in a second adjudication, which the Browns refused to acknowledge. Successful court enforcement proceedings were then brought by CBS.
That decision was appealed to the CA on the basis that the second adjudication was for the same or substantially the same as the dispute in the first adjudication and moreover all the second demand did was to correct the errors identified in the first adjudication – something which Dyson LJ has held to be impermissible in Quietfield Limited v. Vascroft Construction Limited  EWCA Civ 1737 (at para 47).
The CA found against the Browns and placed significant reliance upon the decision of the CA in Matthew Harding (trading as M J Harding Contractors) v. Paice and Springhall  EWCA Civ 1281, Jackson LJ (a case decided only a week or so before the hearing of the Browns’ appeal) where Jackson LJ held in relation to the question of what was or was not in dispute in particular adjudication:
“It is quite clear from the authorities that one does not look at the dispute or dispute referred to the first adjudicator in isolation. One must look at what the first adjudicator actually decided. Ultimately it is what the first adjudicator decided which determines how much or how little remains for consideration by the second adjudicator.” (at 57)
However, such a proposition does not appear to accord with the specific language of the Scheme or take into account the decision of Dyson LJ in Quietfield .As such, the Browns have applied for permission to appeal this decision to the Supreme Court.
Dr Tim Sampson / 23rd Mar 2016
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